The Biden administration recently announced a finalized plan to enhance oversight of higher education institutions and strengthen consumer protections for student loan borrowers. U.S. Secretary of Education Miguel Cardona stated, “We are raising the bar for accountability and making sure that when students invest in higher education, they get a solid return on that investment and a greater shot at the American dream.”
Some of the new rules focus on safeguarding borrowers in the event of school closures and ensuring students are well-informed about their rights and responsibilities regarding student loans. Starting on July 1, 2024, colleges receiving Title IV financial aid will be required to offer adequate financial aid counseling, including details on costs and types of aid available. They must also provide comprehensive career services to students.
Families can expect to see standardized financial aid award offers, making it easier to understand college expenses and the types of aid that need to be repaid. This initiative aims to increase awareness of true college costs and reduce student loan debt, which currently exceeds $1.7 trillion in the U.S.
Additionally, the Biden administration plans to prohibit colleges from withholding transcripts of students who are behind on their bills. By allowing more students to transfer colleges and apply for jobs, this policy change aims to provide greater opportunities for individuals seeking higher education.
The average student loan balance at graduation has tripled since the ’90s, now averaging $30,000 compared to $10,000 previously. These new regulations aim to alleviate the financial burden on students and provide them with the support and information needed to make informed decisions about their education.
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