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Is the student loan debt burden the next financial crisis?

• Apr 3, 2018 at 5:00 PM

Blogger Lorelei Salas says it took her 14 years to pay off about $20,000 in her student loans, but that barely put a dent in her total debt.

“Up until two months ago, I was carrying a student loan debt balance of over $130,000,” she wrote for thehill.com Opinion blog. “My monthly payments were just over $1,250 per month — a month’s rent for many people in New York City.”

Salas is the commissioner of the New York Department of Consumer Affairs, which houses the city’s Office of Financial Empowerment. She wonders if student loan debt is the nation’s next big financial crisis.

“I attended a private law school while raising two children and I had no other way to finance my education than to take out loans,” she wrote. “For many years after graduation, I lived paycheck-to-paycheck. Luckily for me, my loan payments were tied to my salary — thanks to the very income-driven repayment plans that Congress is proposing to axe with HR 4508, Promoting Real Opportunity, Success and Prosperity (P.R.O.S.P.E.R.) Act. Income-based repayment allows for flexibility in repaying student loans rather than defaulting or deferring if an individual has a swing in their income. Eliminating this already established plan could harm or make it impossible for those without wealth to enter careers such as teaching, nursing, public service and many more.”

Salas says the P.R.O.S.P.E.R. Act only promotes opportunities for private lending institutions and for-profit colleges, “not the millions of hardworking Americans struggling to pay off their loans.”

Read the complete blog post: “Is student loan debt the next financial crisis?”

The opinions expressed by bloggers are not necessarily shared by the Grand Haven Tribune or its employees. They are the sole opinion of the bloggers, who are not employed by or compensated by the Tribune.

 

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