President Obama Unveils New Student Aid Bill Of Rights

By Katy Hopkins, Communications Staff 

The president announced on Tuesday a new “declaration of values” for higher education students and asked for online signatures from anyone who agrees.

“In order to spur more of a conversation, we’re going to try something new. It’s not a fancy new program; it doesn’t have a complicated acronym. It’s just a simple organizing principle, “ Obama said during a speech at the Georgia Institute of Technology. “The Student Aid Bill of Rights says every student deserves access to a quality education.”

The Student Aid Bill of Rights has four tenets to ensure that students have the information and resources necessary to afford college and repay loans if they borrow. The president is asking anyone who agrees students should have access to the principles to sign on online.

“We want everybody who agrees with these principles to sit down and work with us and figure out how they can make these student rights real,” Obama added.

The Bill of Rights and accompanying Presidential Memorandum have similar recommendations to NASFAA’s recent Servicing Issues Task Force report. Like NASFAA, the president is calling on the Department of Education (ED) to create a centralized portal in which borrowers could get information on, and pay down, their student loans. The president has also asked ED to develop an online student aid complaint system, which would allow borrowers to monitor their tickets and would double as a way to aggregate better data on issues and trends.

The presidential memorandum also moves to improve student loan servicing for borrowers, including the notification to borrowers of transfer between servicers, a change NASFAA supports. In addition, the memorandum encourages important consumer testing, asking for reports on two current behavioral pilot studies on how borrowers receive information about servicing and how they choose repayment plans, and for future pilot studies thereafter. 

 

Publication Date: 3/11/2015


David S | 3/11/2015 2:44:53 PM

This all sounds good; we can all agree with most of this (although the growing arguments against what the President is referring to in item #3, affordable repayment plans, is troubling). But the bottom line is that even if students read and understand all information out there about borrowing (and of course, many neither read nor understand any of it no matter what we do), if they're not making enough money while in repayment to make those monthly payments, little has been accomplished. No student borrows with fears that they someday won't be able to repay...if they've gotten as far as enrolling in college, I would hope that they're optimistic about their future. Nobody plans to be unemployed or earning very little money later.

But if this initiative can at least result in very standardized policies and procedures and reliable information from servicers, that will help. It's the "affordable college education" and "easily find the resources they need to pay" parts that I'm concerned about.

Kimberly J | 3/11/2015 12:43:59 PM

While I agree these issues are real and this proposed Student Aid Bill of Rights is an attempt to open doors for those who feel the dream of a higher education is unattainable, there are many other topics to consider. This is not a cut and dry topic. There are also choices on the student's part involved. Choosing an institution that is affordable also comes into play here. Perhaps access to front end counsleing that is more robust than what is currently being offered.

Currently financial literacy is not a required course for students to take. If this could become a mandated course required for all students, receiving financial aid or not, students could better understand the end result of the choices they make. Maybe this course should be added at the 9-12 grade level so there is already a background there before a student looks into what school would be the best choice for them both financially and academically.

Again, I feel this is a start, but will not ultimately solve the issues at hand.

Daniel S | 3/11/2015 11:37:04 AM

These four tenets are either too broad and vague, or advocating things that are already available.

I - Define "high-quality" and "affordable," please.
II - Your parents, hard work (academically), hard work (earning income through employment), not to mention www.fafsa.gov.
III - IBR and Employment-based Loan Forgiveness Programs?
IV - Contact and work with your loan servicer. Most students I speak to are surprised with how pleasant they can be.

Stacy H | 3/11/2015 9:9:14 AM

Not long ago, we were a nation without the lending practices we have today. Perhaps money well spent should focus on financial education as part of the core curriculum that is offered in schools. Students need a history of financial education before coming to college.

Lori V | 3/11/2015 8:56:37 AM

Transparency, accountability and making loan repayment something borrowers can actually afford to do is taking things in the right direction! At least someone is looking at this issue now. It sure seems like a good week in the FA profession to me!

Theodore M | 3/11/2015 8:45:35 AM

I think these are all great ideas, but who is going to provide the funding for the first two? Certainly neither the feds nor states are going to be providing more money soon. If you are a dependent undergrad and don't qualify for Pell, the $5500 in Direct Loan doesn't pay tuition at some community colleges.

For most schools, there isn't money to cover the rest. Maybe if we get the free community college thing going first, there might be a chance.

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