President Obama announced a series of executive actions Tuesday aimed at helping higher-education students pay off their loans, and at the same time infusing them with the power to demand better repayment terms from third-party lenders.
He planned to formally unveil the “Student Aid Bill of Rights” during his scheduled stop and speech at the Georgia Institute of Technology, USA Today reported.
The gist of the plan directs the Department of Education and other pertinent federal agencies to broaden the protections afforded students who’ve taken out loans for college, and to grant requests for more flexible repayment plans.
Obama is planning on enacting his vision by issuing a series of dicates to the Department of Education that will then lead to the creation of a central complaint system. This complaint system will give “enhanced disclosures and stronger consumer protections” for students to pay back their loans, US News reported. Obama is also going to order loan services that are contracted to do business with the federal government to apply extra payments to the loans with the highest interest rates first, rather than spread out the additional money over the various different of loans.
Among the specifics of the “Student Aid Bill of Rights” are provisions that guarantee every student “access to a quality, affordable education at a college that’s cutting costs and increasing learning” as well as “access [to] the resources needed to pay for college,” US News reported. The bill of rights also states that “every borrower has the right to an affordable repayment plan [and] quality customer service,” the right to up-to-date data and to fair treatment, the news outlet said.
Some student groups have already cheered the executive action.
“We’re thrilled to see President Obama taking a significant step to give students struggling with poor loan servicing and deceptive debt collection practices a voice through a centralized complaint system,” said Jen Mishory, executive director of the youth advocacy group Young Invincibles, the news outlet reported. “Additionally, students have told us for years that tracking loans across multiple servicers confuses the repayment process; a central point of access for monitoring student loan rates should minimize this challenge.”
Obama’s executive action comes just a couple weeks after the Department of Education cut ties with five private debt collectors because they were found to be giving out inaccurate information.