We are in the midst of a crisis. With Americans shouldering $1.5 trillion in student debt, we must waste no time in taking meaningful action to help alleviate this tremendous burden.
Today, 730,000 Coloradans each owe, on average, more than $36,000 in student loan debt. And it’s not only recent graduates or millennials — more than 50,000 Coloradans over the age of 60 owe student loan debt — a 54 percent increase from 2012.
The problem is even worse for rural Coloradans where delinquency rates are significantly higher than the state averages. More than 130,000 rural Coloradans in counties like Moffat, Montezuma and Baca, owe student loan debt; and more than 20,000 of them are severely delinquent.
To add insult to injury, these borrowers are trying to navigate repayment in a sea of unscrupulous companies. Each month, hundreds of thousands of Coloradans — teachers, social workers, service members — take a portion of their paycheck and send it to a company that operates in the shadows, with little accountability to the borrower or to the taxpayer funding its operations.
For unlike servicers for mortgages credit cards and business loans, student loan servicers face no oversight over their operations. Left unchecked, these companies turn to predatory behavior designed to maximize profits.
Far too often, these same companies are saddling teachers with thousands of dollars in debt that should have been discharged, steering social workers and other public servants away from loan forgiveness and blocking service members from accessing military protections they earned through service to our country. Coloradans deserve better.
Amid all of this, the Trump Administration has spent the last two years systematically dismantling student loan borrower protections.
A recent report released by the Inspector General for the Department of Education based on internal audit of the Office of Federal Student Aid (FSA) documents widespread lack of oversight over student loan servicers, resulting in systematic dissemination of misinformation and predatory mishandling of student loan portfolios.
As the federal government walks away from student loan borrowers, it has left a $1.5 trillion black hole in the middle of our country, and a $26 billion black hole in the middle of Colorado.
That is why Colorado must take action. In the 2018 midterm election, young voters turned out in some of the highest numbers we’ve ever seen. And their number one issue is student loans.
Colorado can and must change the status quo. The Regulate Student Loan Servicers Act (SB19-002) would do just that. The bill, which passed out of the Senate with bipartisan support, would require student loan companies to be licensed and follow the rules — just as we require of mortgages and payday loan companies.
Beyond oversight, we must address the crisis with a multifaceted solution. Unfortunately, too many public servants — those same teachers, social workers, and thousands more — are simply not aware of the numerous programs that exist to alleviate the unsustainable burden of student loans.
The Employee Information Student Loan Programs Act (SB19-057), which was signed by Gov. Jared Polis in March, will ensure that the thousands of state employees who may be eligible for federal student loan repayment programs regularly receive enrollment and eligibility information.
Nearly three-quarters of a million Coloradans feel the mounting pressure of student debt and feel crushed by the predatory behavior of industry. Now is the time for leaders to come to their defense, instilling meaningful reforms to ensure borrows across the state have the protections and assistance they need to successfully navigate their student debt.
Coloradans have taken on historic debts to earn a degree in pursuit of the American dream. In return, let us send them a clear message: Colorado will lead the fight to end the student debt crisis. Colorado will stand up to protect them.
Steve Fenberg, D-Boulder, is majority leader of the Colorado Senate. Faith Winter is a Democratic state senator representing Westminster.
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