President Barack Obama is aiming to clamp down on the private companies that service federal student debt with a presidential memorandum he will issue on Tuesday. Obama’s policy tweaks, to be unveiled during a speech at Georgia Tech in Atlanta, don’t require new legislation from Congress — a plus as far as the White House is concerned. But they won’t be earth-shattering for student-borrowers, either. Instead, the new steps seek to tilt the student lending process more toward the student, with a particular focus on graduates struggling to make their monthly payments. ‘We are trying to enhance the borrower experience from beginning to end,’ said Ted Mitchell, the Education Department’s under secretary for higher education. Obama’s memorandum targets third parties like Sallie Mae/Navient that contract with the government to collect on federal student debt. Those companies will be required to better inform borrowers about their repayment options and notify them when they are delinquent on payments, the White House said. The president is also instructing the government to create a website where students can see all their federal loans in one place — a major problem for students with multiple loans, as well as those whose loans have been sold by one lender to another. He’s also asking for a single website where borrowers can file complaints about loan servicers, in an apparent recognition that customer service for student borrowers has often been shoddy in the past. Although Obama has long lamented the burden placed on young Americans and the broader economy by student debt and college affordability, he’s run into obstacles that have limited his efforts to improve the situation.
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