North Carolina 2025 Session Status: In Committee Bipartisan · 6 D · 5 R cosponsors

SB 426 — Student Borrowers' Bill of Rights.

Last action — Passed 1st Reading

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Senate
  4. 4
    Passed House
  5. 5
    To Executive
  6. 6
    Enacted

This bill is in committee in the Senate. Introduced March 24, 2025. It must pass committee before a floor vote.

Next likely step: a committee vote, then a floor vote in the Senate.

Prognosis

Advancing 42% · moderate confidence

Where this bill stands today.

Odds of enactment

Low

How often bills like it became law.

  • In Committee

    Current position in the legislative process.

  • 11 sponsors

    1 primary, 10 co-sponsors signed on.

  • Bipartisan support

    Sponsored across 2 parties (6 D · 5 R) — cross-party backing.

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Bill Text

What changed in the latest version

42 added · 43 removed

Plain-language change summary

The latest version of Bill SB 426 includes adjustments that clarify the conditions under which student loan servicers must operate, particularly regarding automatic license renewals and the handling of payments. These changes aim to ensure that borrowers receive the proper support and protections when making payments on income-driven repayment plans. By streamlining processes and enhancing borrower rights, the amendments help to improve the overall management of student loans, which is crucial for individuals facing financial challenges.

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FILED SENATE GENERAL ASSEMBLY OF NORTH CAROLINA Mar 24, 2025 S.B.
GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2025 S 1 SENATE BILL 426 Short Title:
426 SESSION 2025 PRINCIPAL CLERK S D SENATE BILL DRS45219-MUf-38 Short Title:
A BILL TO BE ENTITLED AN ACT TO ENACT A STUDENT BORROWERS' BILL OF RIGHTS, TO PROVIDE THAT THE COMMISSIONER OF BANKS SHALL LICENSE AND REGULATE STUDENT LOAN SERVICERS, AND TO ESTABLISH THE POSITION OF THE STUDENT LOAN OMBUDSMAN.
Rules and Operations of the Senate March 25, 2025 A BILL TO BE ENTITLED AN ACT TO ENACT A STUDENT BORROWERS' BILL OF RIGHTS, TO PROVIDE THAT THE COMMISSIONER OF BANKS SHALL LICENSE AND REGULATE STUDENT LOAN SERVICERS, AND TO ESTABLISH THE POSITION OF THE STUDENT LOAN OMBUDSMAN.
An individual who has received or agreed to pay a student loan or debt to attend an institution located in this State.
An individual who has received or agreed to paya student loan or debt to attend an institution located in this State.
*DRS45219-MUf-38* General Assembly Of North Carolina Session 2025 d.
*S426-v-1* General Assembly Of North Carolina Session 2025 d.
Page 2 DRS45219-MUf-38 General Assembly Of North Carolina Session 2025 (2) A wholly owned subsidiary of an entity described in subdivision (1) of this subsection.
Page 2 Senate Bill 426-First Edition General Assembly Of North Carolina Session 2025 (2) A wholly owned subsidiary of an entity described in subdivision (1) of this subsection.
DRS45219-MUf-38 Page 3 General Assembly Of North Carolina Session 2025 (c) Investigation.
Senate Bill 426-First Edition Page 3 General Assembly Of North Carolina Session 2025 (c) Investigation.
– A person seeking to act within this State as a student loan servicer is exempt from the procedures describedinsubsections(a)through(d)ofthissectionuponadeterminationbytheCommissioner that the person is a party to a contract awarded by the United States Secretary of Education under 20 U.S.C.
– A person seeking to act within this State as a student loan servicer is exempt from the procedures describedinsubsections(a)through(d)ofthissectionuponadeterminationbytheCommissioner that the person is a partyto a contract awarded bythe United States Secretary of Education under 20 U.S.C.
Automatically issue a renewal license upon payment of the assessment required by G.S.
Automaticallyissue a renewal license upon payment of the assessment required by G.S.
– A person issued a license pursuant to this subsection shall provide the Commissioner with written notice within seven days after notification of the expiration, revocation, or termination of any contract awarded by the United States Secretary of Education under 20 U.S.C.
– A person issued a license pursuant to this subsection shall provide the Commissioner with written notice within seven days after notification of the expiration, revocation, or termination of any contract awarded by the United States Secretaryof Education under 20 U.S.C.
§ 1087f, nothing in this section prevents the Commissioner from issuing, or filing acivil actionfor, an order to temporarily Page 4 DRS45219-MUf-38 General Assembly Of North Carolina Session 2025 or permanently enjoin a person from acting as a student loan servicer or from violating this Article.
§ 1087f, nothing in this section prevents the Commissioner from issuing, or filing a civil action for, an order to temporarily Page 4 Senate Bill 426-First Edition General Assembly Of North Carolina Session 2025 or permanently enjoin a person from acting as a student loan servicer or from violating this Article.
Claimants against the licensee may themselves bring suit directly on the surety bond, or the Commissioner may bring suit on behalf of the claimants, either in one action or in successive actions.
Claimants against the licensee may themselves bring suit directly on the surety bond, or the Commissioner maybring suit on behalf of the claimants, either in one action or in successive actions.
DRS45219-MUf-38 Page 5 General Assembly Of North Carolina Session 2025 (a) Renewal.
Senate Bill 426-First Edition Page 5 General Assembly Of North Carolina Session 2025 (a) Renewal.
(2) Within20daysoftheoccurrenceofanyoneofthe followingevents, alicensee shall file a written report with the Commissioner through the NMLS describing the event and its expected impact on the licensee's activities in this State:
(2) Within20daysoftheoccurrenceof anyoneofthe followingevents, alicensee shall file a written report with the Commissioner through the NMLS describing the event and its expected impact on the licensee's activities in this State:
Page 6 DRS45219-MUf-38 General Assembly Of North Carolina Session 2025 b.
Page 6 Senate Bill 426-First Edition General Assembly Of North Carolina Session 2025 b.
(3) If the information contained in any document filed with the Commissioner or the NMLS is or becomes inaccurate or incomplete in any material respect, the licensee or applicant shall within 30 days file a correcting amendment to the information contained in the document.
(3) If the information contained in any document filed with the Commissioner or the NMLS is or becomes inaccurate or incomplete in anymaterial respect, the licensee or applicant shall within 30 days file a correcting amendment to the information contained in the document.
(2) With respect to student loansenrolledin anytypeofincome-driven repayment plan, the number of borrowers, number of student loans, and total outstanding balance.
(2) With respect to student loans enrolledin anytypeofincome-driven repayment plan, the number of borrowers, number of student loans, and total outstanding balance.
(b) The 30-day period in subsection (a) of this section may be extended for not more than 15 days if, before the end of the 30-day period, the student loan servicer notifies the borrower or the borrower's representative of the extension and the reason for the delay.
(b) The 30-dayperiod in subsection (a) of this section maybe extended for not more than 15 days if, before the end of the 30-day period, the student loan servicer notifies the borrower or the borrower's representative of the extension and the reason for the delay.
Where loans on a borrower's student loan account have an equal level of delinquency, a student loan servicer shall apply partial payments to satisfy as many individual loan payments as possible on the borrower's account.
Where loans on a borrower's student loan account have an equal level of delinquency, a student loan servicer shall applypartial payments to satisfyas many individual loan payments as possible on the borrower's account.
DRS45219-MUf-38 Page 7 General Assembly Of North Carolina Session 2025 (f) In the event of the sale, assignment, or other transfer of the servicing of a student loan that results in a change in the identity of the person to which a borrower is required to send payments or direct any communication concerning the loan, the following provisions apply:
Senate Bill 426-First Edition Page 7 General Assembly Of North Carolina Session 2025 (f) In the event of the sale, assignment, or other transfer of the servicing of a student loan that results in a change in the identity of the person to which a borrower is required to send payments or direct any communication concerning the loan, the following provisions apply:
For purposes ofthis subdivision,aborrower whohas submittedacomplaint to any State agency is deemed to have authorized the student loan servicer to communicate directly with the State agency about the borrower's student loan.
For purposes ofthis subdivision,aborrower whohas submittedacomplaint to any State agency is deemed to have authorized the student loan servicer to communicate directlywith the State agencyabout the borrower's student loan.
Page 8 DRS45219-MUf-38 General Assembly Of North Carolina Session 2025 (10) Make any false statement or omit any material fact in connection with information or reports filed with a governmental agency or in connection with an investigation or examination conducted by the Commissioner.
Page 8 Senate Bill 426-First Edition General Assembly Of North Carolina Session 2025 (10) Make any false statement or omit any material fact in connection with information or reports filed with a governmental agency or in connection with an investigation or examination conducted by the Commissioner.
(11) Communicate with a borrower in any manner designed to harass or intimidate the borrower.
(11) Communicate with a borrower in anymanner designed to harass or intimidate the borrower.
The Commissioner may order the attendance of and examine under oath all persons whose testimony about the student loan servicing activity the Commissioner deems relevant.
The Commissioner may order the attendance of and examine under oath all persons whose testimonyabout the student loan servicingactivity the Commissioner deems relevant.
(c) Upon request, each student loan servicer shall make available in a location that is acceptable to the Commissioner the records relating to the operations of the student loan servicer.
(c) Upon request, each student loan servicer shall make available in a location that is acceptable to the Commissioner the records relatingto the operations of the student loan servicer.
(2) Enter into agreements or relationships with other governmental agencies or regulatory associations to improve efficiencies and reduce the regulatory DRS45219-MUf-38 Page 9 General Assembly Of North Carolina Session 2025 burden by sharing resources, standardized or uniform methods or procedures, or documents or information obtained under this section.
(2) Enter into agreements or relationships with other governmental agencies or regulatory associations to improve efficiencies and reduce the regulatory Senate Bill 426-First Edition Page 9 General Assembly Of North Carolina Session 2025 burden by sharing resources, standardized or uniform methods or procedures, or documents or information obtained under this section.
The entities described in subsection (b) or (c) of this section may share information with all State and federal regulatory officials with student loan industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by State and federal law.
The entities described in subsection (b) or (c) of this section may share information with all State and federal regulatory officials with student loan industryoversight authority without the loss of privilege or the loss of confidentiality protections provided by State and federal law.
Page 10 DRS45219-MUf-38 General Assembly Of North Carolina Session 2025 (a) The Commissioner may, by order, deny, suspend, revoke, or refuse to renew a license under this Article or may restrict the manner in which a licensee or a controlling person of a licensee engages in student loan servicing, if the Commissioner finds both of the following:
Page 10 Senate Bill 426-First Edition General Assembly Of North Carolina Session 2025 (a) The Commissioner may, byorder, deny, suspend, revoke, or refuse to renew a license under this Article or may restrict the manner in which a licensee or a controlling person of a licensee engages in student loan servicing, if the Commissioner finds both of the following:
– If a student loan servicer violates this Article or rule adopted or order issued under this Article, the Commissioner may order the student loan servicer to pay restitution to a borrower injured by the violation.
– If a student loan servicer violates this Article or rule adopted or order issued under this Article, the Commissioner mayorder the student loan servicer to payrestitution to a borrower injured by the violation.
DRS45219-MUf-38 Page 11 General Assembly Of North Carolina Session 2025 (b) A violation of this Article or rule adopted or order issued under this Article is an unfair or deceptive trade practice for purposes of Chapter 75 of the General Statutes.
Senate Bill 426-First Edition Page 11 General Assembly Of North Carolina Session 2025 (b) A violation of this Article or rule adopted or order issued under this Article is an unfair or deceptive trade practice for purposes of Chapter 75 of the General Statutes.
(b) The Commissioner is deemed to have complied with the requirement of law concerning service of process upon mailing by certified mail notice to a licensee, postage prepaid and addressed to the last known address on file with the Commissioner.
(b) The Commissioner is deemed to have complied with the requirement of law concerning service of process upon mailingbycertified mail notice to a licensee, postage prepaid and addressed to the last known address on file with the Commissioner.
53C-2-6(b), any person aggrieved by any rule adopted or order issued by the Commissioner may appeal to the State Banking Commission for review upon providing awrittennotice ofappeal within20days aftertherulewas adopted ororderwas issued.
53C-2-6(b), any person aggrieved by any rule adopted or order issued by the Commissioner may appeal to the State Banking Commission for review upon providingawrittennotice ofappeal within20days aftertherulewas adopted ororderwas issued.
Page 12 DRS45219-MUf-38 General Assembly Of North Carolina Session 2025 (b) No later than July 1, 2027, the Office of the Commissioner of Banks, in coordination with the State Education Assistance Authority, shall ensure that the Ombudsman establishes and maintains a student loan borrower education course that includes educational presentations and materials regarding student loans.
Page 12 Senate Bill 426-First Edition General Assembly Of North Carolina Session 2025 (b) No later than July 1, 2027, the Office of the Commissioner of Banks, in coordination with the State Education Assistance Authority, shall ensure that the Ombudsman establishes and maintains a student loan borrower education course that includes educational presentations and materials regarding student loans.
The program shall include key loan terms, documentation requirements, monthly payment obligations, income-based repayment options, the availability of State and federal loan forgiveness programs, and disclosure requirements.
The program shall include key loan terms, documentation requirements, monthlypayment obligations, income-based repayment options, the availabilityof State and federal loan forgiveness programs, and disclosure requirements.
(3) The efficacy of the student loan borrower education course in making student borrowersawareoftheirrights and responsibilitiesand theresources available to them." SECTION 2.(b) This section becomes effective January 1, 2027.
(3) The efficacy of the student loan borrower education course in making student borrowersawareoftheirrights andresponsibilitiesand theresources available to them." SECTION 2.(b) This section becomes effective January 1, 2027.
If any provision of this act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this act that can be given effect without the invalid provision or application and, to this end, the provisions of this act are severable.
If any provision of this act or its application to any person or circumstance is held invalid, the invaliditydoes not affect other provisions or applications of this act that can be given effect without the invalid provision or application and, to this end, the provisions of this act are severable.
DRS45219-MUf-38 Page 13
Senate Bill 426-First Edition Page 13
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How this bill changes current law

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Compared against the N.C. General Statutes as published AI-generated reading aid — verify against the official bill.

The bill introduces licensing and regulatory provisions for student loan servicers in North Carolina.

  • Chapter 53

    Article 26. "Student Borrowers' Bill of Rights."

    Establishes a new article to protect student loan borrowers.

  • § 53-440

    This Article may be cited as the Student Borrowers' Bill of Rights.

    Sets a short title for the new Article.

  • § 53-441

    This Article protects student loan borrowers and their families by providing that the Commissioner of Banks shall license and regulate student loan servicers to ensure that student loan borrowers and their families are treated fairly.

    Defines the purpose of the Student Borrowers' Bill of Rights.

  • § 53-442(4)

    "Servicing." – Engaging in any of the following for compensation or gain: (a) Receiving or soliciting any scheduled periodic payment on a student loan from a borrower or any notification that a borrower made a scheduled periodic payment on a student loan and applying a payment to the balance of the student loan. (b) During a period when no payment is required on a student loan, maintaining account records for the student loan and communicating with the borrower regarding the student loan on behalf of the owner of the student loan. (c) Having the right to receive payments from a borrower when the loan is delinquent or in default. (d) Interacting with a borrower to facilitate the activities described in sub-subdivisions a. or b. of this subdivision, including helping a borrower avoid default on a student loan.

    Defines the term 'servicing' in relation to student loans.

  • § 53-443 (a)

    No student loan servicer except those exempt under subsection (b) of this section shall service a student loan unless the person has a student loan servicer license as provided in this Article. → License Requirement. – No student loan servicer except those exempt under subsection (b) of this section shall service a student loan unless the person has a student loan servicer license as provided in this Article.

    Establishes a requirement for student loan servicers to be licensed.

  • § 53-443 (b)

    The following are exempt from all provisions of this Article:.... (4) Institutions of higher education, as defined in G.S. 116-143.1.

    Lists exemptions from the licensing requirement for servicers, including institutions of higher education.

  • § 53-444 (a)

    Applications under this Article shall be filed through the Nationwide Multistate Licensing System and Registry (NMLS) in a form acceptable to the Commissioner.

    Specifies the process for licensing applications for student loan servicers.

  • § 53-444 (b)

    An applicant shall include a nonrefundable application fee of one thousand five hundred dollars ($1,500) with the application.

    Imposes a new application fee for licensing as a student loan servicer.

  • § 53-444 (e)

    The Commissioner shall issue a student loan servicer license to an applicant if the Commissioner finds all of the following...

    Outlines the criteria the Commissioner must find to issue a student loan servicer license.

Action History

  1. Passed 1st Reading

  2. Ref To Com On Rules and Operations of the Senate

  3. Filed

Sponsors

Sponsorship breakdown

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1 sponsors · 10 co-sponsors · 168 not signed on

Sponsors (1)

Co-sponsors (10)

Not signed on (168)

168 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Subjects

finance education
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

Frequently asked questions

Who sponsors SB 426?
SB 426 is sponsored by Joyce Waddell (Democratic), Benton G. Sawrey (Republican), DeAndrea Salvador (Democratic), Mujtaba A. Mohammed (Democratic), Timothy D. Moffitt (Republican), Michael Garrett (Democratic), Danny Earl Britt, Jr. (Republican), Val Applewhite (Democratic), Gale Adcock (Democratic), David W. Craven, Jr. (Republican), and Amy S. Galey (Republican).
What is the current status of SB 426?
This bill is in committee in the Senate. Introduced March 24, 2025. It must pass committee before a floor vote.
Where can I track SB 426?
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