Treasurer Seth Magaziner and Attorney General Peter Neronha are throwing their support behind a bill that would help protect Rhode Islanders from predatory student loan practices by providing state oversight of loan servicers.

PROVIDENCE — Treasurer Seth Magaziner and Attorney General Peter Neronha are throwing their support behind a bill that would help protect Rhode Islanders from predatory student loan practices by providing state oversight of loan servicers.

Magaziner and Neronha were scheduled to hold a news conference at the State House on Thursday with Sen. Dawn Euer, D-Jamestown, the bill's sponsor, and Rep. Joseph McNamara, D-Warwick.

The proposed Student Loan Bill of Rights requires student loan providers to register with the state and allows the state to examine their business practices. It also allows the attorney general and the Department of Business Regulation to impose penalties on servicers that violate borrowers' rights and to seek restitution on their behalf.

It prohibits deceptive student loan practices.

“Too many Rhode Islanders are vulnerable to deceptive and predatory practices by their student loan servicers, who make it hard for borrowers to keep their loan payments affordable,” Magaziner said. “Too often, borrowers aren’t receiving accurate information about their loan, which can result in higher interest, leave them in debt longer, and make them more likely to default. This legislation will hold student loan servicers accountable and help Rhode Islanders choose the options that are best for them.”

Neronha said his office will be ready to investigate and enforce violations of the student loan standards contained in the legislation.

More than 133,000 Rhode Islanders, including 16,000 senior citizens, have a combined $4.5 billion in student loan debt, according to the Rhode Island treasurer's office. More than $470 million of Rhode Islanders’ student loan debt is delinquent.

Borrowers in Rhode Island say they are being double-charged or incorrectly marked as delinquent, and that loan servicers take months, sometimes years, to correct mistakes, according to the treasurer's office.

"Additionally, many student loan borrowers who participate in the national “Public Service Loan Forgiveness” program have received incorrect and contradictory information from their loan servicers, leading to improper denials of loan forgiveness," the treasurer's office said.

“The heavy burden of student debt is challenging enough for the majority of college graduates. Incompetent, inefficient or even deceitful loan servicers should not be allowed to exacerbate their struggles,” Euer said. “Student loan servicers must be held accountable to ensure that they are providing honest, reliable information and services to their borrowers.”

— lborg@providencejournal.com

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On Twitter: @lborgprojocom