Are you looking for a Fresh Start?

Department of Education vs. Obama

Obama has become the poster boy for the Democratic Party, accomplishing universal health care, legalizing gay marriage, recovering a nation in an economic crisis, and solving countless other problems during his presidency.  One of the last issues he hopes to improve before leaving office is student loan reform.  He has gone after corrupt career training programs and other corporations that burden students with debt and has issued his own program.

The dubbed “Student Aid Bill of Rights” consists of opening communication between borrowers and lenders and ensuring borrowers are given reasonable fees they can pay off. Consumer complaints are to be handled in a more timely manner by compiling the complaints sent to the Department of Education and then being sent to the proper organizations so consumer’s questions and concerns may be answered.  Also, many borrowers are confused over where to send their payments to or even who their lender is. The creation National Student Loan Data System went practically unnoticed as many students are unaware of its existence. To solve this cog in the system, Obama created a “single portal for all Federal loans to be serviced through – regardless of lender.”

Federal student loan borrowers can benefit from the executive act expanding the “Pay as You Earn” program “caps monthly payments at 10 percent of a borrower’s disposable income and forgives the balance after 20 years of payments.”  Only newer borrowers use to be able to take advantage of this plan but now borrowers who took out loans before October 2007 or stopped borrowing by October 2011 can use this program. All of these changes are expected to take place at the end of 2015 continuing into 2016.

However, the one unexpected enemy against this is the Department of Education. Instead, they gave “a green light to the loan holders’ aggressive strategy of fighting virtually every case in which undue hardship is claimed in bankruptcy court.”  The DOE was directed to do the exact opposite of this and assist parties filing for undue hardship by informing them if their case would be accepted or not in bankruptcy court.  Now it seems the DOE is going to suffocate borrowers under a legal stack of appeals, delays, and other tactics that a government agency shouldn’t be doing.

Student loans debt in America has amounted to 1.2 trillion dollars which is higher than credit card debt. Although the DoE needs to collect on this debt, their methods in doing so are completely skewed. The White House has not responded to this obvious bird being flashed at them, but a response should be expected soon if they intend on avoiding further damage when handling this delicate issue.