President Obama Issues Memorandum to Expand Student Loan Repayment Options

June 19, 2014

On Monday, June 9, 2014, President Obama signed a new Presidential Memorandum directing the Secretary of Education to propose regulations that would allow an additional nearly 5 million federal direct student loan borrowers the opportunity to cap their student loan payments at 10% of their income. The memorandum also outlines a series of new executive actions aimed to support federal student loan borrowers, especially vulnerable borrowers who may be at greater risk of defaulting on their loans.


Among the actions to be taken by the federal government, as directed in the Presidential Memorandum, are:

  1. Borrowers of Federal Direct Loans will have their Federal student loan payments capped at 10% of their income beginning December 31, 2015.
  2. New rules will help borrowers repay their loans on time and lower payments for servicers when loans enter delinquency or default.
  3. Reduced interest rates will be available for eligible veterans.
  4. The Secretaries of the Treasury and Education will disseminate information about federal student loan repayment options to millions of borrowers during the tax filing process.
  5. The Department of Education will target 2.5 million borrowers with the greatest risk of encountering payment difficulty to get them back on track with their loan payments.
  6. The Administration will work with various groups and organizations to provide comprehensive information about repayment options and federal student aid resources that are available to them.
  7. The Department of Treasury will release a fact sheet clarifying how Pell Grant recipients may claim the American Opportunity Tax Credit (AOTC).

Not all members of Congress welcomed the announcement. In various statements, Speaker of the House John Boehner (R-OH); Representative John Kline (R-MN), Chairman of the House Education and the Workforce Committee; and Senator Lamar Alexander (R-TN), Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee dismissed or challenged the validity of the proposed changes.

More information is available in the Presidential Memorandum and the fact sheet that the White House released on the proposals.

ASHA Resource

For more information, please contact Neil Snyder, ASHA's director of federal advocacy, at or 800-498-2071, ext. 5614.

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