President Obama signed a Presidential Memorandum yesterday, directing the Secretary of Education and the Secretary of the Treasury to work together on four student loan initiatives over the upcoming year. Referring to his own student loans, President Obama noted that “… [a]t a time when higher education has never been more important, it’s also never been more expensive. Over the last three decades, the average tuition at a public university has more than tripled. At the same time, the typical family’s income has gone up just 16 percent.”
According to the Memorandum, President Obama directed:
1. the Secretary of Education to propose regulations to expand the Pay as You Earn program to more federal direct borrowers. This repayment option should be available to more borrowers by December 31, 2015;
2. the Secretary of Education to develop, evaluate and implement new “targeted strategies” to reach borrowers struggling to repay their loans. Students who have defaulted on their loans, fallen behind on their loan payments or who left college without a degree were specifically mentioned;
3. the Secretaries of Education and the Treasury to invite private sector organizations by September 30, 2014 to enter into partnerships to better education borrowers about their income based repayment options during the 2015 tax filing season; and
4. the Secretaries of Education and the Treasury to develop a pilot project by September 30, 2014 to test the effectiveness of existing loan counseling resources.