President Barack Obama told students at Georgia Tech on Tuesday he wants to make the process of repaying student loans easier to understand and manage.
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Obama signed a “student aid bill of rights” and spelled out an assortment of policy tweaks and projects to try to make it easier for people with student loans to pay back their debt.
“We're going to require that the businesses that service your loans provide clear information about how much you owe, what your options are for repaying it, and if you're falling behind, help you get back in good standing with reasonable fees on a reasonable timeline,” Obama told a raucous crowd of more than 9,500 students.
“We're going to take a hard look at whether we need new laws to strengthen protections for all borrowers, wherever you get your loans from,” Obama said.
Obama has asked the Treasury and Education departments and the Consumer Financial Protection Bureau to report by Oct. 1 on whether bankruptcy laws or other laws or regulations should be changed for student loans.
The lending industry has resisted loosening bankruptcy standards for student loans, but advocates have argued students burdened by heavy debt should be able to more easily use that as a way to discharge their obligations.
The review will focus on private student loans that do not carry protections given to federal student loan borrowers, such as the ability for borrowers with permanent disabilities to discharge loans, an administration official said.
The White House said 40 million Americans have student loans. More than 70 percent of U.S. students who graduate with a bachelor’s degree leave with debt, which averages $28,400.
The White House said it will require clearer disclosures from companies to make sure borrowers understand who is servicing their loan and how to set monthly payments and change repayment plans.
Obama will direct his Education Department to create a system by July 1, 2016, to better oversee and address complaints from borrowers about lenders, servicers and collection agencies, the White House said.
(By Roberta Rampton; Editing by Susan Heavey, Nick Zieminski and Lisa Shumaker)