EAST LANSING, Mich. (WOOD) — U.S. Sen. Gary Peters says he will introduce a new bill to give those who default on private student loans and then start paying again a chance to clean up their credit.
Peters, a Democrat from Bloomfield Township, says student loan debt is growing — and so is the number of people defaulting on their loans. He said his bill is aimed at younger borrowers who may be struggling to find a job and make payments.
Currently, borrowers who default on federal loans have a chance to repair their credit and get the default status removed, but that opportunity doesn’t exist with private loans.
“Many students have both federal loans and private loans and they’re allowed to rehabilitate their credit report on the federal loan, but they’re not on the private loan, so even if they’re making payments on-time with both loans, they won’t be able to fully repair their credit report unless we make this change with private lenders,” Peters said.
He said he is working to build support for the bill and hopes to get it to a committee soon.