Midterm Elections 2014 Give Millennials a Chance For Student Loan Reform
Nearly 39 million borrowers are carrying more than $1 trillion dollars of federal student debt. As a one of those 39 billion borrowers weighed down by the thousands of dollars of debt that will take a lifetime to pay off, I wonder, first of course, how will I pay these loans off? But more importantly, who has my best interest in mind? Do the decision makers understand the issues facing young people today? If they do understand them, then what action will they take to secure my future?
Since millions of student loans are in danger of delinquency, will the student loan debt issue be on Congress' agenda? There are a total of 33 Senate seats and 435 House seats up for grabs in the 2014 midterm elections. But will our representatives' agendas mirror the issues facing young people? It appears that many politicians are using student loan reform as a tactic to get young people into the voting booths.
According to the Institute for College Access, “The average borrower with federal student loans now carries more than $26,000 in debt, a nearly 43% increase from 2007.” This is a bleak statistic and one with no quick fix. So what does the future hold for student debtors in a stagnant job market? This is a very complicated question to present, and our representatives should be the ones to answer it. Can young people use the midterm elections as a moment to motivate and hold politicians accountable? The short answer is, YES. We can engage in the political process, write letters, and vote with our feet; but that is the easy part.
The hard part is after election day when politicians’ agendas are enacted and the priorities stated in their rallies, commercials, and campaign materials are put to the test. Student debt is an issue that intersects with many other vital economic topics: unemployment, retirement, saving, home ownership, and the shrinking of the middle class. If young people cannot access affordable plans to finance their educations with flexible and fair products, then the gap between the wealthiest 1% and the 99% will continue to dramatically increase, and the economy will move in a downward slope.
For instance, borrowers who devote bigger shares of their incomes to repaying student debt spend less money purchasing economic drivers such as cars, homes, investments in small businesses, and savings for retirement. What effect does this have on the economy? A negative one. The Federal Reserve Bank of New York suggests the number of delinquent borrowers is increasing. About $52 billion in student loans have become delinquent since 2003. Statistics like these look like another bubble in the works. In combination with increasing delinquency rates, decreases in wages and a decrease in purchasing power can severely slow down the economy.
Our parents and grandparents had access to financial institutions, products, and educational resources that worked with them, not against them. Student loan interest rates, tuition costs, etc., cannot keep increasing as wages decrease or stay the same. We need access to resources similar to those our parents and grandparents had. If not, then our American dream will stay just that — a dream never a reality.
Midterm elections can be a moment to challenge and hold our representatives to their word. Some of the politicians seem to be making student debt a priority and even those who haven't, can. Think of it as quid pro quo: by supporting them and your needs, we deserve their support. Instead of voting with your feet, vote with your backpack.