[Federal Register Volume 79, Number 113 (Thursday, June 12, 2014)]
[Presidential Documents]
[Pages 33843-33845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-13961]
Presidential Documents
Federal Register / Vol. 79, No. 113 / Thursday, June 12, 2014 /
Presidential Documents
[[Page 33843]]
Memorandum of June 9, 2014
Helping Struggling Federal Student Loan Borrowers
Manage Their Debt
Memorandum for the Secretary of the Treasury[, and] the
Secretary of Education
A college education is the single most important
investment that Americans can make in their futures.
College remains a good investment, resulting in higher
earnings and a lower risk of unemployment.
Unfortunately, for many low- and middle-income
families, college is slipping out of reach. Over the
past three decades, the average tuition at a public
four-year college has more than tripled, while a
typical family's income has increased only modestly.
More students than ever are relying on loans to pay for
college. Today, 71 percent of those earning a
bachelor's degree graduate with debt, which averages
$29,400. While most students are able to repay their
loans, many feel burdened by debt, especially as they
seek to start a family, buy a home, launch a business,
or save for retirement.
Over the past several years, my Administration has
worked to ensure that college remains affordable and
student debt is manageable, including through raising
the maximum Pell Grant award by nearly $1,000, creating
the American Opportunity Tax Credit, and expanding
access to student loan repayment plans, where monthly
obligations are calibrated to a borrower's income and
debt. These income-driven repayment plans, like my Pay
As You Earn plan, which caps a Federal student loan
borrower's payments at 10 percent of income, can be an
effective tool to help individuals manage their debt,
and pursue their careers while avoiding consequences of
defaulting on a Federal student loan, such as a damaged
credit rating, a tax refund offset, or garnished wages.
While my Administration has made significant strides in
expanding repayment options available to borrowers and
building awareness of income-driven repayment plans,
more needs to be done. Currently, not all student
borrowers of Federal Direct Loans can cap their monthly
loan payments at 10 percent of income, and too many
struggling borrowers are still unaware of the options
available to them to help responsibly manage their
debt.
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. Expanding the President's Pay As You Earn
Plan to More Federal Direct Loan Borrowers. Within 1
year after the date of this memorandum, the Secretary
of Education shall propose regulations that will allow
additional students who borrowed Federal Direct Loans
to cap their Federal student loan payments at 10
percent of their income. The Secretary shall seek to
target this option to those borrowers who would
otherwise struggle to repay their loans. The Secretary
shall issue final regulations in a timely fashion after
considering all public comments, as appropriate, with
the goal of making the repayment option available to
borrowers by December 31, 2015.
Sec. 2. Improving Communication Strategies to Help
Vulnerable Borrowers. By December 31, 2014, the
Secretary of Education shall develop, evaluate, and
implement new targeted strategies to reach borrowers
who may be struggling to repay their Federal student
loans to ensure that they have the information they
need to select the best repayment option and avoid
[[Page 33844]]
future default. In addition to focusing on borrowers
who have fallen behind on their loan payments, the
Secretary's effort shall focus on borrowers who have
left college without completing their education,
borrowers who have missed their first loan payment, and
borrowers (especially those with low balances) who have
defaulted on their loans to help them rehabilitate
their loans with income-based monthly payments. The
Secretary of Education shall incorporate data analytics
into the communications efforts and evaluate these new
strategies to identify areas for improvement and build
on successful practices.
Sec. 3. Encouraging Support and Awareness of Repayment
Options for Borrowers During Tax Filing Season. By
September 30, 2014, the Secretary of the Treasury and
the Secretary of Education shall invite private-sector
entities to enter into partnerships to better educate
borrowers about income-based repayment plans during the
tax filing season in 2015. Building off of prior work,
the Secretaries shall further develop effective ways to
inform borrowers about their repayment options during
the tax filing season in 2015, as well as through
personalized financial management tools.
Sec. 4. Promoting Stronger Collaboration to Ensure That
Students and Their Families Have the Information They
Need to Make Informed Borrowing Decisions. By September
30, 2014, the Secretary of Education, in consultation
with the Secretary of the Treasury, shall develop a
pilot project to test the effectiveness of loan
counseling resources, including the Department of
Education's Financial Awareness Counseling Tool. The
Secretary of Education shall convene higher education
experts and student-debt researchers to identify ways
to evaluate and strengthen loan counseling for Federal
student loan borrowers. Additionally, the Secretaries
shall collaborate with organizations representing
students, teachers, nurses, social workers,
entrepreneurs, and business owners, among others, to
help borrowers represented by these organizations learn
more about the repayment options that are available to
them in financing their investment in higher education
and managing their debt, and to provide more
comparative, customized resources to those borrowers
when possible.
Sec. 5. 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
(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.
[[Page 33845]]
(d) The Secretary of Education is hereby authorized and
directed to publish this memorandum in the Federal
Register.
(Presidential Sig.)
THE WHITE HOUSE,
Washington, June 9, 2014
[FR Doc. 2014-13961
Filed 6-11-14; 11:15 am]
Billing code 4000-01