Governor Gretchen Whitmer signed an executive directive in late May aimed at lowering costs and reducing the student loan burden for Michiganders. The directive instructs State of Michigan departments to assess the costs and benefits of the state re-entering the market as a student loan originator, determine enhancements to protect borrowers, improve educational materials, and consider any additional measures to support borrowers.
“To ensure Michiganders have the tools they need to compete in a global economy, we must work together to expand access to quality, affordable higher education,” said Governor Whitmer. “In Michigan, we have established several programs to lower the cost of skills training and college so anyone can envision their future in our state. Together, we will keep creating economic opportunity and growing our state by lowering costs, attracting and retaining young people, and meeting business talent needs. Let’s keep working together to put every young person on a path to a bright future by expanding their education options and ultimately, improving their quality of life.”
“Paying for a college education often requires students and families to take out loans to cover tuition, books and housing,” said State Treasurer Rachael Eubanks. “Finding innovative and responsible ways to make student loans more affordable can help students achieve their dreams while minimizing the amount of debt needed. I look forward to working with Governor Whitmer and the other state departments to problem-solve this very important issue.”
Governor Whitmer’s executive directive aims to explore ways to lower costs for Michiganders by instructing the Michigan Department of Treasury to look at the benefits of the State of Michigan restarting as a student loan originator; including whether this could permit Michigan borrowers to access lower interest rates and enable borrowing by underserved communities, and the effects of allowing Michiganders to refinance their current loans with the state.
Additionally, the Michigan Department of Agriculture and Rural Development (MDARD), including the Office of Rural Development (ORD), the Office of the State Employer (OSE), and the Department of Labor and Economic Opportunity (LEO) must consider any additional measures they can take to lower costs for borrowers and reduce student loan burdens for Michiganders.
In order to further protect borrowers in Michigan, Governor Whitmer instructed the Department of Insurance and Financial Services (DIFS) to study current regulations and determine what improvements are needed. The study will consider whether regulatory improvements could make loans more affordable and increase transparency in the handling of loans. The study will also consider whether the creation of a student loan ombudsperson would meaningfully further these goals.
The Michigan Department of Treasury must also work together with the Michigan Department of Education (MDE), DIFS, and the boards of higher education institutions in Michigan to assess current materials and outreach strategies to new and existing borrowers, identify gaps, and develop and disseminate additional educational materials for borrowers and potential borrowers.
Governor Whitmer signed the directive in anticipation of a U.S. Supreme Court decision on the president’s student loan proposal.
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