U.S. Secretary of Education Miguel Cardona speaks at the National Action Network national convention in New York on April 12, 2023.
Jeenah Moon | Reuters
The Biden administration announced a finalized plan Tuesday to improve its oversight of higher education institutions and strengthen consumer protections for student loan borrowers.
“We are raising the bar on accountability and ensuring that when students invest in higher education, they get a strong return on that investment and a greater chance of realizing the American dream,” said the US Secretary of State. Education, Miguel Cardona.
Some of the new rules aim to protect borrowers whose schools close abruptly, while other policies will better inform students of their rights and reduce their chances of not being able to repay their student debt upon graduation.
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Under the regulations, which take effect July 1, 2024, colleges that receive Title IV financial aid will be required to provide “adequate” financial aid counseling to students, including information about the cost of education and the different types of assistance available. They will also need to provide sufficient career services.
Families will also begin to see standardized financial aid offerings that should clarify college expenses, as well as the differences between aid that must be repaid and aid that does not have to be repaid.
“This will reduce student debt by increasing awareness of the true costs of attending college,” said higher education expert Mark Kantrowitz.
Outstanding educational debt in the United States exceeds $1.7 trillion, representing a greater burden on Americans than credit card or automobile debt. The average loan balance at graduation has tripled since the 1990s, from $10,000 to $30,000.
The Biden administration also plans to block colleges from withholding transcripts from students who are late paying their bills.
“Ending colleges’ ability to deny transcripts will allow more students to transfer colleges and apply for jobs,” Kantrowitz said.
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