Last week, Sen. Elizabeth Warren (D-MA) introduced a bill that would guarantee that, for one year, the federal government would charge the same near-zero interest rates for student loans that it does now for Big Banks.
Warren’s bill has received praise from activists, and for good reason — student debt has become a crisis in the U.S. Here are five facts about that crisis:
- Student Loan Debt Is Over $1 Trillion: As of last year, student loan debt exceeded a whopping $1 trillion. “Young consumers are shouldering much of the punishment in the form of substantial student-loan bills for doing exactly what they were told would be the key to a better life,” said Rohit Chopra of the Consumer Financial Protection Bureau at the time.
- Student Debt Has Surpassed Most Other Types Of Consumer Debt: As of 2010, student loan debt outstanding surpassed auto loans, credit cards, and revolving home-equity loans, as this graphic from the Wall Street Journal shows:Ai??
- The Average Debt Burden Is Double What It Was In 2003: In 2003, the average student loan debt burden wasAi??$10,649. Now it’sAi??$20,326.
- It’s Very Difficult To Discharge Student Debt Thanks To A 1976 Law:Ai??You can discharge various forms of debt by declaring bankruptcy such as credit card and auto loans. But in 1976,Ai??Congress passed a lawAi??to make it very difficult to discharge student loan debt under a similar process. Reps. Steve Cohen (D-TN) and Danny Davis (D-IL) have repeatedly introduced legislation to reverse the 1976 law.
- It Wasn’t Always This Way: For many in today’s generation, student debt is a fact of life — a necessary burden to getting a college degree. But the situation wasn’t always so dire. In California, universities up until 1970 did not charge tuition. Many other states also had low-cost or free college. But in the past 30 years, the cost of a college degree has increased by 1,120 percent.