Why student debt matters: Q&A with Elizabeth Warren
Marian Wang | 5/28/2014, 12:48 p.m.
Elizabeth Warren knows what education can do. Her new book, “A Fighting Chance,” tells of what it did for her — starting at age 16, when she secretly applied to college and persuaded her parents to let her go. After earning both a bachelor’s and a law degree, she immersed herself in bankruptcy law, which taught her how easily ordinary people can spiral into debt. Here, the Democratic U.S. senator from Massachusetts tells ProPublica why she’s decided to tackle the problem of student-loan debt, and what the government can — and should — do to help.
Why have you taken on the issue of student debt?
The cost of college has gone through the roof. More and more young people have to finance through bigger and bigger student loans. They leave school and they’re trying to start a life, start a family, get a job — and they’re drowning in debt.
I want every person to have the kinds of opportunities I had. It’s personal. My parents struggled financially. My father ended up as a maintenance man, and my mother worked the phones at Sears. Education opened a thousand doors for me. I had loans, and I worked part-time, and it was enough to keep me going. But the big difference is that I went to school at a time when this country was investing in students.
How big a problem are we talking about?
There’s $1.2 trillion outstanding in student loan debt. That’s more than credit card or car loans, more than any other kind of consumer debt except mortgages. It’s crushing people.
It also has the highest delinquency rate of all types of consumer debt.
That’s right. Because students can’t manage debt loads this size, particularly in a sluggish economy.
Why should people care about this issue?
Student loan debt affects the whole economy. Instead of buying a house or a car, young people are pinching pennies to deal with crushing amounts of debt. That’s not good for the economy. It’s not good for businesses. We need those young people entering the workforce and able to spend.
What is Congress doing to help?
This is the part that makes me grind my teeth. Right now, the United States government is making huge profits off the backs of our students. Our young people not only have to pay back the cost of the loans, they have to pay billions more in interest to the government — like an extra tax for trying to get an education. That’s just wrong. We ought to be investing in young people who are trying to get an education — not making it harder for them.
Student loans are treated differently than many other kinds of debt under bankruptcy law, so it’s much harder for struggling borrowers to discharge their student loans. Do you think this should be changed?
Yes. I have co-sponsored a bill with Sen. Durbin, D-Ill., that called for making student loans dischargeable in bankruptcy. Keep in mind: Young people who have student loan debt — they didn’t go to the mall and charge up a bunch of things they couldn’t afford — but if they had gone to the mall, they could discharge those debts in bankruptcy. It’s only the student loan debt they can’t discharge.