President Barack Obama wants to help college students solve their student loan problems — on the Internet.
On Tuesday, he signed the “Student Aid Bill of Rights,” which, among other things, will create two new websites — one for filing complaints against student loan collectors, the other which will better explain a confusing student loan repayment process.
“We’re creating a way for you to ask questions, file a complaint, get a faster response, and cut through bureaucracy,” Obama told an auditorium full of students at the Georgia Institute of Technology in Atlanta. “Every student deserves access to high-quality education. Every borrower has the right to an affordable repayment plan.”
“Here’s the challenge: Higher education has never been more important, but it’s never been more expensive,” Obama said. “America is not a place where higher education is reserved for a few. It has to be available to every single person who’s willing to strive for it.”
The presidential memorandum directs the executive office to do the following….
1. Create a a central place for students to see their loans and file complaints.
By July 1, 2016, the Secretary of Education must create a new website where students can file complaints and provide feedback about loan services and collectors. The Department of Education has to study these complaints and investigate whether institutions of higher learning or debt collectors are violating any federal laws or regulations.
A second website will show borrowers all of their federal loans in one place. Due to many federal loans being sold to third-party loan servicers like CornerStone, Navient/Sallie Mae, and Nelnet, it can be confusing for graduates to know which payment goes where.
2. Find more ways to help borrowers afford their monthly payments.
Obama said the Department of Education must make it as easy as possible to verify if borrowers qualify for things like income-based repayment plans and other options to help prevent them defaulting on their loans.
“We’ve allowed students to make payments based on their income so they don’t have to choose between paying their rent and debt,” Obama said. “Graduates who go into lower paying jobs like social work and teaching have even better options to repay their loans.”
3. Work to create more protections for student borrowers, including bankruptcy.
Obama raised the possibility of treating student loans as disposable in bankruptcy, like credit card debt or mortgage debt is currently treated. The Consumer Financial Protection Bureau, which in the past has been responsible for enforcing things like the CARD Act, has to work with the White House to investigate whether student loans may be subject to more consumer protections commonly afforded to other types of debt.
In his speech, Obama asked audience members to sign their name to the Student Aid Bill of Rights. It says that every student in America should:
- Have access to an affordable education;
- Be able to easily find resources they need to pay for college;
- Be able to choose an affordable repayment plan for student loans;
- Receive reliable information, fair treatment, and quality customer service when repaying loans.
Obama said he wanted to mobilize the entire nation to get behind these issues.
“If you’re not asking for help, folks aren’t going to help you,” he said. “Every American should have the right to go as far as their talent will take them.”