Rep. Gottheimer Calls for Solutions to Student Loan Debt Crisis

During a House Financial Services Committee hearing with student loan experts Tuesday, Congressman Josh Gottheimer (NJ-5) called for solutions to greater protect student borrowers, to hold student loan servicers accountable, and to tackle the $1.5 trillion student debt crisis plaguing our nation.

“Today’s hearing comes as more and more Americans are defaulting on their loans, creating long-term financial consequences for both recent graduates and our national economy. In New Jersey, 61% of students graduated with student loan debt in 2017, and 47% of 18-34 year-olds in New Jersey are living with their parents — the most in the nation. The Federal Reserve stated recently that roughly 20% of the decline in homeownership among young adults can be attributed to the hefty increase of student loan debt,” Gottheimer said.

“Homeownership can be an incredible way to achieve the American dream, and I’m worried that not enough households are building wealth through homeownership due to increasing student debt. By forcing students to start paying back their loans right after graduation, we are setting our graduates up for failure. A ten-year repayment plan is the most common student loan repayment plan, but it usually takes several years at least after graduation to reach a point where a degree is paying financial dividends,” Gottheimer continued. “Finally, student loan servicers are increasingly omitting or misrepresenting information. We need to be creating clear rules of the road to better protect our student borrowers,” he added.

The Financial Services Committee has put forth a bill that would direct the U.S. Department of Housing and Urban Development to work with the CFPB and Federal Housing Finance Agency (FHFA) to review the barriers to homeownership for borrowers with student loan debt and make recommendations for policy changes that will responsibly reduce or eliminate these hurdles.