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New Jersey Appoints Student Loan Ombudsman | Ballard Spahr srl

Last week, the New Jersey Department of Banking and Insurance (DOBI) announced it had appointed Raghu Kakumanu as the state’s student loans ombudsperson. DOBI chose to fill the role internally, as Kakumanu currently heads the Office of Consumer Finance, the same unit through which student loan inquiries and complaints will be handled.

Kakumanu is the first [PERSON] to occupy this role, which was created under New Jersey Student Loan Managers Licensing Act promulgated last year. Under this law (SB 1149, PL 2019, c. 200, codified in NJ Stat. §§ 17: 16ZZ-1 et seq.), the missions of the Mediator consist in particular of:

  • Receive and investigate complaints from student loan borrowers and compile related data;
  • Help student loan borrowers understand their rights and responsibilities under the terms of student loans;
  • Analyze the development and implementation of federal, state and local laws and regulations and recommend necessary changes; and
  • Submit an annual report containing specified information to the Commissioner and Secretary of Higher Education

This is the latest recent action taken by DOBI to implement SB 1149. On September 1, DOBI issued a bulletin outlining the license application procedures for student loan managers, and on September 15, it started accepting applications via NMLS. The law also requires the DOBI to promulgate implementing regulations, although it has yet to release any proposed rules.