The student debt burden and its impact on racial justice, borrowers, and the economy
On Looney presented this testimony to the U.S. Senate Committee on Banking, Housing, and Urban Affairs’ Subcommittee on Economic Policy.
Executive Director, Marriner S. Eccles Institute, University of Utah
Federal student loans impose a crushing burden on many borrowers, particularly those who enroll in programs where most students don’t finish, programs where most graduates are unable to find a job, or programs where debts incurred are unpayable even with a good-paying job. Because of failures in federal lending programs, millions of Americans are drowning in student debt. The borrowers who struggle are disproportionately from lower-income families, first generation students, and students of color. And many more Americans miss out on the economic opportunities a college education provides out of fear of its cost.
But that is only part of the story. Most borrowers, like college and graduate students in general, earn more, are better educated, live longer, are more likely to own a home, and come from more affluent backgrounds than other Americans. 1 Most student loans finance high-quality investments that boost borrowers’ earnings and economic health. As a result, most debt is owed by well-educated graduates, in higher-income households who have the means to repay their loans. (mais…)