Representatives from the Colorado Attorney General received feedback Wednesday about how registration fees required for private student loan lenders may be cost prohibitive and impact their lending abilities for students.
Stakeholders, including ACA International members, that would be impacted by the Colorado Student Loan Equity Act, S.B. 21-057, signed into law by Gov. Jared Polis on June 29, sought more information on the regulations and their cost during a public hearing with the Colorado Attorney General’s office Wednesday.
S.B. 21-057 expands the existing Colorado Student Loan Servicers Act, which applies only to persons who service student loans, by adding a new part covering private lenders, creditors and collection agencies in connection with those student education loans that are not made, insured or guaranteed under federal law and are used for postsecondary education, ACA previously reported.
ACA members testified on the bill during hearings this spring following a campaign to get input from members with creditor clients working in the private student loan space in Colorado.
The law authorizes the administrator of the Uniform Consumer Credit Code in the Department of Law to establish fees for the private education lender registry, to set requirements for the timing of required documents and information for the registry and to prescribe an alternative registration process and fee structure for public and private nonprofit postsecondary educational institutions.
Registration is required by Sept. 1, 2021. The administrator is considering emergency rulemaking to implement the registration set the public hearing as part of the process to determine the number of entities that will need to register.
In response to questions from ACA member Makyla Moody, attorney at Greenberg Sada and Moody PC in Englewood Colorado, Colorado Student Loan Ombudsperson Kelsey Lesco said the attorney general currently does not have information on the registration or licensing fees and application availability.
“That might influence how many people might apply,” Moody said. She added the fee structure should be established based on the loan amounts offered by private lenders compared to public educational institutions.
However, Lesco reiterated the attorney general is seeking information on the number of entities that would apply under the amended law to determine its fee structure.
Representatives of private lenders also commented during the hearing.
Kay Rendleman from the Colorado Institute of Massage Therapy in Colorado Springs said the application fee and registration fee will impact whether they are able to continue to offer financial aid to their students, which many rely on.
“Because of that, you’re going to be turning off schools from offering these programs,” Rendleman said.
Heidi Markey, financial aid director at Adams State University in Alamosa, Colorado, said she agreed with Rendleman and the fees would impact their lending.
“This would have a negative impact on our student population. We do have several situations where students are not able to borrow through the direct federal lending program,” Markey said. “This is a group that we would consider at risk … we will lose students because of this.”
Lesco said the attorney general’s office will review the feedback from the meeting and provide an update to the stakeholders and licensees on next steps. They did not receive any written feedback, which was due July 14.
For more information, view a copy of the proposed draft rules to implement the law.
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