President Barack Obama signed the Student Aid Bill of Rights on March 10, proposing 19 executive actions to provide student loan borrowers with additional rights and resources to receive and pay off student aid.
The four articles of the bill of rights pledge to give every student the rights to quality and affordable education, a reasonable and affordable payment plan, a new customer service system and reliable information on the nation’s colleges and universities. More than 40 million Americans currently have some level of student loan debt.
“I believe that America is not a place where higher education is a privilege that is reserved for the few,” Obama said at a speech at the Georgia Institute of Technology. “America needs to be a place where higher education has to be available for every single person who’s willing to strive for it, who’s willing to work for it.”
The proposed actions include simplifying the Free Application for Federal Student Aid, increasing the maximum Pell Grant award by almost $1,000 and implementing Obama’s Pay as You Earn plan, which creates an income-based repayment program to allow students to cap federal aid payments at 10 percent of their income.
While the bill could expand opportunities for student borrowers, the effectiveness of the bill will depend on whether the president’s request for funding is granted in the budget process, which will start this week on Capitol Hill.
Both the House and Senate Budget Committees have indicated that they want to limit domestic spending and reduce revenues while increasing defense spending. Georgetown University Associate Vice President for Federal Relations Scott Fleming (SFS ’72) noted that this would dampen the potential for Obama’s program.
Despite this cause for concern, Fleming said the government could come to some agreement concerning student aid resources and make changes in entitlement programs, increase revenues or raise caps on domestic and defense spending.
According to Fleming, providing student loan borrowers with additional resources would help Georgetown students, many of whom receive both institutional and federal aid. However, he expressed concern regarding the proposed college rating system, which aims to provide students with reliable statistics on graduation rates, incomes of graduates, average tuitions and fees paid at the nation’s colleges and universities.
“I find that very worrisome that they are using averages a lot because … there are a good number of Georgetown students from low-income families who basically, combining federal aid and institutional aid, go to Georgetown for very little,” Fleming said. “If you are a kid from a low-income family, and you are looking at averages, you would think there was no way in the world you could go here.”
Fleming was also worried by a proposal in the president’s budget to replace the current Public Service Loan Forgiveness program, a program which forgives student loan payments for people who have been in public service for 10 years, with the all-encompassing Pay As You Earn program. Fleming said the change would give students less incentive to find jobs in non-profit organizations and public service.
“It’s important to an institution like Georgetown because of the large numbers of graduates of Georgetown who go into public service,” Fleming said. “If they cap loan forgiveness, like the president proposes, that removes the incentive for people to take public service jobs.”
Nora Gordon, an associate professor specializing in the economics of education at Georgetown’s McCourt School of Public Policy, was also skeptical whether resources offered by the bill of rights would help Georgetown students in particular but praised proposed improvements to the FAFSA.
“I think that students that go to elite institutions have much more refined information about the quality of those institutions then is going to be captured in any of type of report card,” Gordon said. “My guess is the reason they want to have this is for low-quality schools, to make sure students know about schools, especially with a lot of two year colleges and schools with extremely low graduation rates, before they borrow a lot of money to pay for them.”
Gordon also said that customer service resources and complaint systems could benefit Georgetown students, who likely have difficulties locating where to go when they encounter problems with their lenders.
“[If] there is better oversight of lenders and more attention to customer service, the bill will be good for borrowers, which includes Georgetown students,” Gordon said. “It seems that people don’t just have problems repaying their loans but run into problems with their lenders and find it hard to adjust repayment.”
Georgetown University College Democrats Chair Matt Gregory (COL ’17) added that even if the bill does not directly affect many Georgetown students, it could pave the way for future actions to protect student loan borrowers.
“Many students, especially in the middle class, graduate having over $12,000 in loans,” Gregory said. “Even if it is more of a symbolic gesture, it will create a path for future administrations to create something concrete. … [Students] will have more information, be able to make better and informed decisions and won’t be as trapped by potentially predatory lenders.”