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White House Student Loan Efforts Continue



The United States government is gradually creating a solution to the student loan issue that many Americans find themselves facing. In order to improve the current situation, the Obama administration is giving Americans more options and is requiring that the Department of Education initiates new marketing campaigns to better educate borrowers.

As of March, "7.9 million people had not made a payment on $121 billion in student loans for at least nine months," according to the Department of Education. Surprisingly, many of the borrowers are unaware that they may be eligible for certain repayment options regarding their student loans. It is critical that this information is communicated to the borrowers from the beginning. Unfortunately for most, it is being communicated after it is too late.

Researchers found that, "70% of people in default were actually qualified for a lower monthly payment through an income-based plan," according to the Government Accountability Office. These borrowers had the eligibility to lower payments, but were unaware that such a thing existed. By developing new marketing campaigns that openly share repayment options, the Obama administration hopes to prevent borrowers from defaulting on their student loans. Although it may be too late for some, it will be helpful for those that are nearing the possibility of defaulting for a first or even a second time.

New guidelines are going to be immediately put into place. These guidelines will add to the borrower's rights to receive accurate and consistent information as well as training the staff to communicate all possible options. "Currently, there are no market-wide federal rules for how servicers are supposed to operate. The administration is pledging to hold servicers accountable for fixing errors, being responsive and resolving problems," according to the Department of Education.

Other changes are being made to StudentLoans.gov. In the past, borrowers have undergone entrance and exit counseling. Now, these counseling sessions will be updated based on current issues in order to reduce borrower misconceptions.

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.

Source: Washington Post | Student Loans

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