State AG to combat poor student loan customer service

Minnesota Attorney General Lori Swanson has drafted legislation that would combat poor customer service around student loans.

Swanson said students and their parents often can't get straight answers from banks and loan-servicing companies about the terms of their borrowing.

"They try to call the servicing companies and get basic information like: What do I owe? What's the interest? How do I consolidate my loans? If I don't have a job afterward, what kind of payment plans do I have to avoid dinging my credit?" Swanson said. "And they can't even get basic answers like a copy of their contract."

Tom Kosel, legislative chairman of the Minnesota Career College Association, says he personally finds it fair.

"As long as our goal is to provide students with the information they need, it's good policy, and it's good procedure."

Swanson's office has drafted legislation that would require student loan companies to provide such information clearly and in a timely manner.

The law would not affect national banks or federally guaranteed student loans. Swanson said she's talking with lawmakers who are interested in sponsoring the bill this session.