Obama to offer help for student borrowers
The aim is to ensure that students can afford to go to college and will be able to repay their loans once they graduate.
"I believe, as you believe, that higher education is one of the best investments that anyone can make in their future," Obama told students at Georgia Tech in Atlanta. "And it's one of best investments you can make in your country's future."
The president signed a memorandum directing the Department of Education to develop a new system for students to file a complaint when there's a problem with their loans.
This will give students "a way to ask questions about their loans, file a complaint, cut through bureaucracy and get faster response," said Obama.
The DOE and the contractors it uses to service billions of dollars in federal student loans will also be held to higher standards.
They will be required to do more to alert borrowers when they fall behind on a payment or when the contractor managing the loan changes.
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In addition, payments must be put towards loans with highest interest rates first, so that more expensive loans are paid off faster, unless a borrower says otherwise.
"The businesses that service your loans will be clear about what your options are," said Obama.
The administration will ensure that debt collectors do not charge student borrowers excessive fees and help them get back on track when a loan is past due. It will also clarify how student debt is treated in bankruptcy court and will work with the Treasury Department to help students with income-based repayment plans.
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Obama to offer help for student borrowers