In 2017, the average U.S. student loan debt for a new graduate was $39,400, up six percent from the previous year (an increase almost triple the rate of inflation).
Forty-four million Americans owe a combined student loan debt of $1.48 trillion dollars, over $600 billion more than our nation’s combined credit card debt.
Student loan debt is a drag on the entire economy and on society in general. Too many people can’t afford to marry, have children, buy a new car or a house, pay for health insurance, save for retirement, or take a chance starting a business because of their student loan debts. Unlike other forms of debt, student loans generally can’t be discharged in bankruptcy or re-financed when interest rates drop.
Student loan debt is a testament to America’s failure to invest in higher education. It is a shameful state of affairs when an American citizen can travel to Germany, Finland, or Norway and attend a public university for free or at a rate of tuition that is drastically lower than a comparable U.S. institution.
Companies that process student loans have been sued for abusive collection practices that allegedly cheated millions of people. Mismanagement of student loans has also caused other financial nightmares. And the federal Department of Education has recently taken steps to protect — get this — not the students, but the debt collectors.
Back in 2009, the Consumer Finance Protection Bureau (“CFPB”) was created in response to the lending abuses that contributed to the Great Recession. TN-01 Rep. Roe vigorously opposed the CFPB legislation. He argued that consumer protections would “restrict product choices” for borrowers. Well, he was right, but only in the sense that the CFPB did restrict the ability of powerful institutions to trick people and offer abusive, exploitive, and fraudulent choices. Rep. Roe predicted that the CFPB would result in higher interest rates — but he was wrong. That didn’t happen, as the years following enactment of the CFPB legislation saw some of the lowest interest rates in history.
Rick Mulvaney, the Trump-appointed CFPB director who does not support the agency he heads, has just announced elimination of CFPB’s Office of Students and Young Consumers. This is the branch that had been responsible for policing the student loan industry and for monitoring financial institutions and credit card companies that target young people and college students.
So — if you are a young person or have a student loan, or expect to have one — you will have to watch out for yourself financially, because Rep. Roe’s wish is beginning to come true.
If you would like to help Rep. Roe not be a liar and keep his own original term limit promise and retire, you can make your views count by sharing and following this ongoing blog and by supporting Dr. Marty Olsen, a refreshing Democratic alternative, here: Responsible Change.
Oh yeah, and don’t forget to vote!