In a speech … at the Georgia Institute of Technology, President Obama … announce[d] a Student Aid Bill of Rights and sign[ed] a presidential memorandum directing federal agencies to take steps to help borrowers repay their debt.
The memorandum will require the Education Department to create a new complaint system in which borrowers can log grievances against lenders, loan servicers, collection agencies, and colleges. It will also establish a central portal where federal borrowers can view information about all of their loans, regardless of their servicer.
The memorandum will also require loan servicers and debt collectors that work under contract with the department to change how they operate. Servicers will have to provide “enhanced disclosures and stronger consumer protections” throughout the repayment process, and ensure that prepayments are first applied to loans with the highest interest rates. Debt collectors will need to ensure that their fees are reasonable and to help borrowers return their loans to good standing, among other things. <Read more.>