Helping Struggling Federal Student Loan Borrowers Manage Their Debt

This memorandum directs the Secretaries of Education and Treasury to expand income-driven student loan repayment options, improve borrower outreach and communication strategies, develop public-private partnerships for tax-season education, and pilot enhanced loan counseling tools. It aims to make Pay As You Earn available to more Federal Direct Loan borrowers by December 2015 and targets struggling borrowers including dropouts, first-time defaulters, and those with low balances.

Federal Register Open PDF 79 FR 33843

Impact dates

Dec 31, 2015
Goal for expanded repayment option to be available to borrowers
Jun 9, 2015
Secretary of Education shall propose regulations expanding Pay As You Earn
Dec 31, 2014
Secretary of Education shall develop, evaluate, and implement new targeted communication strategies
Sep 30, 2014
Secretaries of Treasury and Education shall invite private-sector partnerships for tax-season 2015 outreach
Sep 30, 2014
Secretary of Education shall develop pilot project for loan counseling resources

Key directives

Secretary of Education shall propose regulations within 1 year to expand Pay As You Earn to more Federal Direct Loan borrowers, with goal of availability by December 31, 2015
Secretary of Education shall develop, evaluate, and implement new targeted communication strategies by December 31, 2014
Secretaries of Treasury and Education shall invite private-sector partnerships by September 30, 2014 for tax-season 2015 outreach
Secretary of Education shall develop loan counseling pilot project by September 30, 2014
Secretary of Education authorized and directed to publish memorandum in Federal Register

Who is ordered

Timeline

Immediate

Memorandum issuance directs regulatory and planning activities to begin

Near term (90d)

By September 30, 2014: Treasury-Education partnerships for tax-season outreach invited; pilot project for loan counseling to be developed

Long term

By December 31, 2014: New targeted communication strategies developed and implemented; by December 31, 2015: Expanded Pay As You Earn repayment option available to additional borrowers

Risks & tensions

Regulatory timeline ambitious: proposed rules within 1 year with goal of implementation by December 2015; actual rulemaking may face delays
Effectiveness depends on borrower awareness and uptake, which prior efforts have struggled to achieve
Subject to availability of appropriations may limit implementation scope
No private right of action created, limiting enforceability