Student loan debt has reached a total of one trillion dollars due to rising tuition costs. Since 1980, the cost of a 4-year college education has increased 827%. The average grad now has to take out $25,000 of student loans to offset this soaring cost. As borrowers struggle to pay back their loans, they are unable to invest in the future and pursue the American dream that an education was supposed to afford in the first place.
A vicious cycle has emerged as young adults are told that they must pursue an education to ensure a successful future. This means they must borrow money to finance the exorbitant tuition costs, and then are sometimes unable to find a job to pay back the loans. Sadly, 1 of every 2 graduates is either jobless or underemployed. Student loan debt, coupled with the poor job market have created economic dire straits that need to be addressed now.
The key tenets of H.R. 4170, the Student Loan Forgiveness Act, include:
1. Capping the payment amount at 10% of a borrower’s income and offering forgiveness of up to $45,500 after 10 years of repayment
2. Capping interest rates on federal student loans at 3.4%
3. Forgiving student loan debt for borrowers who work in public service after 60, rather than 120 months
4. Options to refinance private loans
The Student Loan Forgiveness Act provides a solution to relieve student loan debt and help avert an all-out crisis.