President To Announce ‘Student Aid Bill of Rights’ To Help Borrowers Pay Student Loans
ATLANTA, March 10 (UPI) — President Barack Obama will announce a “Student Aid Bill of Rights” on Tuesday at Atlanta’s Georgia Institute of Technology directing government agencies to help students repay loans.
The bill aims to increase transparency and increase fairness in terms of fees.
Plans would require that third-party lenders inform borrowers about more available repayment options and that extra payments made go to pay off loans with the highest interest first.
“Every student deserves access to a quality, affordable education at a college that’s cutting costs and increasing learning,” the White House said, as tenets of the bill. “Every student should be able to access the resources needed to pay for college.”
A new website where students can access all information regarding their loans will be created and another will be created where borrowers can file complaints, as well.
The bill would also continue an initiative that will enroll people to a repayment plan where they pay off loans based on income. It would also look to see if laws can be changed to allow student loans to be discharged through bankruptcy.
“Every borrower has the right to an affordable repayment plan,” the White House said. “Every borrower has the right to quality customer service, reliable information and fair treatment, even if they stubble to repay their loans.”
Student loan debt reached $1.3 billion at the end of last year. About 11 percent of loans are delinquent, with no payments being made for at least 90 days.
“Student loan debt is the only form of consumer debt that has grown since the peak of consumer debt in 2008,” the New York Federal Reserve said. “Balances of student loans have eclipsed both auto loans and credit cards, making student loan debt the largest form of consumer debt outside of mortgages.”
In January, Obama cancelled plans to end tax breaks for 529 college savings plan after backlash from parents and lawmakers on both sides of the aisle.
The White House said fewer than 3 percent of Americans use 529 accounts and 70 percent of those who do earn more than $200,000 per year.
The U.S. House of Representatives passed a bill increasing the benefits of 529 accounts in late February.
