NY A03408

Establishes licensing and regulation of student debt consultants through the New York Department of Financial Services, defining consultants as individuals or entities providing services related to student loan repayment, consolidation, forbearance, or forgiveness programs.

Prohibits consultants from charging fees before completing services, taking power of attorney, requesting borrower FSA IDs, retaining original loan documents, or misrepresenting affiliation with government or loan servicers.

Requires consultants to disclose in all advertisements that borrowers can access federal consolidation loans at no cost, that consolidation may not be the best option, and that alternative repayment plans exist without requiring consolidation.

Mandates student debt consulting contracts include specific terms in at least 12-point type, be notarized, contain a 5-business-day cancellation period with detailed notice requirements, and fully disclose all services and compensation.

Allows borrowers to recover actual and consequential damages plus attorney fees for violations, permits the superintendent to impose civil penalties up to $10,000 per violation, and voids any contract provisions limiting liability or requiring arbitration.