Obama Pushes to Make Paying Student Loans Easier

Personal Finance
You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved. Here's how we make money.
16590754698_4b2edb0f40_b

President Barack Obama has issued a “Student Aid Bill of Rights,” ordering federal education officials to help make repaying student loans simpler and easier.

“It says every student deserves access to a quality, affordable education. Every student should be able to access the resources to pay for college.  Every borrower has the right to an affordable repayment plan,” Obama said Tuesday during a speech at the Georgia Institute of Technology in Atlanta. “Every borrower has the right to quality customer service, reliable information and fair treatment, even if they struggle to repay their loans.”

The statement isn’t a specific new policy. But it steers federal agencies toward a handful of actions while putting into focus an issue that has been a priority for the Obama administration since he took office.

Roughly 40 million Americans carry education loan debt that averages a whopping $29,000.

The “Bill of Rights” instructs the Department of Education, Department of Treasury and other federal agencies to prioritize making it easier for students, and former students, to pay for their educations.

See also: How to Pay off Student Loan Debt on Time

“It is our responsibility to make sure that the more than 40 million Americans with student loans are aware of resources to help them manage their debt, and that we are doing everything we can to be responsive to their needs,” U.S. Education Secretary Arne Duncan said in a post on the White House blog.

“The Student Aid Bill of Rights builds on the efforts our Administration has been taking over the last several years to make college more affordable and continues to chip away at the burden of student debt — so no one should feel overwhelmed by their student loans.”

16590942860_a148e5f4f7_b

Obama’s order calls on the Education Department to create a new website by July of next year that would let student loan borrowers file complaints and provide feedback about lenders, collection agencies and colleges and universities involved in collecting on their debt.

The site would allow the Education Department to respond quicker to any complaints.

Other changes include requiring companies that service student loans to alert borrowers when they’ve fallen behind on their payments, or when their loans have been transferred to another collector.

Last week, the Education Department cut ties with five loan collection agencies it said were providing misleading information to student loan borrowers.

The administration also plans to create a single clearinghouse that would let people who are paying back student loans check up on their accounts and track their payments, instead of leaving that up to individual agencies.

The new rules will apply to federal student loans, not loans acquired personally from banks or other financial institutions.

“Every American should have the right to go as far as their talents and hard work will take them,” Obama said Tuesday. “That is what college is all about. That is what America is all about.”

On Wednesday, the White House was hosting a live question-and-answer session on Twitter about student loans with Cecilia Munoz, director of the president’s Domestic Policy Council.


Images via the Georgia Institute of Technology.