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Understanding President Obama’s Student Aid Bill of Rights Initiative


March 13, 2015
by Suada Kolovic
The financial aid process can be a daunting one but if you're planning on attending college any time soon, you should know that there are tons of federal student aid options available. From Pell Grants to Perkins Loans to the FAFSA, the funding is out there but your eligibility to receive aid depends on your level of need and, subsequently, how much aid you are eligible to receive. Translation: For the majority of students, loans are inevitable. But don't fret just yet because President Obama announced the Student Aid Bill of Rights initiative to help student borrowers with the challenging student loan process.

The financial aid process can be a daunting one but if you're planning on attending college any time soon, you should know that there are tons of federal student aid options available. From Pell Grants to Perkins Loans to the FAFSA, the funding is out there but your eligibility to receive aid depends on your level of need and, subsequently, how much aid you are eligible to receive. Translation: For the majority of students, loans are inevitable. But don't fret just yet because President Obama announced the Student Aid Bill of Rights initiative to help student borrowers with the challenging student loan process.

What it does:

  • Helps borrowers keep track of their student loans. For years, consumer groups and colleges have been warning that borrowers with more than one servicer are losing track of their loans — and winding up in default as a result. The Education Department acknowledged those concerns last fall, when it adjusted some institutions' "cohort default rates," or the share of borrowers who default on their loans within a certain time frame.
  • Make it easier for borrowers to file complaints involving their student aid. Right now, borrowers can file complaints with a variety of agencies, including the Consumer Financial Protection Bureau, the Department of Veterans Affairs, and the Defense Department. But there isn't a centralized website where all borrowers can lodge their grievances against lenders, servicers, debt collectors, and colleges.

What it doesn't do:

  • Prevents students from overborrowing in the first place. Many of the challenges that student-loan borrowers face in loan repayment are the result of unmanageable debt. After all, if borrowers could afford their loan payments, they wouldn't have to turn to income-based repayment or deal with debt collectors.
  • Overhaul student-loan debt collection. They want the government to handle debt collection itself. But the president's plan merely talks of "raising standards" for student-loan debt collectors, and it’s pretty vague about what those higher standards would look like.

For more on the president's Student Aid Bill of Rights, head over to The Chronicle of Higher Education. . What do you think of the president's attempt to ease the financial burden associated with student loans? Share your thoughts in the comments section. And don't forget, going to college doesn't have to break the bank! Check out our Financial Aid section for more info on federal funding and while you're there, conduct a free college scholarship search where you'll get match with countless scholarships, grants and other financial aid opportunities!

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Discuss

Share your thoughts and perhaps thousands of students will benefit from your unique insight on the subject!



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Alan J  on  11/1/2015 8:29:19 PM commented:

I believe that the way thing are constructed now will hurt the parents. Then if the parent can't get a loan then the student is stuck with a school bill. Then the school kick them out and now the student is subjected to bad credit because of he financial aid is not there for them. This is not fair to the student or the family. There no help for the lower middle class people. It sad because the congress is ensuring that college is out of reach. People don't be fool open your eyes and see what going on. The have and have not. There no money for the have not.

Crystal H.  on  3/19/2015 8:47:23 PM commented:

What about people that become disabled? Right now if you become disabled you have to wait and see if they decide to change your rechecks from yearly to 5-7 years before you can apply for a forgiveness. So until you have to apply every year for a forbearance of some kind.

Paige W  on  3/18/2015 9:55:13 AM commented:

For the sole purpose of helping students out, I feel this is a really small attempt. It's making things easier, but what? Making it easier to borrow money, and pay it back for years and years later? Let's have a bill where students know how to apply for scholarships. Where they are learning how to be involved enough in their community to prep them for their finances. We need to be educate on how to lessen our debt, not just how to manage it.

Sharon L  on  3/18/2015 4:46:29 AM commented:

Sounds like this bill will be about as effective and useless as the Obamacare Act. Supporting and enabling the poor and the rich while crippling the middle class... Again. I can't afford college, I make too much for financial aid but not enough to get private loans. Does that make sense? Obama, I suggest you look at the real problem instead of your idea of the problem. This is going to be just another useless bill.

Colleen  on  3/18/2015 2:45:11 AM commented:

On the first part, " helps borrowers keep track of their loans" This being part to the the various servicers. What the GOVERNMENT and Obama did not state or should I say admit, is the reason students need help keeping track of their loans is because the the servicers are CHANGED CONSISTENTLY BY THE GOVERNMENT. Students that have to apply for different loans or are already paying are bounce from servicer to servicer and the worse part is they all tell you something different, leaving you confused and frustrated. The government is giving loans to non-citizens, as well, instead of putting citizens first. College fees are out of control and their is no cap, but then again so is medical insurance but Obama got that wrong why would he get this right!!!!

Anthony B  on  3/17/2015 9:36:27 PM commented:

I am a college graduate student who finished in August of 2010 . I have been out of school for almost 5 years and I have not yet found a job with my Bachelor's Degree. I had scammers who tried to get @ me quick just for the money and I found out when I called the General Department of Education to bring it to a representative attention and she gave me the right information of who to be mindful of. The scammers who got to me were Student Debt USA, RAM who drafted $235.00 out my account and they had to refund my money back so watch out for those 2 scammers ! I had another scammer who told me that I had to send them 5 payments of $199.00 and said that the government will wipe the rest of my debt off which was a lie ! There is a program called Public Service Loan Forgiveness where you work for a qualified employer full time and complete your 120 qualifying payments and the rest of your loans will be forgiven meaning you will not have to pay anything else ..

wilfredo  on  3/17/2015 6:10:00 PM commented:

There is not enough aid for students like myself, who work and have an income above poverty line. College is just too expensive even in community colleges that only cover two years. Then state universities do not offer enough financial aid to force students into private loans.

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