On March 16, President Trump killed federal guidance that prevented student loan collectors from charging higher fees for those who defaulted on their student loans. The guidance was initially imposed by the Obama administration to relieve the burden on young Americans who demonstrated fiscal irresponsibility with their loan payments through the Family Family Education Loan (FFEL) program.
President Obama’s memo told various collector agencies not to charge fees that reached as high as 16 percent of the interest accrued on loans assuming that a borrower defaulted within 60 days of entering a loan rehabilitation program.
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