Forty-five million Americans carry $1.71 trillion in student loan debt. Put another way, one in every eight Americans is in debt for a degree. According to CNBC, that’s about $780 billion more owed than credit card debt, making student loan debt one of the most severe financial burdens facing our country today.
Generations of Americans have trusted that a college degree is a secure path to upward mobility. Faced with a growing earning gap between college-educated workers and those without, many turned to loans to finance their education. But with skyrocketing tuition and stagnant wage growth, the investment has not necessarily paid off.
According to the Department of Education, about a third of all student loan debt will never be paid off. Compounding interest has only worsened the problem: federal interest rates as high as 8.5% have meant that some now owe more than they did when they graduated. Many borrowers must make the hard choice to delay or put off major life milestones altogether—like having children, owning a home, and saving for retirement—in order to afford their student loans.
Maine Public’s research shows that two-thirds of Maine's college graduates leave school with loan debt, averaging $34,000 per person. A 2018 study from the Maine Center for Economic Policy found that more than 60% of Maine borrowers have struggled to make their payments, and many have been able unable to afford basic necessities as a result.
Student debt is not just an issue of economic equality, it is also an issue of racial and gender equality. Black students on average borrow more to attend college and have a harder time paying their debt off than their white peers. Women hold nearly two-thirds of the nation’s student debt, in part because the gender wage gap means they need higher credentials to make the same salary as men in their field.
The economic distress of the pandemic necessitated action. Beginning with the CARES Act, borrowers were given a reprieve from their payments. With my support, Congress paused collection of federal loans and interest, meaning that borrowers could weather the pandemic without the additional stress of having to pay their student loans. That extra money circulated back into the economy, helping borrowers put food on the table and support their families during a tough time.
As of right now, we face an end to the pause on student loan payments in September. While I support a further extension of the freeze, I believe we must take major steps to address the student debt crisis. Unlike most other types of debt, Americans with publicly held student loans can’t refinance unless Congress changes the law. I’ve signed on to a bill that would allow most current federal borrowers to refinance the interest on their student loans to zero percent, and I hope to see it considered by Congress soon.
There’s even more work to be done. If you borrowed money for your education and have been trying to repay it for years without making any significant progress, you need assistance. That's why I support across the board student debt relief. I believe that the President has the authority to cancel some student debt for each borrower by executive order, and I support his recent request for the Department of Education to determine what his authorities are and how best to use them. As a way to boost the economy, close the racial and gender wealth gap, and put Americans on solid financial footing, tackling student loan debt must be our priority.