Dive Brief:
- In a visit to Georgia Tech Tuesday, President Barack Obama announced “policy tweaks and projects” to make it easier for people to repay their student loan debt.
- The changes will require loan servicers to be clearer about repayment schedules and offer reasonable options for getting out of default, Obama said.
- According to Reuters, Obama has asked the Treasury Department, Education Department, and Consumer Financial Protection Bureau to examine bankruptcy and other laws, and to report back by Oct. 1 about whether any further changes should be made to support student loan holders.
Dive Insight:
The U.S. Department of Education recently dropped five of its loan collection contractors for unscrupulous practices toward student loan holders, and the latest Obama appearance reinforces a commitment to addressing what some call a student loan crisis in this country. Reuters reports that the average student who takes out loans for a bachelor’s degree graduates with $28,400 in student loan debt. Those at the extreme end of that continuum especially struggle to get on their feet, secure a good job, and stay up-to-date on payments. This latest initiative may give them an easier path toward bankruptcy as a way to get out of repayment, though that option has long been resisted by the lending industry.