Today, Congresswoman Laura Richardson applauds President Obama for issuing a memorandum to the Secretary of Education Arne Duncan and Treasury Secretary Timothy Geithner instructing them to improve the means by which responsible borrowers receive information about student loan repayment options. The Presidential Memorandum issued today calls on Secretaries Duncan and Geithner to ensure that responsible borrowers are cognizant of the student loan repayment options available to them, and directs the Department of Education to remove any unnecessary hurdles in the Income-Based Repayment (IBR) application process.
The Presidential Memorandum will enhance online and mobile resources for loan repayment options and debt management, increase awareness of IBR, and streamline the IBR application process.
"I am encouraged by the President's action to help college students and recent graduates manage their student loan debt more effectively by increasing awareness about the options that are available to them," said Congresswoman Laura Richardson.
"The President's plan to make information related to student loan repayment more accessible and interactive will go a long way in helping those suffering under the burden of student loan debt make informed financial decisions," said Congresswoman Richardson.
The Income Based Repayment plan assists responsible borrowers by allowing them to cap monthly payments on their federal student loans at 15 percent of their discretionary income. As a result of an executive order issued by President Obama as part of his "We Can't Wait" initiative, borrowers enrolled in IBR will be able to cap their monthly payment on federal student loans at 10 percent by the end of this year.
"By increasing awareness of the Income Based Repayment plan and streamlining the application process, more borrowers will be able to take advantage of this program which assists eligible borrowers reduce monthly payments," said Congresswoman Richardson.
"With the unemployment rate for college graduates under the age of 25 exceeding the national average, the President's announcement could not have come at a better time. These common sense steps to make information more easily accessible are welcome because, like the President has said repeatedly, we can't wait! That is why I have introduced legislation to provide student loan debt relief for recent college graduates searching for employment" said Congresswoman Richardson.
H.R. 5801, the Unshackling Students to Lead, Excel, Act, Develop and Succeed Act, or "U.S. LEADS Act," would assist recent college graduates who are entering a difficult job market by allowing them to defer payment on their federal student loans without accruing interest when the national unemployment rate exceeds seven percent, or when the unemployment rate for 21-25 year olds exceeds nine percent.
"Students who have worked hard and played by the rules deserve the peace of mind in knowing that they will not be crushed by the weight of their student loan debt if they are unable to retain gainful employment as soon as they graduate from college. The U.S. LEADS Act offers a practical, long-term solution to the student loan debt crisis," said Congresswoman Richardson.
Congresswoman Richardson is a Democrat from California's 37th Congressional District. She is a member of the House Committees on Transportation & Infrastructure and Homeland Security and is chair of the Homeland Security Subcommittee on Emergency Communications, Preparedness and Response. Her district includes Long Beach, Compton, Carson, Watts, Willowbrook and Signal Hill.