Student Debt Is ‘Poisoning Everything Else In Our Economy,’ Says Mass. State Sen. Eric Lesser
As the Massachusetts Senate unanimously passed a bill to increase oversight of the student loan industry in the state, the measure's House backers pointed to their own borrowing experiences to make the case for why their chamber should follow suit.
Sen. Eric Lesser, the sponsor of the bill (S 2380) that passed the Senate Wednesday, said it would create a student loan ombudsman in the attorney general's office, require the state licensing of student loan servicers and empower state officials to investigate abusive practices by loan servicers.
Lesser, a Longmeadow Democrat, said on the Senate floor that the bill would shine a light on an industry that now operates in the shadows, and that the country has reached "the boiling point" on student loan debt.
Nationwide, there is more than $1.2 trillion in outstanding student loan debt, and 70 percent of loan defaults last year were by people who qualified for lower payment options, Lesser said. In Massachusetts, the average student loan debt load has increased by nearly 75 percent in the past 10 years, he said.
"It's poisoning everything else in our economy," Lesser said earlier in the day at a press conference touting the bill. "It's delaying homeownership, it's delaying marriage, it's delaying the ability to have children and start families because people feel crippled by these really excessive and extreme student loan balances."
Rep. Natalie Higgins, who sponsored the House version of the bill, joined Lesser and other lawmakers for the press conference where she said she graduated from Northeastern University law school with about $130,000 in student debt and is now on an income-based payment plan.
"About this time last year, I noticed $1,300 had been removed from my bank account about two weeks before my mortgage was due," the Leominster Democrat said. "I went, 'What's going on? Where'd this money go?' and I found out I missed the one email that was sent to my old email account, and I got kicked out of my income-driven repayment plan. I didn't know. They didn't tell me after that one ask for reverification."
The former head of the Public Higher Education Network of Massachusetts, Higgins said she was in a much better position than most borrowers because she knew her rights.
She said she worries about others in a similar situation who might not know how to get back on the payment plan, or may not even be aware a plan is available to them in the first place.
Rep. Adrian Madaro of East Boston said it took him nearly a decade to pay off the debt he incurred to attend Tufts University and expects he'll be in the "same situation" as Higgins once he graduates law school, anticipating about $100,000 in debt.
Madaro said he looks forward to working with House lawmakers to take up the bill "shortly," and said it will empower students, help them understand their rights, and give government the tools to protect students.
"This is a critical and necessary step to tackling what really has become an albatross hanging around the neck of young people in our commonwealth and across the country," Madaro said.
This report was originally published by State House News Service.