Today, President Obama signed a memo called the Student Aid Bill of Rights.
Through this memo, he plans on changing student loan regulations to make repayment easier, as of July 1st, 2016. Also, he intends to establish and ensure strong consumer protections for student loan borrowers.
Phew. These are welcome news, indeed.
Notable fact: This isn’t the first time federal student loan regulations have been majorly overhauled on July 1st. In both 1987 and 1993, on July 1st, new deferments were created and old ones were dismissed.
Among the specific instructions included in Obama’s memo are:
- for the government to create a website where students can see ALL their federal loans in one place (this has been a major issue for students with multiple loans, as well as those whose loans have been sold by one lender to another)
- for that website to include a spot where borrowers can file complaints about loan servicers (the CFPB already has a place to file complaints, but I think another one would be great, too)
- for the Education Department and the Consumer Financial Protection Bureau to determine whether more government rules are needed to keep student loan servicers in line
- for student loan companies to apply early payments from borrowers to loans with the highest interest rates (this is especially good news, as payment targeting makes a big difference in savings)
Also, two quick things:
1. Obama’s memo specifically targets student loan companies like Sallie Mae/Navient that contract with the government to collect on federal student debt.
2. Because of this Bill, these companies will be required to better inform borrowers about their repayment options and notify them when they are delinquent on payments.
All in all, a good thing. You can read the Student Aid Bill of Rights for yourself over at this link.
So, What Now?
Basically, all you need to do is stay tuned and bear witness to what the implementation of the Student Aid Bill of Rights will look like, as it comes into being over the next few months. The media will be making plenty of noise about it, so you probably won’t miss any updates.
Also, your wisest move is to take a look at your student debt portfolio as it is right now.
Are you clear on all your loans, when you took them out, your interest rates and your repayment options for each loan?
Are you comfortable with your monthly payments, in touch with your rights as a borrower and feeling completely at ease about your repayment?
If you are, good!
If you aren’t (yet), I encourage you to schedule a free consultation with me, by clicking on this link.
Like I always tell my clients, the sooner you take action on your student debt, the better. Regardless of what the federal government does, and how long it takes, you have the power to feel better about your student debt right now.
I’ll be very glad to offer you a free help assessment, and your family member/spouse is welcome to join us during our call.
I look forward to being of help! You can also forward me any of your Q’s to info(at)student-loan-consultant(dot)com.