Presidential Documents

13475 

Federal Register 

Vol. 80, No. 49 

Friday, March 13, 2015 

Title 3— 

The President 

Memorandum of March 10, 2015 

Student Aid Bill of Rights To Help Ensure Affordable Loan 

Repayment 

Memorandum for the Secretary of the Treasury[,] the Secretary of 

Education[,] the Commissioner of Social Security[,] the Director of the 

Consumer Financial Protection Bureau[,] the Director of the Office of 

Management and Budget[,] the Director of the Office of Science and Technology Policy[, and] the Director of the Domestic Policy Council 

America thrived in the 20th century in large part because we had the 

most educated workforce in the world. Today, more than ever, Americans 

need knowledge and skills to meet the demands of a growing global economy. 

Since many students borrow to pay for postsecondary education, it is imperative they be able to manage their debt as they embark on their careers. 

My Administration has taken historic action to ensure that college remains 

affordable and student debt remains manageable. We have eliminated tens 

of billions of dollars in student loan subsidies paid to banks in order 

to increase the maximum Pell grant by nearly $1,000 and provide a path 

for borrowers to limit payments on many student loans to 10 percent of 

income, and we have worked with the Congress to enact the American 

Opportunity Tax Credit, worth $10,000 over 4 years of college. We have 

promoted innovation and competition to bring down college costs, increased 

completion rates, and given consumers clear, transparent information on 

college performance. 

College remains an excellent investment, and student loans enable many 

who could not otherwise do so to access further education. However, there 

is more work to do to help students repay their loans responsibly. In 2013, 

college graduates owed an average of $28,400 in Federal and private loans. 

More than one in eight Federal borrowers default on their loans within 

3 years of leaving school. My Administration has already put in place 

significant protections that ensure borrowers with credit cards and mortgages 

are treated fairly. We can and should do much more to give students affordable ways to meet their responsibilities and repay their loans. 

Now is the time for stronger protections for the more than 40 million 

Americans with student loan debt. All student loan borrowers should have 

access to an efficient and responsive complaint and feedback system that 

holds loan servicers accountable and promotes transparency, the information 

and flexibility they need to repay their loan responsibly and avoid default, 

and protections to ensure that they will be treated fairly even if they struggle 

to repay their loans. 

Therefore, by the authority vested in me as President by the Constitution 

and the laws of the United States of America, I hereby direct the following: 

Section 1. State-of-the-Art Complaint and Feedback System. 

(a) Complaints and Feedback Regarding Federal Financial Aid. By July 

1, 2016, the Secretary of Education shall develop and implement a simple 

process for borrowers to file complaints regarding Federal financial aid, 

including those pertaining to lenders, loan servicers, private collection agencies, and institutions of higher education. The process shall allow people 

to file a complaint and monitor its progress toward resolution. In addition, 

the Department of Education will provide data from the complaint system 

to other enforcement agencies that are responsible for oversight of Federal 


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student loan lenders, loan servicers, private collection agencies, and institutions of higher education. By October 1, 2017, and annually thereafter, 

the Department of Education shall publish a report summarizing and analyzing the content in and resolution of borrower complaints and feedback 

received through the process. By October 1, 2015, the Secretary of Education 

shall report to the President, through the Director of the Domestic Policy 

Council and the Director of the Office of Management and Budget, on 

the optimal way to address other student complaints regarding institutions 

of higher education that participate in Federal student financial aid programs. 

(b) Coordination Among Other Enforcement Agencies. By October 1, 2015, 

the Secretary of Education shall, in consultation with the Director of the 

Consumer Financial Protection Bureau, recommend to the President, through 

the Director of the Domestic Policy Council and the Director of the Office 

of Management and Budget, a process for sharing information with relevant 

enforcement agencies so that those enforcement agencies may refer matters 

where there may be violations of consumer protection law. 

Sec. 2. Helping Borrowers Repay Their Loans and Avoid Default. 

(a) Higher Standards for Federal Direct Loan Servicing. By January 1, 

2016, the Secretary of Education shall require all Federal Direct student 

loan servicers to provide enhanced disclosures to borrowers and strengthened 

consumer protections. These disclosures and consumer protections shall 

be improved throughout the loan repayment process, and shall include 

disclosures to borrowers regarding loan transfers from one servicer to another 

and notifications when borrowers become delinquent or have incomplete 

applications to change repayment plans. As soon as practicable, the Secretary 

shall direct all Federal Direct student loan servicers to apply prepayments 

to loans with the highest interest rate to ensure consistency across servicers, 

unless otherwise instructed by borrowers. 

(b) Regular Review of Student Loan Performance and Borrower Trends. 

The Director of the Office of Management and Budget and the Secretary 

of Education shall convene quarterly an interagency task force consisting 

of the Department of the Treasury, Department of Education, Office of Management and Budget, and Domestic Policy Council to monitor trends in 

the student loan portfolio, budget costs, and borrower assistance efforts. 

No later than August 1, 2015, the task force shall review recommendations 

for the Department of Education from its members and the Consumer Financial Protection Bureau on best practices in performance-based contracting 

to better ensure that servicers help borrowers responsibly make affordable 

monthly payments on their student loans. 

(c) Additional Protections for Student Loan Borrowers. By October 1, 2015, 

the Secretary of Education, in consultation with the Secretary of the Treasury 

and the Director of the Consumer Financial Protection Bureau, shall issue 

a report to the President, through the Director of the Domestic Policy Council 

and the Director of the Office of Management and Budget, on (i) whether 

statutory or regulatory changes are needed to current provisions that permit 

the Secretary of Education to specify acts or omissions at institutions of 

higher education that borrowers may assert as a defense to repayment of 

a direct loan; and (ii) after assessing the potential applicability of consumer 

protections in the mortgage and credit card markets to student loans, recommendations for statutory or regulatory changes in this area, including, 

where appropriate, strong servicing standards, flexible repayment opportunities for all student loan borrowers, and changes to bankruptcy laws. 

(d) Higher Customer Service Standards in Income-Driven Repayment Plans. 

By October 1, 2015, the Secretary of Education and the Secretary of the 

Treasury shall report to the President, through the Director of the Domestic 

Policy Council and the Director of the Office of Management and Budget, 

on the feasibility of developing a system to give borrowers the opportunity 

to authorize the Internal Revenue Service to release income information 

for multiple years for the purposes of automatically determining monthly 

payments under income-driven repayment plans. 


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(e) Finding New and Better Ways to Communicate with Student Loan 

Borrowers. By January 1, 2016, the Secretary of Education shall report to 

the President, through the Director of the Domestic Policy Council, on the 

findings of a pilot program to test new methods for communicating with 

borrowers who have Federal Direct student loans on which they are at 

least 140 days delinquent but which have not entered default. By January 

1, 2017, the Secretary shall also, in consultation with the Director of the 

White House Office of Science and Technology Policy, develop and implement at least five behaviorally designed pilot programs to identify the most 

effective ways to communicate with borrowers to maximize successful borrower repayment and help reduce delinquency and default and report to 

the President, through the Director of the Domestic Policy Council, on the 

status and results of those pilot programs. 

(f) Making it Easier for Federal Direct Student Loan Borrowers to Repay 

Their Student Loans. As soon as practicable, the Secretary of Education 

shall establish a centralized point of access for all Federal student loan 

borrowers in repayment, including a central location for account information 

and payment processing for all Federal student loan servicing, regardless 

of the specific servicer. 

Sec. 3. Fair Treatment for Struggling and Distressed Borrowers. 

(a) Raising Standards for Student Loan Debt Collectors. By July 1, 2015, 

the Secretary of Education shall implement actions to ensure that the debt 

collection process for defaulted Federal student loans is fair, transparent, 

charges reasonable fees to defaulted borrowers, and effectively assists borrowers in meeting their obligations and returning to good standing. By 

January 1, 2016, the Secretary of Education shall publish a quarterly performance report on the Department’s private debt collection agency contractors 

that includes the underlying data, disaggregated by contractor. 

(b) Providing Clarity on the Rights of Borrowers in Bankruptcy. By July 

1, 2015, the Secretary of Education shall issue information highlighting 

factors the courts have used in their determination of undue hardship, 

to assist parties who must determine whether to contest an undue hardship 

discharge in bankruptcy of a Federal student loan. 

(c) Protecting Social Security Benefits for Borrowers with Disabilities. By 

July 1, 2015, the Secretary of Education and the Director of the Office 

of Management and Budget, in consultation with the Commissioner of Social 

Security, shall develop a plan to identify Federal student loan borrowers 

who receive Social Security Disability Insurance (SSDI) and determine which 

beneficiaries qualify for a total and permanent disability discharge of their 

student loans under the Higher Education Act of 1965. The plan shall 

specify a process for the Secretary of Education to stop collection on qualified 

borrowers in order to ensure that SSDI benefits are not reduced to repay 

student loans that are eligible for discharge. In addition, the Secretary of 

Education and the Director of the Office of Management and Budget, in 

consultation with the Commissioner of Social Security, shall identify the 

best way to communicate with other SSDI recipients who hold student 

loans about their repayment options, including income-driven plans, and 

assist them in entering those plans. 

(d) Debt Collection Pilot Program. By July 1, 2016, the Secretary of the 

Treasury, in consultation with the Secretary of Education, shall report to 

the President, through the Director of the Domestic Policy Council and 

the Director of the Office of Management and Budget, on the initial findings 

of an ongoing pilot program that uses the Department of the Treasury’s 

Bureau of the Fiscal Service to collect on a sample of defaulted Federal 

student loan debts to help determine how to improve the collection process 

for defaulted Federal student loans. 

Sec. 4. General Provisions. (a) Nothing in this memorandum shall be construed to impair or otherwise affect: 

(i) the authority granted by law to an agency, or the head thereof; or 


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13478 Federal Register / Vol. 80, No. 49 / Friday, March 13, 2015 / Presidential Documents 

(ii) the functions of the Director of the Office of Management and Budget 

relating to budgetary, administrative, or legislative proposals. 

(b) This memorandum shall be implemented consistent with applicable 

law and subject to the availability of appropriations. 

(c) This memorandum is not intended to, and does not, create any right 

or benefit, substantive or procedural, enforceable at law or in equity by 

any party against the United States, its departments, agencies, or entities, 

its officers, employees, or agents, or any other person. 

(d) The Secretary of Education is hereby authorized and directed to publish 

this memorandum in the Federal Register. 

THE WHITE HOUSE, 

Washington, March 10, 2015 

[FR Doc. 2015–05933 

Filed 3–12–15;11:15 am] 

Billing code 4000–01 


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