A Bipartisan Idea to Address America’s Mountain of Student Loan Debt
**Special Edition By Sens. John Thune (R-S.D.) and Mark Warner (D-Va.)**
Every summer, college graduates around the country don their caps and gowns in celebration of a job well done, with the hopes of using their degrees to propel them into a successful career.
But for many young Americans entering the workplace, that first job will also bring with it the first payment on tens of thousands of dollars of student loan debt — debt that can take them decades to pay off.
While college is certainly not the only path to a good job, the fact is more than half of all jobs paying over $35,000 require a bachelor’s degree or higher — and that number is only expected to grow.
Americans are following the money. Today more than 44 million Americans have outstanding student loan debt, which has become the one of the biggest consumer debt categories. All told, student debt in the U.S. now totals more than $1.5 trillion.
For South Dakotans, more than 109,000 borrowers hold $3.3 billion in total outstanding federal student loan debt, according to recent data from the Department of Education. That averages out to more than $30,000 per borrower. In Virginia, more than 1 million borrowers hold $38 billion in total outstanding debt. Across America, it’s estimated that the average borrower has more than $37,000 in debt, while more than 2 million student loan borrowers owe $100,000 or more — and these figures continue to rise.
As a result of this growing student debt crisis, many borrowers struggle to pay for day-to-day necessities like rent, groceries or car payments. For others, their student debt stands in the way of buying a home, starting a business or pursuing a new career opportunity.
While the federal government already provides some assistance to those who are eligible, much more can be done to help graduates responsibly pay down their student debt and help employers recruit and retain qualified candidates for good-paying jobs.
That is why we introduced the bipartisan Employer Participation in Repayment Act. Employers can already contribute up to $5,250 each year tax free to help cover the education expenses of students who are working while taking classes. Our legislation would expand this benefit to allow employers to provide the same tax-free contributions to their employees who are no longer in school and help them pay down their student loan debt.
Right now, borrowers pay taxes on any contributions their employer makes toward their student loans. Our bill would help employees pay down their student debt more quickly and put more of their hard-earned money toward buying a home, starting a business, or saving for the future.
This is an obvious benefit for graduates, but it would also give employers a new tool and benefit option that would help them attract and retain top-level talent. This is a win-win scenario for graduates, for businesses, and for the American economy.
We know this bipartisan legislation isn’t a silver bullet. More must be done to bring down the cost of higher education and expand opportunities for those Americans who choose not to go to college. But for the millions of Americans currently saddled with student debt, our bill would begin to ease that burden almost immediately.
Our bill can pass Congress and get the president’s signature this year. With more than one-third of both the House and the Senate signed on as cosponsors and a wide variety of endorsing stakeholder groups, our bill has earned the type of consensus support that’s not easily found in Washington these days. Several major companies have already committed to introducing student loan repayment benefits if Congress steps up and makes this fix. Let’s give employees the chance to take them up on the offer.
By working together in support of this bill, Democrats and Republicans can help give student borrowers some relief and put them on the pathway to success.
**Note to editors: A version of this op-ed first appeared on TIME.com.
###
One thing that needs to be done is to make colleges and universities co-responsible for the government loans they push on students, particularly for degrees that will not support the loans based on future earnings. With guaranteed government loans colleges and universities grew the administration in both size and in compensation.
I’d also like to see the federal government out of the student loan business. Their involvement distorts the real market for student loans.
I would suggest getting rid of student aid in its entirety. When an young lad or lass goes into a college and is scared by the tuition, room, board and books, they are told about all of the aid they will get. Grants are a help, but then they are told they can borrow the rest and not have to pay anything until they graduate. Most of the interest begins to accrue immediately. I believe it is student loans and other aid that has led to the skyrocketing tuition costs.
Why is no one other than South Dakota News Watch talking about the fact that we didn’t have a student loan crisis until Obama federalized all students and use the interest on the student loans to pay for Obamacare.
Colleges and universities and students are not to blame. The blame rests solely with Democrats in Congress who voted to allow the for the complete takeover the student loan program. Congress will never privatize student loans again because they are addicted to the additional revenue coming from the interest. They are holding students and those paying student loans hostage by making it impossible for loans to be repaid without growing the principle on the loan. It’s a scheme to get people to pay additional money to the federal government on a monthly basis.
If you’re a student and don’t want to be mounted with unplayable student debt and subsequently stick it to those who created the student loan crisis, then visit your bank or credit union and ask about options. Added bonus of building your credit history.
Thune should be working to move federal student loans back to the private sector. His organization (Congress) single-handedly created the student loan crisis and no one wants to address a way to really fix it.
100% TRUE! And those students who had taken responsibility for paying back their loans are very upset that some dems now want to forgive others. Are they going to get a refund for what they repaid??!!
WELL SAID
John Thune is a dem?
He isn’t conservative.
Thune is establishment.
That’s news to no one. What’s funny is the group that yells RINO DEM LIB when a repub offers any suggestion that they don’t like.
Agree on that. Suggesting solutions would be a better response..
but no there will be the usual asinine copycat ultra-con rubber-stamp charges of rino-ism, and impossible blame game scenarios.
Senator John Thune should focus on diversifying South Dakota’s economy so these college kids can actually find a gainful career to pay back these loans rather than relying only on agriculture. Since South Dakota rates at the bottom of student debt in the nation maybe Thune needs to wake up and allow access to him from others who are not farmers. But he is a pay to play senator and the issue will persist.
SD loves their career politicians.