Student Aid Bill of Rights To Help Ensure Affordable Loan Repayment

This memorandum directs multiple federal agencies to implement stronger consumer protections for the more than 40 million Americans with student loan debt. It establishes deadlines for creating a complaint system, improving loan servicing standards, protecting distressed borrowers including those with disabilities, and exploring regulatory changes to bankruptcy and consumer protection laws.

Federal Register Open PDF 80 FR 13475

Impact dates

Date TBD
Direct servicers to apply prepayments to highest interest rate loans
Date TBD
Establish centralized point of access for all Federal student loan borrowers
Oct 1, 2017
First annual complaint report published, and annually thereafter
Jan 1, 2017
Develop and implement five behaviorally designed pilot programs
Jul 1, 2016
Develop and implement complaint and feedback system
Jul 1, 2016
Report initial findings of Treasury debt collection pilot
Jan 1, 2016
Require enhanced loan servicer disclosures and consumer protections
Jan 1, 2016
Begin quarterly debt collection performance reports
Jan 1, 2016
Report pilot findings on borrower communication methods
Oct 1, 2015
Report on optimal way to address student complaints about institutions
Oct 1, 2015
Recommend information-sharing process with enforcement agencies
Oct 1, 2015
Report on defense to repayment and consumer protection changes
Oct 1, 2015
Report on IRS income data sharing feasibility for income-driven repayment
Aug 1, 2015
Task force reviews performance-based contracting recommendations
Jul 1, 2015
Implement fair debt collection standards for defaulted loans
Jul 1, 2015
Issue bankruptcy undue hardship guidance
Jul 1, 2015
Develop plan to identify SSDI borrowers eligible for disability discharge

Key directives

Develop state-of-the-art complaint and feedback system by July 1, 2016
Require enhanced loan servicer disclosures by January 1, 2016
Implement fair debt collection standards by July 1, 2015
Develop SSDI disability discharge plan by July 1, 2015
Establish centralized loan repayment access portal
Convene quarterly interagency task force
Issue bankruptcy undue hardship guidance by July 1, 2015
Develop five behaviorally designed pilot programs by January 1, 2017
Apply prepayments to highest interest rate loans

Who is ordered

Timeline

Immediate

OMB and Education Secretary convene quarterly interagency task force on student loan portfolio trends

Near term (90d)

July 1, 2015: fair debt collection standards implemented
July 1, 2015: bankruptcy undue hardship guidance issued
July 1, 2015: SSDI disability discharge plan developed
August 1, 2015: task force reviews performance-based contracting recommendations
October 1, 2015: report on optimal way to address student complaints about institutions
October 1, 2015: information-sharing process recommended to President
October 1, 2015: report on defense to repayment and consumer protection changes
October 1, 2015: report on IRS income data sharing for income-driven repayment

Long term

January 1, 2016: enhanced loan servicer disclosures required
January 1, 2016: quarterly debt collection performance reports begin
January 1, 2016: pilot program findings on borrower communication reported
July 1, 2016: complaint and feedback system operational
July 1, 2016: Treasury debt collection pilot findings reported
January 1, 2017: five behaviorally designed pilot programs implemented
October 1, 2017: first annual complaint report published

Risks & tensions

Many deadlines require only reports and recommendations to the President, not binding implementation
Subject to availability of appropriations may limit execution
Quarterly task force and pilot programs create ongoing bureaucratic overhead without guaranteed outcomes
Defense to repayment and bankruptcy law changes require congressional action, creating tension between executive recommendations and legislative authority
SSDI benefit protection plan depends on interagency coordination with Social Security Administration