Federal agencies to do more to help borrowers afford their monthly student loan payments.

On March 10, 2015 the White House announced that President Obama would  sign a Presidential Memorandum directing the Department of Education and other federal agencies to work across the federal government to do more to help student loan borrowers afford their monthly loan payments including: (1) a state-of-the-art complaint system to ensure quality service and accountability for the Department of Education, its contractors, and colleges, (2) a series of steps to help students responsibly repay their loans including help setting affordable monthly payments, and (3) new steps to analyze student debt trends and recommend legislative and regulatory changes.

A Student Aid Bill of Rights

In addition, the Administration is releasing state by state data that shows the outstanding federal student loan balance and total number of federal student loan borrowers who stand to benefit from these actions.   This move underscores his vision for an affordable, quality education for all Americans in a Student Aid Bill of Rights which he started five year ago.  

A Student Aid Bill of Rights:

  1. Every student deserves access to a quality, affordable education at a college that’s cutting costs and increasing learning.
  2. Every student should be able to access the resources needed to pay for college. 
  3. Every borrower has the right to an affordable repayment plan. 
  4. And every borrower has the right to quality customer service, reliable information, and fair treatment, even if they struggle to repay their loans. 

For students with existing loans - don’t hold your breath that this will actually bring some timely relief. When the administration changes so will the focus on these types of programs.

Note from Diane: For those who are considering taking students loans – do not take out more student loans than you can afford to reasonably pay over a period of 10 years. Critically analyze your chosen employment market and determine how much you can reasonably expect to be paid.  Reduce that amount by at least 35%.  Now you might be looking at your financial reality for the five year period after graduation.   But, if you are considering a career in a market that is saturated, then expect to find work far outside your chosen career and income far below the expected rate.  It that case it will most likely take you 20 or more years to pay back the student loans, if ever within your income producing life.   Be very careful about your decision to borrow student loans.