U.S. House of Representatives Hears Expert Testimony on Student Loan Crisis

Yesterday June 11, 2019 the House of Representatives Subcommittee on Oversight and Investigations heard testimonies on the country’s efforts to oversee the student loan crisis as “Americans owe over $1.5 trillion in student loan debt” (1). Of this $1.5 trillion many are on track to make back their payments, but twenty percent “of those who still owe money are behind on their payments”, according to a 2018 Federal Reserve report (2). Joanna Darcus, a Massachusetts Legal Assistance Corporation Racial Justice Fellow and one of the hearing’s witnesses, testified that black and latinos “report higher rates of late payments [and] experience higher rates of default” on their student loans, and that “women carry about two thirds of student loan debt” (3). Another witness, Arwen Thoman, the Director of Student Loan Assistance Unit for the Massachusetts Attorney General’s Office, said she “routinely hear[s] that borrowers are worried about their abilities… to buy a home” (3). A 2019 report by the Federal Reserve reported that “student loan debts are preventing [individuals aged 24-32] from buying a home” and “that roughly 20 percent of the decline in homeownership among young adults can be attributed to their increased student loan debts” (4). The House Subcommittee calls for states to follow actions of others, like Illinois, who “passed a student loan bill… [allowing] borrowers struggling to make payments [to be easily provided] with information about all of their repayment options” (1).

1. https://financialservices.house.gov/uploadedfiles/hhrg-116-ba09-20190611-sd002_-_memo.pdf
2. https://www.federalreserve.gov/publications/files/2018-report-economic-well-being-us-households-201905.pdf
3. https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=403828
4. https://www.federalreserve.gov/publications/files/consumer-community-context-201901.pdf