Updated: March 12, 2015 at 9:04 p.m.
President Barack Obama signed a presidential memorandum Tuesday to make it easier for students to afford college and pay off loans.
The executive action will push the Department of Education to create a state-of-the-art complaint system for students to use and allow simpler monthly payments for paying back loans. It will also mean creating additional ways for the federal government to analyze student debt trends for legislative and regulatory changes in the future.
“We need the tools to make sure that students can get a good education but also that they aren’t loaded down with huge debt,” Obama said Wednesday on a conference call with college journalists. “We’ve got to encourage higher education. And as everyone on this call knows, it’s never been more expensive.”
The president said the memorandum will help universities lower costs and help students “cut through bureaucracy” when paying off debt. The average undergraduate student accumulates $28,000 of student loan debt, he said.
Obama also announced the launch of his Student Aid Bill of Rights during a speech at the Georgia Institute of Technology on Tuesday, aiming to make it easier for those with student loans to understand and manage paying back their debt. Anyone can sign the document online.
“We want congressmen to sign up. We want state legislators and governors to sign up. We want college administrators to sign up and students and parents,” Obama said. “I want to mobilize this entire country around the issue of college affordability.”
Secretary of Education Arne Duncan said that by July 2016, borrowers will be able to file complaints about federal student aid directly to the Department of Education. Congress still has to approve the funding in the upcoming budget.
“It’s our responsibility to make sure the 40 million Americans with student loans are aware of resources to help them manage their debt, and we want to do everything we can to be responsive to their needs,” Duncan said.
Ted Mitchell, the under secretary of the Department of Education, said private universities, like GW, will be incentivized to lower tuition because the department’s nationwide scorecard allows students to compare the cost of attendance among institutions, and more expensive schools will be put in direct competition with public universities, which offer less expensive rates.
“Transparency plus a little healthy competition is going to influence all sectors of higher education,” Mitchell said.
College affordability has been a trademark of Obama’s administration: Earlier this year, the president sent a proposal to Congress to make two-year community college free. Five years ago this month, Obama enacted the biggest student loan reform in the country’s history by expanding the Pell Grant to $1,000 per student and capping loan payments at 10 percent of borrowers’ incomes.
GW has long been deemed one of the most expensive schools in the country, though it has since fallen from the ranks of the nation’s most expensive colleges.
The Board of Trustees approved a 3.5 percent cost of attendance increase for incoming freshmen in February, raising the price of tuition, fees and room and board to $62,285. That marks the eighth-straight year of about 3 percent sticker price increases, and the second year in a row that GW’s total cost of attendance has topped $60,000.
University spokesman Kurtis Hiatt said GW officials support federal efforts to make student borrowers’ options more transparent. The University has grown student aid in recent years through efforts like a philanthropic giving program, he said.
“GW also remains committed to the goal of making a George Washington education accessible to all who qualify for admission, and has significantly increased student aid in the last several years, including launching the Power and Promise Initiative to increase philanthropic giving for student aid,” Hiatt said in a statement.
