A new law went into effect on July 1 in Virginia related to the collection of student loans.
HB 165 was sponsored by Delegate David Yancey, a Republican. It was introduced last December and was signed into law by Virginia Gov. Ralph Northam in April. The bill was one of more than a hundred new laws that took effect in Virginia on July 1.
Among the provisions of the law are:
- Require loan documents to include a plan for the repayment of principal and interest and the payment of any late fees and clear and detailed information about the collection process for such loan pursuant to the Virginia Debt Collection Act, including information about the agency or entity that is responsible for collection
- Establish a process for notifying each student or his or her parent, of any loan payment that is past due no later than (a) 30 days after such payment becomes past due and (b) if necessary, the end of the academic term during which such payment becomes past due.
- Each institution, with the consent of the borrower, can modify the terms of any loan for which payments are past due to provide for repayment forbearance and repayment to commence on a mutually agreed-upon date in the future.
Here is an interesting behind-the-scenes look at how the bill was amended during its progression through the state legislature, specifically how it went from not nearly passing in the state House to being unanimously approved by the state Senate.