"Carrying these high student loan debts with high interest rates is really like having an anchor around you."
U.S. Rep. Joe Courtney
The federal reserve has calculated the amount of American student loan debt is over $1 trillion, greater than car loan and credit card debt. Lawmakers are trying to provide relief for students.
Audrey Lawrence, 23, is $73,000 in debt. She graduated college two years ago as a communications major, and pays $1,200 a month towards her loans. She is working at Connecticut Public Broadcasting Network as a customer service representative.
"Right now, I can't even afford an apartment," Lawence said. "I'm still living at home, and I house-sit, and I don't pay rent. I haven't even thought about the future, about buying a house, or anything, because I don't really have enough saved to do much right now."
Lawrence graduated from Quinnipiac University, which was ranked sixth in the country by a U.S. News & World Report list of colleges that leave graduates with the most student debt. There, the average debt load is $44,000.
In a statement, the university said they have increased the amount of grants and scholarships they provide, and they do offer financial education to students.
State Representative Matt Lesser, who is not too far out of college himself, said student debt is the second biggest source of debt in the country, behind home mortgages. Two-thirds of Connecticut graduates are paying off loans. Lesser proposed legislation to help, called the Student Loan Bill of Rights.
"We would be the first state in the country to adopt this," Lesser said. "It would focus on education, making sure that you and your parents would have opportunity to have education about products available to you about getting your loan forgiven in some places, making sure that you know what you are signing up for. The second part is regulation: regulating the companies that are servicing these loans to make sure that people are not being exploited, that there aren’t fly-by-night companies doing things that are not protecting your interests, or the interests of the the students around the states, and borrowers."
The third part of the bill is assistance through a newly-created ombudsman.
"An ombudsman is somebody who looks at your particular situation, and works in a neutral way to figure out: are you in the best possible circumstances or not, and if not, they work with you and help you sort out what the better option is," Lesser said. "So that's the idea, having somebody you can call for assistance, and navigating what can be a really complicated system."
Lesser said the ombudsman would create educational courses for those who are taking out loans in Connecticut. The bill has passed the House, and waiting on a vote in the Senate.
Connecticut Second District Congressman Joe Courtney helped to pass the federal Student Loan Certainty Act in 2013 which lowered interest rates down to three or four percent for borrowers.
This year, Courtney is trying to do a similar thing, focusing on students who graduated before the act went into effect.
"What our bill is seeking to do is reducing the burden that is already piled up out there, and really acts as a real obstacle for people to succeed in life," Courtney said.
The Bank on Student Loan Emergency Refinancing Act would help lower interest rates to roughly three percent.
"For young people," Courtney said, "carrying these high student loan debts with high interest rates is really like having an anchor around you, in terms of holding you back. The bill basically unlocks these high rates, and allows people to get themselves into a lower cost debt situation."
This would help Audrey Lawrence. Her interest rate is almost eight percent. Even after accumulating so much debt, Lawrence said her college experience was worth it, although she wishes she had been more aware of her options.
"On the one hand, I think I loved going to Quinnipiac, and I found my passion there, and it was a great program, and I don’t think I would have the same opportunities had I gone to a different school," Lawrence said. "I got to intern in New York City for two semesters, and it was amazing. At the same time, there may have been other options for me that I didn’t really look at that maybe I should have, looking back."
Lawrence said student debt is inevitable, but with these new laws, the debt burden could be more manageable.
This story was produced in partnership with Connecticut Public Broadcasting Learning Lab, senior students at Hartford’s Journalism and Media Academy, and WNPR, with assistance from Catie Talarski, Tikeyah Whittle, Jim Moffett, and Wilfredo Rivera. Our education reporting is funded by the Nellie Mae Foundation.
