The enduring inequity of student loan debt
As millions of Americans continue to suffer from the ongoing COVID-19 pandemic, it is important to remember that this crisis has not broken any systems, but rather revealed the ways in which our economic and health systems are already deeply dysfunctional. The inequalities that have led to Black people, communities of color and poor people suffering the greatest effects of the ongoing crisis are the very same as those which make those same groups the most vulnerable to the effects of the student debt crisis. Our economic recovery plans must protect our student loan borrowers, particularly our student loan borrowers of color, who are hit hardest by the crisis. This economic crisis comes as the Massachusetts Legislature’s House Ways and Means Committee is taking up an Economic Development and Job Creation Bill (H.4854).
The student debt crisis is not only an economic justice issue, but a racial justice issue as well. As the Student Borrower Protection Center (SBPC) recently reported, Black and Latinx communities are disproportionately affected by the burden of student debt and distress. Black and Latinx borrowers take on a greater debt burden to finance higher education, and their delinquency and defaults rates are disproportionately higher than that of their white counterparts as well. Katherine Welbeck from SBPC stated, “As our nation looks to create a more equitable and just economy, we cannot overlook the longstanding effects of discriminatory economic policy and how our student debt crisis is a direct reflection of, and continues to perpetuate, systemic barriers and racial discrimination.”
To tackle the issue head-on in Massachusetts, we need to include the Student Loan Bill of Rights in our Economic Development and Job Creation Bill (H.4854) as a first step. This elemental bill will provide basic consumer protections for borrowers, including mandatory licensure and regulation for services, as well as regulations that would prohibit servicers from engaging in unfair practices. Additionally, the bill will create a student loan ombudsman, a single office under the Attorney General where borrowers can get the information they need about their loans.
Massachusetts must join the national movement to protect student borrowers, including Connecticut, Colorado, Illinois, Maine, Maryland, Nevada, New Jersey, New York, Rhode Island and Washington, which have all enacted student loan bills of rights. Similar legislation has recently been introduced in Iowa, Minnesota, Missouri, New Mexico, North Carolina, California and Oregon.
It is time for Massachusetts to pass the Student Loan Bill of Rights and for our legislative leaders to make it a priority to protect the state’s 855,000 student-loan borrowers who have a combined $33 billion in student loans. Any legislators who claim to care about our historically most-marginalized communities, including our communities of color and low-income communities, must support the inclusion of the Student Loan Bill of Rights into our Economic Development and Job Creation Bill (H.4854).
Claudio Martinez is executive director of Zero Debt Massachusetts.