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States Address Student Loan Debt in 2021 Session

By Andrew Smalley  |  August 24, 2021

The Biden administration’s recent extension of the pause on student loan payments and interest to Jan. 31, 2022, means borrowers with federal student loans will not be required to make payments for all of 2021 in addition to the nine-month pause in 2020.

While this pause has been in place at the federal level, states have taken substantial action in 2021 to address student loan debt. In the 2021 legislative session, 43 states have introduced more than 170 bills related to student loan debt.

More than half of all introduced bills related to student loan debt addressed potential forgiveness or relief for borrowers. Nearly a dozen states passed legislation to create or amend a student loan forgiveness program.

Alabama expanded a loan repayment program for STEM teachers, and Iowa modified requirements for its Rural Primary Care Loan Repayment Program. The new programs include a teacher loan repayment program in Mississippi, a veterinarian debt assistance program in Ohio, a state crime lab employee repayment program in Arkansas, and a loan repayment program for healthcare providers in Maine who agree to live and work in the state for at least five years.

States also continued to address student loan oversight in 2021.

Bills relating to oversight were introduced in 20 states, and OklahomaMaine and Massachusetts passed legislation to create new regulations or to enact student borrower bill of rights legislation. These protections include licensing requirements for loan servicers and the creation of student loan ombudsman offices to assist borrowers with repayment.

Colorado and Connecticut both passed laws that will expand their oversight and consumer protection roles for student loan servicing. Utah also enacted a law that requires higher education institutions to disclose information regarding student loan borrowing at the institutions. Since 2015, 15 states have passed legislation relating to student loan borrower protections and student loan ombudsmen.

Connecticut also passed legislation to require the Connecticut Higher Education Supplemental Loan Authority to study an expansion of loan programs to support borrowers with low credit scores or those previously been denied a loan.

Several notable bills relating to student loans did not become law in 2021. Oregon considered but did not pass legislation to conduct a study for establishing a student loan program for incarcerated individuals. A failed bill in Maryland would have required state agencies to consider student loan debt as part of eligibility for mortgage financial assistance programs.  

Some bills addressing student loan debt will carry over to next year’s legislative session, including a bill in Minnesota to prohibit schools from using a transcript release as a debt collection tool and a bill in Kansas to extend a rural loan repayment program.

NCSL continues to track all state legislation related to student loans in the Student Loan Bill Tracking Database and provide resources on common areas of state legislation on the Student Loan Debt Resources page. These resources are made possible through generous support from The Annie E. Casey Foundation.

Andrew Smalley is a policy associate in NCSL’s Education Program.

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