STU­DENT LOAN DEBT CRI­SIS

The Fresno Bee (Sunday) - - Front Page - BY MICHELLE R. SMITH

A pres­i­den­tial can­di­date’s per­sonal ex­pe­ri­ence with six-fig­ure debt helps shine a new light on the prob­lem.

Demo­cratic pres­i­den­tial can­di­date Pete But­tigieg knows first­hand the bur­den of six-fig­ure stu­dent loan debt. He and his hus­band, Chas­ten, are far from alone, though, and their per­sonal col­lege in­debt­ed­ness is help­ing to keep the is­sue on the na­tional stage.

With loans to­tal­ing more than $130,000, they are among the 43 mil­lion peo­ple in the United States who owe fed­eral stu­dent loan debt.

The debtors are so numer­ous and the to­tal debt so high – more than $1.447 tril­lion, ac­cord­ing to fed­eral sta­tis­tics – that sev­eral of the Demo­cratic can­di­dates have made ma­jor pol­icy pro­pos­als to ad­dress the cri­sis. Their ideas in­clude wip­ing away debt, low­er­ing in­ter­est rates, ex­pand­ing pro­grams that tie re­pay­ment terms to in­come and mak­ing col­lege free or debt-free.

Stu­dent loan debt is of­ten dis­cussed as an is­sue that mostly af­fects mil­len­ni­als, but it cuts across age groups. Fed­eral sta­tis­tics show that about 7.8 mil­lion peo­ple age 50 and older owe a com­bined $291.9 bil­lion in stu­dent loans. Peo­ple age 35 to 49, a group that cov­ers older mil­len­ni­als such as But­tigieg as well as Gen­er­a­tion X, owe $548.4 bil­lion. That group in­cludes more than 14 mil­lion peo­ple.

One of the most de­tailed plans to help solve the prob­lem has come from Sen. Eliz­a­beth Warren of Mas­sachusetts, who says she would en­tirely erase stu­dent debt for 75% of bor­row­ers while mak­ing pub­lic col­leges and uni­ver­si­ties free. Her plan would be paid for by a tax on “ul­tra-mil­lion­aires,” those house­holds with a net worth of $50 mil­lion or more. Warren wants to can­cel $50,000 in stu­dent loan debt for each bor­rower with a house­hold in­come un­der $100,000 and would can­cel smaller amounts for those who earn more.

Sen. Bernie San­ders of Ver­mont has out­lined a plan to make pub­lic uni­ver­si­ties tu­ition-free and says he wants to lower stu­dent loan rates and “sub­stan­tially lower stu­dent debt.”

For­mer Rep. Beto O’Rourke of Texas stops short of ad­vo­cat­ing for pro­grams to can­cel all debt, like Warren wants to do. In­stead, he has sug­gested wip­ing away debt for peo­ple who go into jobs where there’s a man­power short­age, such as doc­tors in ru­ral ar­eas, but it’s not clear which pro­fes­sions would qual­ify.

He also has said he wants to give Amer­i­cans two years of free tu­ition at com­mu­nity col­leges, make four-year state uni­ver­si­ties debt-free for those with low and mod­est incomes and al­low bor­row­ers to re­fi­nance stu­dent loans at lower in­ter­est rates.

Ju­lian Cas­tro, hous­ing sec­re­tary in the Obama ad­min­is­tra­tion, says he wants to elim­i­nate tu­ition at pub­lic col­leges and uni­ver­si­ties. He has is­sued a plan that would not re­quire loan re­pay­ment un­til bor­row­ers earn more than 250% of the fed­eral poverty level, cur­rently $25,750 for a fam­ily of four. It would cap monthly pay­ments at 10% of their in­come af­ter that.

Sen. Ka­mala Har­ris of Cal­i­for­nia has publicly called for debt-free col­lege, wants to al­low peo­ple to re­fi­nance their loans at a lower in­ter­est rate, base re­pay­ment on in­come and sim­plify fi­nan­cial aid ap­pli­ca­tions to make it eas­ier for needy stu­dents to ap­ply.

If elected, But­tigieg, the 37-year-old mayor of South Bend, In­di­ana, would likely be the first pres­i­dent with stu­dent loan debt. Barack and Michelle Obama said they paid off their stu­dent loans a few years be­fore he was elected to the U.S. Se­nate in 2006.

But­tigieg of­ten speaks about the ex­pe­ri­ence that he and his hus­band have had with stu­dent loan debt. But­tigieg grad­u­ated from Har­vard in 2004, then won a Rhodes schol­ar­ship and grad­u­ated from Ox­ford in 2007. The mayor pre­vi­ously told Vice that he got through school with­out much debt, but that Chas­ten racked up loans while get­ting bach­e­lor’s and mas­ter’s de­grees to be­come a teacher.

In his fi­nan­cial dis­clo­sure filed with the Of­fice of Gov­ern­ment Ethics in mid-May, But­tigieg re­ported that he and his hus­band have be­tween $110,000 and $265,000 in stu­dent loan debt. The re­port re­quires a range rather than a spe­cific dol­lar amount. Chris Meagher, a cam­paign spokesman, said the ex­act amount is $131,296.

Amer­i­cans with stu­dent loans owe on av­er­age $33,000, so the But­tigiegs’ debt is on the high end. They are among the 2.8 mil­lion Amer­i­cans who owe more than $100,000 in fed­eral stu­dent loan debt.

Meagher did not an­swer ques­tions about whether the loans be­long to But­tigieg or his hus­band, or both.

The dis­clo­sure state­ment shows that the cou­ple has 20 loans out­stand­ing, with in­ter­est rates rang­ing from 3.4 per­cent to 6.8 per­cent, on loans that were opened be­tween 2009 and 2017. Fif­teen of those ac­counts, more than $100,000 of the bal­ance, were re­ported to be on an in­come-based re­pay­ment plan.

But­tigieg has spo­ken about mak­ing it eas­ier to re­fi­nance stu­dent loan debt. Dur­ing a town hall hosted by Fox News, he dis­cussed ex­pand­ing the fed­eral Pell grant pro­gram and mak­ing it eas­ier to pay off debt through pub­lic ser­vice. On his web­site, he called for mid­dle- and low-in­come fam­i­lies to pay “zero tu­ition” at pub­lic col­leges, or to attend them “debt free.”

But­tigieg has also called for more sup­port for stu­dents who en­ter pub­lic ser­vice, such as teach­ing.

Seven 2020 pres­i­den­tial con­tenders have pro­posed leg­is­la­tion in the Se­nate to do that. The bill would sim­plify and ex­pand a pro­gram that for­gives fed­eral loans for pub­lic ser­vice work­ers who make 120 monthly loan pay­ments while work­ing for a gov­ern­ment agency or qual­i­fied non­profit. Only about 1% of bor­row­ers who ap­plied to the pro­gram were ap­proved. The can­di­dates back­ing the leg­is­la­tion are Warren, San­ders, Har­ris, and Sens. Kirsten Gillibrand of New York, Amy Klobuchar of Min­nesota, Cory Booker of New Jersey and Michael Ben­net of Colorado.

For­mer Vice Pres­i­dent Joe Bi­den made a call for a sim­i­lar sim­pli­fi­ca­tion and ex­pan­sion Tues­day in a speech in Hous­ton be­fore one of the nation’s largest teach­ers’ unions.

LYNNE SLADKY AP file

Demo­cratic pres­i­den­tial can­di­date Pete But­tigieg, the mayor of South Bend, Ind., left, is in­tro­duced by his hus­band Chas­ten But­tigieg, right, dur­ing a fundraiser at the Wyn­wood Walls in Mi­ami on May 20. But­tigieg knows first­hand the bur­den of six-fig­ure stu­dent loan debt.

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