One of the biggest issues that many Millennials are dealing with is their student debt…..which in most cases these days is massive. Many are looking to the candidates for an answer to their misery.
I am happy to say that all my years in college was paid for by my G.I. Bill and some scholarships….but nowadays students are not so lucky….most of them are saddled with massive debt thanx to getting an education.
Congress needs to grab their nuts and do something about this problem…..and they can if they would just grow a pair……
Students borrowed approximately $91 billion in federal loans in 2018, bringing the total outstanding loan balance to nearly $1.5 trillion.1 For many, college would not have been possible without such readily available financing, but the burden of debt has become too much. More than 1 million borrowers default every year,2 and millions more are stuck in what feels like an endless cycle of interest payments3 and benefits applications.4 Borrowers of color, in particular, are struggling to repay their debt, exacerbating long-term inequities and causing higher education to be more of a gamble than was promised.5
All of these woes are part of the college affordability crisis, but they are also part of a more arcane problem: The United States’ federal student loan repayment system is broken. This year, however, Congress has a chance to fix it.
The stars seem to have aligned for a long-overdue reauthorization of the Higher Education Act (HEA),6 the country’s primary legislation governing postsecondary education. Senate Education Committee Chairman Lamar Alexander (R-TN), who plans to retire at the end of the current congressional session, will likely be motivated to burnish his legacy by passing the first HEA reauthorization in more than a decade.7
Since HEA was last updated in 2008, the loan system has moved to 100 percent direct lending through the federal government.8 This completely federalized system has resulted in many benefits: less on-the-ground industry influence in lending;9 repayment programs that are unavailable in the private market;10 and, though it may seem ironic given the current dissatisfaction with the repayment system, stronger consumer protections.11 Perhaps most importantly, the transition to direct lending saves the federal government roughly $6 billion per year—funds that have resulted in an infusion of $36 billion of mandatory funding into the Pell Grant program over the past 10 years.12
Nevertheless, now that direct lending has been the primary federal loan system for nearly a decade, it is time for a major revamp to address modern problems.
The idea of a free college education is a great idea but will not fly……however the system of debts needs reforming if not changing…