Another Step Forward Under the Student Aid Bill of Rights

Earlier this year, President Obama unveiled a Student Aid Bill of Rights to ensure strong consumer protections for student loan borrowers and issued a Presidential Memorandum to begin making those rights a reality. Last month, as part of that directive, the Department of Education announced a number of new steps we are taking to help Americans manage their student loan debt, including:

  • Protecting Social Security benefits of Borrowers with Disabilities who may qualify for a loan discharge or other repayment options.
  • Changing the debt collection process so that it is fairer, more transparent, and more reasonable.
  • Providing clarity on borrowers seeking a discharge in bankruptcy.

Today, as another step forward in implementing the Student Aid Bill of Rights directives, Federal Student Aid (FSA) released the recommendations from an interagency task force on best practices in performance based contracting to better ensure that servicers help borrowers make affordable monthly payments. As directed by the Presidential memorandum, the task force reviewed input from its members in July. Now that these recommendations (pdf) have been finalized, they will inform the upcoming process of recompeting our servicing contracts prior to the expiration of the existing contracts.

Even ahead of that process, FSA has been taking steps to improve borrower service as it continues the transformation of the nation’s student loan program following the President’s landmark student loan reform.  Many of these steps are in concert with the recommendations of the interagency task force. Key steps include:

  • Ongoing development of an enterprise complaint system to track and support complaint resolution across all aspects of aid delivery, including servicing.
  • Targeted email campaigns to borrowers regarding available repayment options,  including campaigns related to IDR enrollment.
  • Enhanced performance metrics and incentive-based pricing for Federal loan servicers to ensure consistency and accountability while creating additional incentives to focus on reduced delinquency and default, more effective borrower counseling and outreach, and enhanced customer satisfaction.
  • Development and implementation of a robust enterprise data warehouse and analytics capability to support research of the portfolio.
  • Designing and implementing a quarterly delinquency reduction compensation program to provide additional incentives for success in reducing delinquency in payments among our largest servicers’ portfolios with the greatest number of at risk borrowers.
  • Increased focus on military service members, including a match with DOD to proactively provide service members with SCRA benefits,
  • Enhanced loan counseling and the ability for borrowers to select their repayment plan based on their individual circumstances during exit counseling.
  • Enhanced communication with and tools for borrowers including repayment calculators, loan consolidation application, and online application for income-driven repayment.
  • A pilot to test different approaches for curing delinquent loans.

We are also working with our partners at the U.S. Department of the Treasury and the CFPB to continually improve the federal student lending program. For example, we are working with Treasury and the CFPB on how to improve credit reporting for student loans. In addition, as highlighted in a recent CFPB blog, Education, Treasury and the CFPB continue to work together to ensure student loan borrowers are aware of and can access affordable monthly payments. For Federal student loans, FSA and its servicing contractors have been certifying and enrolling, on average, over 5,000 borrowers per day into IDR plans over the past year. Enrollment in IDR plans has increased more than 50% over the past year and is at an all-time high.

Helping Americans manage their student loan debt has been a core priority of this Administration. In the coming weeks and months, we’ll continue to carry out the steps the President laid out in March and to take additional action to make college more affordable and ease the burden of student loan debt.


  1. I, too, have been used by the schools but has nothing to show but a but a certicate from a bible college I attened 2013. The problem is at 63 and a person with several disabilties- I now ,by trials and errors know a little more than back in 2000-2013. With noone guiding or advising me for my best interests. I “m rejected here in Tucson because the pell grant limited 5 years is up. Although the loan people has forgiven the loans, I still can’t get in and there is no criteria that will fasa to extend to my goal as a much needed social worker here in Tucson,Az. Help. what can I do? I have a fixed income so low- I can barely eat or buy meds, and forget clothes, tithing, or blessing someone else in my community. Its awful and inhumane. all my 4 grown kids were either service connecte or have retired from the military.

  2. Schools need broader authority to decline a requested loan increase. Much if not most student loan borrowing is unnecessary, but because of the lack of meaningful loan limits at the graduate level ($20,500 per semester up to $138,500 total in Staffords, plus unlimited Graduate Plus loans), income based repayment (payments are limited based on earnings, not based on actual loan balance) and the ability to borrow for personal expenses, there are quite a few students that take advantage of this program. Of the schools I have observed, somewhere between half and two thirds of all borrowing is for personal expenses, not tuition and fees.

    Schools need to say no to awarding more loans more often.

  3. I agree with the first comment made. In Jan. 2007, I requested a fraud alert with the credit bureaus. Three months later, I was provided an extended-fraud alert from Equifax. I am now on my second extended-fraud alert. It is obvious that the Dept of ED. can put whatever #s they want on credit disclosure files and NSLDS. In 2007, Direct Loans capitalized interest on my Title IV loans two more times by retro-actively adding two new sequence lines. This made for a total of three capitalization amounts. I was being run through three title IV programs. I had three title IV loans on me. One of the loans was through the Federal government and the another was private. I am not sure about the third. This got really messy with the Title III (Perkins) loans that have to be kept on the same accounting sheet with government loans and separate on private loans. Even messier was when I was the only merit-scholar in the only science and engineering program at Savannah College of Art and Design. I guess this is why Campus Partners (Wachovia) was back dating, rearranging account ledger sequence lines and deleting sequence lines. Both the Savannah College of Art and Design and the University of Alabama were banking out-of-state. Why the U.S. S.E.C. prohibits this and not the Dept. of ED I do not know. When I get a “GRAMM-BLEECH- LILLEY ACT, I am disgusted. I can disprove what it says about being accurate easily with documentation. In 2012 or six years after I last attended college, a different Title IV loan appeared on my Equifax report. A government loan is being slid out and a private loan has replaced the original. I know. I did not consolidate. ALL my correspondence I send ED is forwarded to Dawn Scaniffe of ED Office of General Counsel. She never did answer my questions like “why did my unsubsidized loan interest amounts change on NSLDS to reflect that of subsidized loan interest amounts?” Now, she does not respond at all. I just filed a complaint with CFPB and they forwarded my complaint to ED’s Ombudsman. This office forwarded it to Dawn Scaniffe. She has yet to return my calls. I emailed the whistle blower hotline just a moment ago. ED is so corrupt. FERPA laws need to change. You know who I am Arnie Duncan. Tell Inspector Kathleen to follow up on the letter from DOJ she received. It would take a novella to explain what all I have experienced. Lastly, I have not been on University of Alabama campus since June 5, 2007. I am reported to be graduated in 2010 from the university. What did I get a degree in?

    • scammed is the word. at 63, my opitions are very limited. now that the schools and loans have made all they can or want off this nieve senior citizen-they won’t even be decent enough to help me try again now that i’v finally figured out its about using the students ,even their elders, as merchandise. its a shame only a brken heart and tears can express. I do know however, that the God and creator of al and everything will soon cast his divine judgement on these unethical and unjust of all the trickery used to trap and decieve an unsuspecting people. let me know if I can help in any way- any way. God bless. oh, how can I go back to school and be the best social service person to come to this sorely lacking region?

  4. These are mighty meager recommendations. They don’t deserve to be part of anything with the grand title of Bill of Rights.

  5. Seriously, it’s hard to believe that you’re actually going to enact things things when you’re making a profit off of student loan debt and student loan default to begin with. And the only reason that more people know about the IVR now is because it’s become a profit center for consolidation companies. How is this to be taken seriously when Sallie Mae and Navient have been under repeated investigations that have shown students and our vets have been preyed upon, yet not only do they get away with it, but are rewarded with a larger government contract than previously. When the cfpb has repeatedly investigated these entities and filed lawsuits, when multiple State Attorney General’s have filed investigations yet they are allowed to continue to service student loans. When even judges have come forward and stated that the nature of student lending and consumer protections need to be revamped. When Banks who hold student loan debt are continually fined for abusive practices are find but never actually held accountable. When Corporations have bankruptcy protection, gamblers have bankruptcy protection, businesses with millions of dollars in assets have bankruptcy protections. If you truly wanted to help students you would our consumer protections and get rid of the interest that is charged on these loans. Some people have paid their original Balance more than once and still have more than the original borrowed amount to be paid back. All student loan debt both private and Federal need to have the interest, penalties and fees waived and consumer protections returned at the very least. And considering the total amount of tuition paid out for 2014 was 69 billion dollars , and the government spent 77 billion dollars on Pell grants and other hodgepodge subsidies, there is no reason at all why college should not br free.Shame on you people for what you have done to the economy.You should at the very least, immediately if not sooner, recommend that Congress repeal 11 USC 523(a)(8) in its entirety.

    • I think attacking the U.S. Department of Education is misguided and misses the mark. If you sign a promissory note to repay a debt you incurred, then you should pay it back. Period. What loan company should be required to work, implement thousands of pages of regulations, maintain records and service loans and borrowers for free?? That is just crazy! If there weren’t penalties for non-payment then it would be a grant program and not a loan program. With attitudes like this no wonder the U.S. is in the state it’s in. Everyone wants something for nothing. If students would stop borrowing loads of money for overpriced schools the situation would change. Do your homework before you borrow and you wouldn’t be in over your head financially. It’s simple supply and demand people. You can’t borrower $225,000 to attend a plush school, become a teacher making $35,000 a year and then complain about it. It’s simple math. I don’t think hard working student loan people should be punished for your poor planning. And I’m speaking in general terms to the collective ‘you’.

      • What does a person do when tuition goes way up during the four years attending. What does a person do when they have loans they did not get being reported to the credit bureaus?

    • Based on my experiences, ED does what it wants to do. I have had a Federal loan slid off my credit files and a private loan slid in. Title III loans are supposed to be kept on the same accounting sheet for Federal loans and on separate accounting sheets for private loans. I have so much documentation that shows serious fraud with student loans. Some of the documents were acquired by luck. I can only imagine what I would see if I could get access to all my financial history. FERPA laws need to change as well

  6. Does this mean that Private Collection Agency on the large vendor contract, Premiere Credit of North America, is going to have to get rid of the 4,000 gallon SHARK TANK in the lobby of their offices in Fishers, Indiana?

    Get rid of the crooked thug PCA (Private Collection Agencies) program. The PCA’s add NO VALUE to the process and are often the biggest impediment to student debt repayment. Them and the useless state guarantee agencies, the third party, for profit servicing companies, and other thoroughly for-profit businesses that have barnacled themselves to higher education borrowing.

    Better yet, understand that at $1.3 Trillion and spiralling ever higher, the student debt mess now has 40 million+ borrowers (and their families) in its clutches. Student debt is poisoning the greater economy and, due to the draconian collection scheme to which ED insists on clinging, is a national disgrace.

  7. The Department of Education is a predatory lender. You people have been profiting on defaults for decades. You should be ashamed of yourselves. You should recommend that Congress repeal 11 USC 523(a)(8) in its entirety. immediately.

    If you do not, student loans will become one large, national joke and almost no one will pay. Nor should they.

    That is absolutely your only move at this point.

    Shame on you people.

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