[Disclaimer: this from the Committee on Education and the Workforce, Democrats]
A new report from the New York Federal Reserve has found that total student debt nearly tripled between 2004 and 2012 due to more student borrowers and students borrowing more. The report found that these borrowers are finding it more difficult to secure other types of credit once they finish school, such as home mortgages, as they struggle to pay back their loans. As a result, many young graduates’ dream of owning a home is put on hold indefinitely. CNBC has more:
The staggering amount of outstanding student debt — nearly $1 trillion owed – is beginning to impede the U.S. economy as a whole, a new report from the New York Federal Reserve suggests, chiefly by robbing the housing market of its richest crop of new buyers: young college graduates.
The statistics in the report are dismaying in themselves. With the number of borrowers approaching 40 million nationally, including more than 40 percent of 25-year-olds, the average balance on their loans has risen to $25,000. About 6.7 million of all student borrowers, or 17 percent, are delinquent on their payments three months or more.
Previous Democratic Congresses have taken a number of significant steps to make college more affordable for families and reduce the amount of debt students and their families face. For instance, As part of the College Cost Reduction and Access Act – co-authored by Rep. George Miller (D-Calif.) – helped make higher education more financially manageable by lowering interest rates on need-based student loans to 3.4 percent. Unfortunately, that reduced rate will double to 6.8 percent this summer if Congress doesn’t act.
Democrats agree that there is more to be done to make higher education more affordable. One way is not threaten affordability measures with shortsighted budget cuts or allow the reduced rate to double. Congress should be working together now to address he imminent interest rate hike.
Find out how lower interest rates on need-based student loans and other Democratic reforms can help make college more affordable and help alleviate devastating student loan burdens for millions of students, recent graduates and other borrowers.
(Also see NY Times):