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 Obama signed a “student aid bill of rights” and spelled out an
assortment of policy tweaks and projects to try to make it easier
for people with student loans to pay back their debt.
“We're going to require that the businesses that service your loans
provide clear information about how much you owe, what your options
are for repaying it, and if you're falling behind, help you get back
in good standing with reasonable fees on a reasonable timeline,”
Obama told a raucous crowd of more than 9,500 students.
“We're going to take a hard look at whether we need new laws to
strengthen protections for all borrowers, wherever you get your
loans from,” Obama said.
Obama has asked the Treasury and Education departments and the
Consumer Financial Protection Bureau to report by Oct. 1 on whether
bankruptcy laws or other laws or regulations should be changed for
student loans.
The lending industry has resisted loosening bankruptcy standards for
student loans, but advocates have argued students burdened by heavy
debt should be able to more easily use that as a way to discharge
their obligations.
The review will focus on private student loans that do not carry
protections given to federal student loan borrowers, such as the
ability for borrowers with permanent disabilities to discharge
loans, an administration official said.
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The White House said 40 million Americans have student loans. More
than 70 percent of U.S. students who graduate with a bachelor’s
degree leave with debt, which averages $28,400.
The White House said it will require clearer disclosures from
companies to make sure borrowers understand who is servicing their
loan and how to set monthly payments and change repayment plans.
Obama will direct his Education Department to create a system by
July 1, 2016, to better oversee and address complaints from
borrowers about lenders, servicers and collection agencies, the
White House said.
(Editing by Susan Heavey, Nick Zieminski and Lisa Shumaker)
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