American law makers are weighing in on what to do about the accruing student debt to be passed onto the next generation
By ONME Newswire
First-time college enrollment has fallen during the pandemic, highlighting the impact of the economic downturn as well as the crushing weight of $1.7 trillion in loan debt held by more than 43 million student borrowers. Advocates argue that cancelling $50,000 per student would leave 75 percent of borrowers free of debt, helping the economy.
President Biden recently made waves by saying he would not support this approach. Hear from students, policy makers and experts on the subject with producer host Julia Dudley Najieb.
The speakers featured in the above podcast discuss the gaps in econmic equity regarding student debt and opportunities for Black and Brown students during the COVID-19 pandemic:
Rep. Ro Khanna, U.S. Congressman, represents California’s 17th
Congressional District. Rep. Khanna sits on the House Committees on Agriculture, Armed Services, and Oversight and Reform.
Prior to serving in Congress, Rep. Khanna taught economics at Stanford University, law at Santa Clara University, and American Jurisprudence at SFSU.
Rep. Khanna served in President Barack Obama’s administration as Deputy Assistant Secretary at the U.S. Department of Commerce.
Rep. Khanna graduated Phi Beta Kappa with a B.A. in Economics from the University of Chicago and received a law degree from Yale University.
Rep. Khanna first talked about the recent COVID Relief bill they passed and the parts he was not happy with concerning the minimum wage.
He said that we can lift the burden on the next generation if we can help people get rid of this debt.
Congressman Khanna said, "Especially for Americans making less than $125,000 a year, we need to forgive those loans. You basically have a generation saddled with debt."
Kat Welbeck is a civil rights counsel at the Student Borrower Protection Center. She was previously an outreach and engagement specialist in the CFPB’s Office of Public Engagement and Community Liaison.
Prior to her work at the bureau, Kat taught fourth grade in Houston, TX as a Teach for America Corps member. Kat currently serves as a DC program director of Rising Leaders, Inc. Kat is also the director of engagement on the Rising Leaders, Inc. Board of Directors.
She holds a B.A. from Princeton University and a J.D. from the University of Pennsylvania Law School.
Wellbeck said they examine student debt crisis through the lens of racial equity, and how student loan debt has exacerbated the on-going economic fallout that happens through time and among minorities.
"We have 45 million borrowers who owe a collective $1.7 trillion in student loan debt in this country," said Wellbeck.
"That makes student loans the second largest class of consumer debt in this country, so it's only second to mortgages. With this much outstanding debt, the ripple affect of this crisis are really stretching across our communities and across our economy."
The racial wealth gap is another factor associated with student loan debt amongst minority graduates--the systemic barriers and racial divide must be talked about, according to Wellbeck. The cycle of debt then repeats, generation after generation:
"What we see a lot of the times, especially with Black and Latino borrowers with this racial wealth gap, they have less household wealth, and then are taking on more loans to pay for school and in turn leave school with more debt then cuts into opportunities for wealth creation over time."
Because of the heavy consequences of default, these student loan-debt carriers are not able to get homes or start a business because of the negative affects of one's credit; the situation is considered an inequitable economic crisis.
Joseph (Joe) Jaramillo is a senior attorney at Housing and Economic Rights Advocates (HERA) in Oakland, CA. He previously litigated employment and consumer class actions at Goldstein, Borgen, Dardarian & Ho in Oakland, and GrahamHollis APC in San Diego. He also served as a staff attorney at the Mexican American Legal Defense and Educational Fund (MALDEF) in San Francisco.
Born and raised in Vallejo, he earned his J.D. degree at UC Berkeley School of Law (Boalt Hall) and his B.A. degree at UC Davis.
Jaramillo said HERA has kept a strong focus on clients misled by for-profit schools and entities that are predators who specifically target minority students, who less likely to graduate and are morel likely to default on their student loans, ending up with higher debt burden within five years of leaving the school.
According to Jaramillo, over 100 million students are enrolled in for-profit schools. They are usually lured in by these for-profit colleges who market to students false and misleading promises of getting high-paying jobs through a quick path once they graduate; they forget to tell them about the huge federal and private student-loan debt that follows.
"For-profit schools are aimed at making a profit, said Jaramillo. "And this business model often leads the schools to push students into expensive federal and private student loans to pay for an education that does not lead to employment in the field of study."
Jaramillo said this business model has a purposeful mission to only market to minority students so that they can get the federal funding--he said it certainly increases the racial wealth gap.
Andrea Campo and Gabe Stewart, two students struggling to stay financially afloat with student loans. They shared their stories of taking the for-profit option for colleges, not realizing there were other cost effective options, such as community colleges, to reach their aspiring life goals.