October 27, 2015

With One Million More Student Borrowers Entering Repayment Next Month, Senate Democrats Hold Forum on College Affordability and the Student Debt Crisis

Senators hear from graduates, experts about how rising debt loads are crushing young Americans and dragging down the economy

Call on Congress to allow students to refinance existing debt, bring down college costs

Video is available here

WASHINGTON, DC - As almost one million student borrowers prepare to receive their first student loan bills in November, United States Senator Amy Klobuchar (D-MN), chair of the Democratic Steering and Outreach Committee and Senator Elizabeth Warren (D-MA) held a forum with college graduates and experts to discuss college affordability and the student debt crisis. They were joined at the forum by Senators Dick Durbin (D-IL), Jeanne Shaheen (D-NH), Tammy Baldwin (D-WI), Chris Murphy (D-CT) and Mazie Hirono (D-HI).

Student debt in the United States now totals $1.3 trillion and has increased by $86 billion in the past year alone. Agencies including the Federal Reserve, Consumer Financial Protection Bureau, and the Treasury Department have issued warnings about the impact of this growing crisis on our economy, and experts indicate that high debt loads are keeping some young people from starting families, buying homes, and starting small businesses.

According to data from the U.S. Department of Education, almost one million more students will enter repayment next month alone. Had Congress acted to allow borrowers to refinance their loans at lower interest rates, as Senate Democrats have called for, borrowers who started repaying their loans between summer of 2014 and this summer of 2015 could have saved $655 million dollars in student loan interest in just one year.

"Student debt hangs like an anchor around not just our students, but our entire economy,"Senator Klobuchar said. "At a time when more and more jobs require some form of higher education, we simply cannot allow soaring costs to be a barrier to opportunity. We must take action to help ease the crushing burden of debt and ensure higher education remains affordable for students across the country."

"This country is digging itself into an economic hole: our economy cannot flourish if we don't have enough college-educated workers. But to get a college education, students now must take on debt that keeps them from making the purchases that keep our economy strong," Senator Warren said."But this is about more than economics. This is a moral issue. When we yoke young people to twenty years or more of debt repayments, and when we make a profit off those debts, then we have failed as a country in one of our most important obligations: We have failed to invest in the future of our young people and we should feel the shame of that."

"Young people with student debt in American face two serious challenges: first, too many are finding that their debt is obstructing the American Dream, and the second, they feel that their government is simply watching from the sidelines," said Rohit Chopra, Senior Fellow at the Center for American Progress. "A lot of politicians in Washington claim to want to help students and their families. But to me, it's just a bunch of hot air unless they support these three things: First, we need to keep student loan interest rates and college tuition in check. Second, we need to fix our student loan servicing industry. And third, we need to support and defend the CFPB."

"Now more than ever, we must have a comprehensive plan for how we as a country finance college costs to ensure that higher education is within reach for today's students, and how we help approximately 40 million current student loan borrowers manage over $1.2 trillion in debt," said Jennifer Mishory, Executive Director of Young Invincibles. "Fixing our higher education system will require action from all stakeholders - smart investments by state and federal governments; better performance by institutions; and reforms to our draconian laws facing struggling debtors."

"Although I worked all four years of college and did work study, I have almost $50,000 worth of debt. The countdown to paying this debt is affecting my life by adding both financial strains and stress. It's difficult enough to find a job as a recent graduate--particularly in the public sector--that pays enough to make rent and cover other living and transportation expenses," said Annie Wood, a recent graduate of the University of Minnesota. "I've felt that my options and mobility are limited, and wonder at what point I'll be able to actually save for things like a house, a car, or a family."

"I became a teacher because I want to inspire and empower the next generation, to educate the future. I want for my students the same thing I want for my son: a future in which they have a chance to achieve their dreams, to go to college and not be swimming in debt afterwards. I find it painful to tell them truth: No matter how hard you work, you are unlikely to get an affordable college education with things the way they are now." said Jess Sanchez, a teacher and member of the National Education Association and California Teachers Association. "I worry that we will lose future educators if the issue of student debt is not addressed-they will choose other professions because they fear being deeply in debt for decades. We owe it to our children, and to their children, to make the dream of a college education an affordable reality for everyone."

"The average American farmer is 58 years old. For every one farmer under the age of 35, we have six farmers over the age of 65 in this country. We desperately need young apprentices like my coworkers and I to become lifelong farmers and start farms of our own., said Emily Best, an Apprentice Farmer at New Morning Farm in Pennsylvania. "For me, student loans are one of the biggest barriers standing between me and starting my own farm. Like most small-scale farmers and farmworkers, I do not get paid very much, and my student loan debt prevents me from accessing the lines of credit I would need to start my own farm."

Video of the forum is available here.