Going to college and attending a two- or four-year institution has become a societal norm. Today’s workforce and job market value those who have obtained a degree. Research shows higher education opens more doors for an individual to succeed in the job market. Unfortunately, for many college graduates, there aren’t as many open doors when it comes to paying off their student loan debt.
This issue undermines the future economic viability of our nation. My constituents have shared with me their student loan horror stories. My constituents are productive, hard-working adults who, because of student debt, are more likely to delay important life decisions such as owning a home, having children or seeking medical and dental care. And that is why I have introduced two important new bills, one that would help lower student loan interest rates, and the other that would allow student loan debt to be eligible for bankruptcy.
My Democrat colleagues and I are looking to help student loan borrowers. The president is fond of bragging about how great the economy is, but there are borrowers in St. Louis and around the country who continue to struggle to make ends meet. In fact, at the end of 2018, the amount of student loan debt was around $1.5 trillion, the most this nation has ever seen. We need targeted solutions that can mitigate and reduce this fiscal bleeding, while looking out for future generations of students.
A recent report published by the Institute for College Access and Success affirmed that student loan debt disproportionately impacts minorities and low-income households. It is difficult for individuals to compete in a job market when the consequence of seeking higher education results in a lifetime of repaying student debt instead of building wealth.
During my tenure on the House Financial Services Committee, I have worked with my colleagues to help beleaguered students make life better and make the loan repayment process simpler. However, I have become increasingly alarmed by the actions of the Trump administration. I am inquiring into why Consumer Financial Protection Bureau Director Kathy Kraninger decided to gut the ability-to-pay standard that helps protect consumers from harmful loans. Further, I am investigating why Education Secretary Betsy DeVos blocked inquiries into the high rejection rate of applications for the student loan forgiveness program. The Public Service Loan Forgiveness Act was specifically designed to aid public servants such as firefighters, teachers and police officers.
As my colleagues and I continue to propose and debate ways to reduce the costs of higher education, it is clear to me that the borrowing and repayment process needs to be more manageable and easier for students. Until we reach a consensus, I believe that lowering interest rates and having the ability to include some student loans in bankruptcy should be an option for those in a dire financial situation.
The Student Loan Relief Act, one of the two bills I’ve introduced, ensures student loan interest rates can be made more manageable and reasonable for those able to make payments. The second bill, the Relief from Excessive Debt Act, addresses the direst financial situations and allows loans to be dischargeable in bankruptcy proceedings. The consequences of bankruptcy remain but allow for a fresh start. These bills accomplish three necessary goals: 1) providing relief for debtors who can pay but need reasonable interest rates; 2) encouraging smart lending and institutions of higher education to be more transparent and to make necessary reforms to ease the burden of loans, refinancing loans and the costs of college for students; and 3) allowing borrowers more control over their financial future.
My legislation would not entirely eliminate student loan debt, but it would provide a path for borrowers that is available to others with individual debt. There are many issues that divide this Congress, but every district has constituents who are struggling to make ends meet and are overwhelmed with student loan debt. Both the Student Loan Relief and the Relief from Excessive Debt Act provide solutions and create a giant step toward easing the burden and ensuring many low- and moderate-income borrowers are not trapped in a cycle of debt and despair.
William Lacy Clay, D-University City, is a member of Congress.