WASHINGTON, D.C. (Press Release) – When President Obama announced his Student Bill of Rights this week it contained language from a bill by Congresswoman Susan Davis (D-California). The San Diego Democrat’s bill helps borrowers pay down their student loans faster by directing extra payments go toward the principal and not toward the interest.
“I was pleased to see the President include my bill and provide some relief to borrowers as part of his effort to help those who have taken out student loans,” said Davis, a senior member of the House Committee on Education and the Workforce. “Many people just assume that if they pay a little extra on a student loan, the surplus goes toward paying down the principal amount. We’ve seen that is not the case and those extra payments go to pay off interest. Default payments needed to be altered to the benefit of the borrower, who should get ahead when they pay ahead.”
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Keeping up with Jewish public officials: Susan Davis
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According to the Consumer Financial Protection Bureau, one of the chief complaints made by borrowers is that their student loan payments are processed against their intent. Instead of applying prepayments towards the loan principal, as the borrower likely expects, loan-servicers will often credit the balance towards future monthly payments.
Davis will work to codify the President’s action into law when she re-introduces the Student Loan Fair Prepayment Act in the 114th Congress.
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Preceding provided by U.S. Rep. Susan Davis.
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