The Founders called for uniform bankruptcy laws ahead of the power to raise an army and declare war in the Constitution. Student loans, however, have been uniquely stripped of bankruptcy protections, and the results have been disastrous.
The lending system has literally become a national threat. Before the pandemic, 45.4 million people were holding $1.6 trillion in federal student loans, and 80% were either unable to pay, or were paying but their balances were going up. Today, student debt in over one-third of U.S. states exceeds the total annual state budget.
Older people outnumber younger people with student debt, and they owe 3 times more, despite having borrowed far less. The default rate for 2004 students is 40%, even though they borrowed less than a third of what is being borrowed today. The default rate for current borrowers will likely exceed 75%, which is roughly four times higher than the default rate for sub-prime home mortgages. This is - by all rational metrics - a catastrophically failed lending system.
Congress created this problem. You have a responsibility to correct it.
Please co-sponsor and champion S.2598 (FRESH START Through Bankruptcy Act), the bipartisan bill that will return the right of bankruptcy to federal student loan borrowers who have been out of school for more than ten years. It is your constitutional, and moral duty to stand up for your people over this predatory lending system.