Solving the student loan crisis

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45 million Americans have student loan debt of $ 1.71 trillion. In other words, one in eight Americans must complete an advanced degree. This is roughly $ 780 billion more than credit card debt, according to CNBC, making student loan debt one of the heaviest financial burdens our country faces today.

Generations of Americans have believed that higher education is the safe path to progress upward. Faced with a growing income gap between workers with and without college degrees, many have applied for loans to finance their education. But due to skyrocketing tuition fees and sluggish wage increases, the investment has not necessarily paid off.

According to the Ministry of Education, about a third of all student loan debt will never be paid. Compound interest only exacerbated the problem: Federal interest rates of up to 8.5% meant that some now owed more than when they graduated. Many borrowers have to make difficult choices – to postpone or postpone important life milestones – such as having children, owning a home, and saving for retirement – in order to afford their student loans.

A Maine Public study shows that two-thirds of Maine college graduates drop out because of a loan, averaging $ 34,000 per person. A 2018 study by the Maine Center for Economic Policy found that more than 60% of Maine borrowers have difficulty repaying, and as a result, many cannot afford basic necessities.

Student debt is not only a problem of economic equality, it is also a problem of racial and gender equality. Black students, on average, borrow more to attend college and have a harder time paying off their debts than their white peers. Women account for nearly two-thirds of the country’s student debt, in part because the gender pay gap means they need a higher education to earn the same pay as men in their field.

The economic crisis caused by the pandemic called for action. Beginning with the CARES Act, borrowers have been granted a grace period. With my support, Congress has suspended collection of federal loans and interest, which means borrowers can weather the pandemic without the added stress of paying off their student loans. This extra money has returned to the economy, helping borrowers accumulate food and support their families during difficult times.

At the moment, we are ending the suspension of student loan payments in September. While I support a further extension of the freeze, I believe we must take serious steps to address the student debt crisis. Unlike most other types of debt, Americans with government student loans cannot refinance unless Congress changes the law. I have signed into law a law that will allow most of the current federal borrowers to refinance interest on their student loans to zero, and I hope it will be reviewed by Congress soon.

More needs to be done. If you’ve borrowed money for your education and tried to get it back for years without making significant progress, you need help. This is why I fully support the cancellation of student debt. I believe that the President has the power to cancel certain student debts for each borrower by his own order, and I support his recent request to the Ministry of Education to determine what his powers are and how best to use them. Solving the problem of student loan debt should be our priority as a way to boost the economy, narrow the gap in racial and gender wealth, and put Americans on a solid financial footing.

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