Crippling debt has long been one of the most prominent drawbacks of gaining a college education according to the New York Times; however, President Barack Obama introduced his “Student Aid Bill of Rights,” which contests that the government should take a proactive role in aiding students with their loans.
According to a USA Today article published on March 10 titled, “Obama Signs ‘Student Aid Bill of Rights,’” the President stated that the average college student who takes a loan graduates with about $28,000 in student loan debt. Therefore, Obama is trying to alleviate these financial concerns for struggling students.
After signing a memorandum to declare the “Bill of Rights,” Obama traveled to Georgia Institute of Technology to explain the inner-workings of the program.
The program is an intricate series of directives that aim to make the loan-payment process as effortless as possible. Obama urges the Department of Education to implement more forms of repayment and introduce new rules for third-party organizations that collect loan payments.
One of the main problems that students face after college is properly planning their loan repayment. Students often feel taken advantage of by third-party organizations, as the payment options may be difficult to fulfill.
The plan suggests that one website needs to be created on which students can access their loan information and another website on which the borrowers can file complaints about loan providers. Therefore, there will be no confusion or disagreements as to when a repayment is to be made.
“Every borrower has the right to an affordable repayment plan,” Obama said at Georgia Tech. “Every borrower has the right to quality customer service, reliable information, and fair treatment, even if they struggle to repay their loans.”
Paul Dement, Director of Government and Community Relations at the University, said that the initiative could be beneficial for students. “President Obama’s initiative on the student aid bill of rights looks to be a positive step in protecting and assisting student borrowers,” he said.
“The executive action could make it easier for borrowers to stay up-to-date on payments by requiring lenders to be more transparent and providing more accountability for the companies who manage the student loans to help borrowers who fall behind in their payments,” continued Dement. Additionally, he believes it will establish a centralized complaint system for student borrowers to address issues with lenders.
Despite the advantages, Dement does have some concerns about the complexities of the program. He said that Obama plans to “raise standards” for debt collectors and claims that there will be “higher standards for student loan servicing,” as well as “enhanced disclosure” and “strengthened consumer protections.” However, Dement points out that the specific details on how these goals will be achieved are unclear.
Moreover, University President Paul Brown said that he agrees with Obama’s initiative, as it is hard to argue against greater transparency and accountability for lenders. As Brown notes, according to the Federal Reserve of New York, the median wage of an American with a bachelor’s degree was $48,000 in 2014, which is 63 percent higher than the $25,052 earned by workers with a high school diploma.
Nonetheless, Brown still has some concerns about the details of the initiative. Despite the potential positive effects of the bill, Brown points out that the program fails to recognize important aspects of education.
“What the executive action does not address directly is the cost of higher education. In my opinion, this is one of the biggest challenges facing the higher education industry,” said Brown.
“There is a lot of concrete evidence to support the value of a college degree, and even more telling, according to the Bureau of Labor Statistics, there will be an 18 percent increase in jobs requiring a master’s degree by 2018,” added Brown. “So, while the ‘value proposition’ is there, we remain a costly endeavor for many students and their families.”
Moon Ho Kim, a freshman marketing student, said that the bill is important. “It will give more students the opportunity to attend college. As the repayment process is simplified, students will not be as fearful of attending college,” said Kim.
In addition to the “Student Aid Bill of Rights,” Obama proposed a plan that enables qualified students to attend two years of community college for free. These initiatives have not come close to reaching Congress, though.
The overall reception of the program has been positive, as the main theme, to make lenders more transparent and accountable, is favored by all.
“Keeping overall costs down for students is something that is important to me personally, and of utmost importance to every member of my senior staff,” said Brown. “Each investment in campus safety, facilities that serve the needs of current and future students, and new academic opportunities, are debated fiercely and weighed carefully, always with the goal of providing an outstanding academic experience while limiting the financial burden to our students.”
Brown continued, “As with any legislative initiatives that affect our students, we will continue to monitor any changes to the overall lending process and do our best to help students navigate the process.”
IMAGE TAKEN from gradplanet.com
