Student Debt Crisis

Floor Speech

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Ms. OMAR. Mr. Speaker, I rise today to speak about the student debt crisis that is holding back our students, our families, and our economy.

Last year, American's collective student loan debt surpassed $1.5 trillion. The shackles of debt keep former students and their families from seeing the economic prosperity promised to them by their education.

More than 40 million Americans now have student debt, and the amount of debt that the average student carries is rising. Student loan balances have more than doubled real terms since 2005. Average real student loan debt per capita for individuals between the ages of 24 to 32 has risen from $5,000 in 2005 to $10,000 in 2014.

It is driving down home ownership rates, especially for young people. One study found that a $1,000 increase in student loan debt causes a 1- to-2 percent drop in home ownership rates for borrowers in their late twenties and early thirties, threatening to undermine the long-term financial stability of an entire generation.

Young adults who graduate college with a student debt now have negative net worth with a median net worth of $1,900, down from $9,000 in 2013.

Student loan debt does not only impact young people. The number of people over 60 with student loan debt has quadrupled in the last four decades. Parents are increasingly jeopardizing their retirement to pay off loans they took out to pay for their kids' education.

The source of student debt does not affect all Americans equally. Students of color face a higher risk of defaulting on their student loans and struggle to find jobs to pay off these loans due to discrimination in hiring practices.

First generation and immigrant college students face much higher default rates, and women own two-thirds of the $1.4 trillion total of student debt.

The burden of this debt will be intensified postgraduation by the gender gap. It is time we started treating student debt like the national crisis it is. We need urgent action to address it. That is why I support debt free and tuition-free college and will be introducing a bill to cancel all student debt.

Our Debt-Free College Act would make debt-free college a reality for students within 5 years. We can ensure that students graduate debt free and are not at a competitive disadvantage as a result of the burden of student loan debt.

Making public 2-year and 4-year colleges free and accessible to all is essential in investing in an equitable future. It would also provide an enormous middle class stimulus that would boost economic growth, increase home purchases, and fuel a new wave of small business formation.

Student debt is not the result of bad choices or behaviors. It is the result of a system that tells the students to get an education, go to college in order to have a stable life, but then does not provide the resources so that they can afford that education.

But I believe together we can reform that system.

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