United States Senator Elizabeth Warren, along with other U.S. lawmakers, is tackling the issue of student debt head-on. The reason: it’s having a negative impact on the economy as a whole.
According to the Daily Cardinal, the senator commented that “Student debt is crushing the dreams of young people and it is crushing their ability to build a future that has some real economic security.”
Yet the issue has been a very difficult one to solve. Congress proposed new legislation this week that would help students pay for college, which would lower their debt after graduating.
Wisconsin Senator Tammy Baldwin proposed the Reducing Educational Debt Act, which will allow student loan borrowers to refinance their debt at lower interest rates.
The second component of the “in the Red” act is a way to provide money to low-income students by avoiding inflation and indexing the Pell Grant.
Making the first two years of community college free is the third component. It’s estimated that if every state did this, more than nine million students would benefit from this bill.
College tuition has escalated and because of this, $1.5 trillion is owned in student loan debt, which is up from $500 billion only a few years ago, according to the Gazette Times.
About 20% of all Americans in the 18 to 24 age group have debt hardships, and that doesn’t just go away. The lifetime default rate on student loans is between 25 and 50%.
In the past, entering the job force meant having a well-compensating job and job security and being able to almost immediately save up to buy a house.
That’s not the case anymore, according to an article from The Guardian. Students aren’t able to look for jobs they would like and are now forced to look only for jobs that will enable them to pay off their student loans.
Because of these debt difficulties young people face, it’s nearly impossible to plan for things like buying a house or retirement.
So many students are struggling with these issues and, for right now, it is still a long way from being fixed.