The Obama Administration has proposed a definition for "gainful employment" to protect students and taxpayers from getting
ripped off by career education programs that over-charge and
under-deliver. While this is a major step in the right direction, the rules need to be strengthened to adequately protect students and taxpayers.
July 1 will bring several significant changes to federal student loans
that benefit new and current borrowers. Some interest rates will
decrease, and updated rules for Income-Based Repayment (IBR) will bring
fair treatment to married borrowers and those who owe more than when
they finished school. Also, all federal student loans made on or after
July 1 will be Direct Loans, which come straight from the U.S.
Department of Education. This will save taxpayers tens of billions of
dollars by eliminating a parallel program that subsidized private
lenders to make the same federal loans.
Big Wins for Students in Final Financial Reform Bill
On July 21, President Obama signed historic
financial reforms into law, including the creation of a much-needed Consumer Financial
Protection Bureau (CFPB) with authority over risky private student
loans. The legislation contains big wins for students and borrowers,
although it does not have everything we sought.
On April 22 Congressman Steve Cohen chairedahearingon private loans and bankruptcy. Senator Dick Durbin and Congressman Cohen recently introduced legislationto make private student loans dischargeable in bankruptcy.
The Institute for College Access & Success
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