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The New "Student Aid Bill of Rights" Could Improve Debt for Many Borrowers

Last week President Obama proposed the "Student Aid Bill of Rights", which offers improvement to borrowers dealing with student loans. This loan improvement hopes to make things simpler and easier for when it comes to paying back student loans. 

This reforming bill is said to have many benefits to student loan borrowers. Here are just a few important ways this new bill will provide helps to debtors:

· There will be a website created solely for the purpose that student loan borrowers will no longer get confused by letters from private collectors of student loans. Borrowers will be able to view all their loans on one central website, along with how much they have paid and what they still owe.

· The bill will stop private collectors from collecting on loans and instead federal employees will collect on debts. This will stop the barrier of private collectors being unaware of borrowers' rights under the Higher Education Act, and also give the government more oversight of debt collection activities.

· The new bill will make the disability discharge rules more clear and consistent for any borrower who qualifies. As of now borrowers do not even realize that they are eligible for disability discharge, but with the new change they will be able to identify if they could receive disability discharge.

· The bill will ensure that private debt collectors will apply prepayments to the debt with the highest interest rate, unless a borrower clearly states that they want their payment applied differently.

· Students will get easier access to IRS information so that they will see if they qualify for Income-Base Repayment to pay back loans.

· The government and federal bankruptcy courts have made it difficult for student loan borrowers to declare bankruptcy on their debt more than any other type of debt. However, under this new bill Obama asks for the rules on bankruptcy to be clarified so that borrowers at least know where they stand with student loan debt and bankruptcy.

Student loans and bankruptcy are two very serious and difficult matters in a borrower's life. If you seem over whelmed and lost for a way out, please contact an attorney who is there to guide you to a debt free life.

We at Timothy J. Sierra Attorney at Law would like to state that our blog posts and links, on our web page or any other social media outlet, to any other web pages are not intended for legal advice. We are not responsible for third party website information. If one is in need of legal advice please contact an attorney directly.

Work Cited:

6 Ways the New 'Student Aid Bill Of Rights' Will Help Borrowers (Time)

http://time.com/money/3739531/student-aid-bill-of-rights-student-loans/

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