Student loan debt is a major challenge for individuals the moment they graduate or leave college. Difficulty in repayment can become a major obstacle that prevents student loan borrowers from successfully pursuing their career and life ambitions.
Our Senior Director, Cate Rysavy, testified at the Minnesota House of Representatives Higher Education Policy and Finance Committee on Tuesday regarding student loan debt.
Student loan payments and defaults can have a major impact on the borrower and the economy:
- Student loan payments leave less room for borrowers for other expenses – renting apartments, buying homes, paying household bills, and establishing small businesses.
- The Federal Reserve estimates the true default rate as 31% of all graduates – and default means large penalties added to debt, judgments and wage garnishments, in turn impacting the growth of the economy.
- Borrowers who become delinquent on their payments can find their credit scores drop by 100 points or more, and credit scores are used by employers, landlords, lenders, and insurance rates.
Representative O’Neill has introduced a bill to the Minnesota House of Representatives to provide student loan repayment counseling to borrowers in the state of Minnesota. Minnesota ranks fifth in states with the highest rate of student loan debt in the US.