Student debt now totals 1.7 trillion dollars, held by 43 million student borrowers. The fear of going into student debt has helped trigger decline of student enrollment, and this is only one consequence of student debt.
Representative Ro Khanna, who represents California’s 17th congressional district and taught economics at Stanford explains: “We have generations saddled with debt, I personally had to take out over $100,000 in student loans for graduate school education. I was able to pay them off in my late 30s but that was because of unique circumstances. I was fortunate. I don’t believe they should be forgiven for people who are in a position to pay them off but for the majority of American’s making less than 125k a year, we need to forgive those loans. We have the capacity to forgive those loans. I think it is fair to people like me who have paid them off because we have been fortunate enough and that doesn’t mean we can’t be empathetic to others who haven’t had the same fortune.”
Kat Welbeck, a civil rights counsel at the Student Borrower Protection Center, who holds a B.A. from Princeton University and a J.D. from the University of Pennsylvania Law School and runs a national non-profit organization based in Washington DC adds: “I work to examine the student debt crisis through a lens of racial equity and economic justice. As we know, there are 45 million borrowers, making student loans the second highest consumer debt in the country, second to mortgages. Student debt exacerbates the other ongoing economic effects related to COVID-19 and we see the ripple effects throughout our community. We encourage students to get degrees to advance in society, but we are seeing the debt really hamper their economic opportunities. It is casting a shadow over our communities. What we see a lot of times with Black and Latino borrowers is there is less household wealth, so they are taking out more loans in bigger amounts to pay for school, which translates to more debt, and then when their children go to college there is potential for that cycle to repeat. We know 90% of Black students and 74% of Latino students take on debt to pay for college in comparison to 66% of white students. Twenty years after starting college 90% of Black students will still owe about 95% of their student loan balance, while the white borrower has paid off over 95% of their balance.”
Joe Jaramillo, a senior attorney at Housing and Economic Rights Advocates (HERA), a non-profit legal service organization in Oakland, California, adds: “For profit school student borrowers are in particular need of assistance, these are the clients we see the most. Many private schools shut down because they went bankrupt. Studies have shown that for profit college have students that are less likely to graduate and more likely to default on their student loans and end up with higher debt. There are over one million students enrolled in for profit schools. We have seen for profit institutions prey on students of color and students who are poorer. The debt has a crippling effect on their life and their ability to buy a house or start a business.”
Andrea Campo, a student struggling with student loans, who went to HERA for help shares her experience: “I attended Heald College in Hayward, majoring in the criminal justice program. I had over $13,000 in debt, it impacted my life significantly. I was denied a position to a job because my debt-to-income ratio was too high. I haven’t been able to be approved for car loans or credit cards. I ended up defaulting because the school was in process of getting shut down. I got a letter stating if I wanted to keep my credits, I would owe the full amount, and I filled out a form I thought meant I was giving up my credits, but it was actually a deferment on my loan. There was no one I could directly speak to about it. I felt like I was really misled by the recruiters there, I am a first-generation college student and navigating the system at 19 was complicated. I thought I shouldn’t have a limit of financial burden for my education since that’s what I needed to be successful.”