Politics

Obama Aims to Clamp Down on Federal Student Loan Servicers

Published

9 years ago

March 10, 2015

President Barack Obama signs a presidential memorandum aiming to clamp down on the private companies that service federal student debt, Tuesday, March 10, 2015, in the Oval Office of the White House in Washington. (AP Photo/ Evan Vucci)

JOSH LEDERMAN, Associated Press

WASHINGTON (AP) — More than 40 million Americans are in debt thanks to their education, and most of their loans come from Uncle Sam. So President Barack Obama is aiming to clamp down on the private companies that service federal student debt with a presidential memorandum he signed Tuesday.

Obama’s policy tweaks 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.

“It’s an executive action we’re able to take to streamline and improve the manner in which the federal government interacts with students when it comes to student loans,” Obama said as he signed the memo in the Oval Office.

Minutes later, the president departed the White House for Atlanta, where Obama was to showcase the new steps during a visit to Georgia Tech.

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.

Using his executive authority, Obama expanded a federal loan repayment plan to allow more low-income Americans to cap their monthly payments at an affordable percentage of their income. But when Obama this year proposed to eliminate the so-called “529” college savings plan to make way for education tax benefits, opposition was so strong that he had to jettison the idea. And the president’s State of the Union pitch this year for two years of free community college for every eligible American has gained little traction in the Republican-controlled Congress.

Obama will also direct federal agencies like the Education Department and the Consumer Financial Protection Bureau to determine whether more government rules are needed to keep student loan servicers in line. His memo also requires those companies to apply early payments from borrowers to loans with the highest interest rates, which could help students pay off their debt sooner.

Obama was to detail his student loan priorities during his trip to Georgia, where the president will also headline a fundraiser for the Democratic National Committee. Roughly 25 donors paid up to $33,400 to attend the private event at an Atlanta hotel.

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Associated Press writer Nedra Pickler contributed to this report.

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Reach Josh Lederman on Twitter at http://twitter.com/joshledermanAP

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Oakland Post: Week of April 24 – 30, 2024

The printed Weekly Edition of the Oakland Post: Week of April 24 – 30, 2024

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6 days ago

April 26, 2024

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MAYOR BREED ANNOUNCES $53 MILLION FEDERAL GRANT FOR SAN FRANCISCO’S HOMELESS PROGRAMS

San Francisco, CA – Mayor London N. Breed today announced that the U.S. Department of Housing and Urban Development (HUD) has awarded the city a $53.7 million grant to support efforts to renew and expand critical services and housing for people experiencing homelessness in San Francisco.

Published

2 weeks ago

April 20, 2024

Oakland Post

Mayor London Breed

FOR IMMEDIATE RELEASE:

Wednesday, January 31, 2024

Contact: Mayor’s Office of Communications, mayorspressoffice@sfgov.org

***PRESS RELEASE***

MAYOR BREED ANNOUNCES $53 MILLION FEDERAL GRANT FOR SAN FRANCISCO’S HOMELESS PROGRAMS

HUD’s Continuum of Care grant will support the City’s range of critical services and programs, including permanent supportive housing, rapid re-housing, and improved access to housing for survivors of domestic violence

San Francisco, CA – Mayor London N. Breed today announced that the U.S. Department of Housing and Urban Development (HUD) has awarded the city a $53.7 million grant to support efforts to renew and expand critical services and housing for people experiencing homelessness in San Francisco.

HUD’s Continuum of Care (CoC) program is designed to support local programs with the goal of ending homelessness for individuals, families, and Transitional Age Youth.

This funding supports the city’s ongoing efforts that have helped more than 15,000 people exit homelessness since 2018 through City programs including direct housing placements and relocation assistance. During that time San Francisco has also increased housing slots by 50%. San Francisco has the most permanent supportive housing of any county in the Bay Area, and the second most slots per capita than any city in the country.

“In San Francisco, we have worked aggressively to increase housing, shelter, and services for people experiencing homelessness, and we are building on these efforts every day,” said Mayor London Breed. “Every day our encampment outreach workers are going out to bring people indoors and our City workers are connecting people to housing and shelter. This support from the federal government is critical and will allow us to serve people in need and address encampments in our neighborhoods.”

The funding towards supporting the renewal projects in San Francisco include financial support for a mix of permanent supportive housing, rapid re-housing, and transitional housing projects. In addition, the CoC award will support Coordinated Entry projects to centralize the City’s various efforts to address homelessness. This includes $2.1 million in funding for the Coordinated Entry system to improve access to housing for youth and survivors of domestic violence.

“This is a good day for San Francisco,” said Shireen McSpadden, executive director of the Department of Homelessness and Supportive Housing. “HUD’s Continuum of Care funding provides vital resources to a diversity of programs and projects that have helped people to stabilize in our community. This funding is a testament to our work and the work of our nonprofit partners.”

The 2024 Continuum of Care Renewal Awards Include:

$42.2 million for 29 renewal PSH projects that serve chronically homeless, veterans, and youth
$318,000 for one new PSH project, which will provide 98 affordable homes for low-income seniors in the Richmond District
$445,00 for one Transitional Housing (TH) project serving youth
$6.4 million dedicated to four Rapid Rehousing (RRH) projects that serve families, youth, and survivors of domestic violence
$750,00 for two Homeless Management Information System (HMIS) projects
$2.1 million for three Coordinated Entry projects that serve families, youth, chronically homeless, and survivors of domestic violence

In addition, the 2023 CoC Planning Grant, now increased to $1,500,000 from $1,250,000, was also approved. Planning grants are submitted non-competitively and may be used to carry out the duties of operating a CoC, such as system evaluation and planning, monitoring, project and system performance improvement, providing trainings, partner collaborations, and conducting the PIT Count.

“We are very appreciative of HUD’s support in fulfilling our funding request for these critically important projects for San Francisco that help so many people trying to exit homelessness,” said Del Seymour, co-chair of the Local Homeless Coordinating Board. “This funding will make a real difference to people seeking services and support in their journey out of homelessness.”

In comparison to last year’s competition, this represents a $770,000 increase in funding, due to a new PSH project that was funded, an increase in some unit type Fair Market Rents (FMRs) and the larger CoC Planning Grant. In a year where more projects had to compete nationally against other communities, this represents a significant increase.

Nationally, HUD awarded nearly $3.16 billion for over 7,000 local homeless housing and service programs including new projects and renewals across the United States.