“President Biden’s decision to cancel student loan debt for millions of borrowers is the right move at the right time, particularly after the pandemic-related financial and health struggles so many Americans have faced. We particularly applaud the focus on low-income borrowers. But to avoid forcing current and future students into the same debt morass, we must act in a comprehensive manner to modernize the federal student loan program. Congress, state legislatures, federal agencies, loan servicers, and colleges and universities all bear responsibility for the problems plaguing the student loan program and all must contribute to the solutions.
Congress can and should take a variety of steps, including lowering student loan interest rates, capping the interest that accrues on loans and streamlining a complicated and confusing repayment system, and restoring the ability to discharge student loan debt through bankruptcy. The Department of Education needs to enhance its administrative and technical capacity with a priority on customer service at the same time—and get rid of poorly performing loan servicers. State legislators also need to act to reverse state disinvestment in higher education, a major driver of rising tuition prices at public institutions and a big reason why many students are forced to borrow more to pay for college.
It is extremely important that colleges and universities also do their part. Institutions must provide an education of value in all of their programs and to all of their students. To that end, colleges and universities need to be clear about student outcomes and transparent about cost and price as students and families make decisions about financing a degree. Institutions also must ensure that students don’t face needless barriers to transferring credit earned elsewhere, something that can slow the time to a degree and increase costs.
So even as we applaud today’s move to forgive a portion of student loan debt, we must understand that the federal student loan program is broken and that it is incumbent on all of us—lawmakers, the Department of Education and loan servicers, state legislatures and institutions—to fix it, and to do so as quickly as possible.”