This morning, the House Committee on Financial Services held a hearing on the student debt crisis: A $1.5 Trillion Crisis: Protecting Student Borrowers and Holding Student Loan Servicers Accountable.
Not sure if you have four hours to watch? Here are some highlights from our live tweets of the hearing.
The Panelists
Five witnesses testified over the course of the five hour hearing, brining a variety of perspectives and expertise.
“Student loan borrowers have less rights and fewer protections than any other kind of borrower.” @sethfrotman
That includes a lack of bankruptcy protection. Credit cards, medical debt, mortgage debt: all are dischargeable in bankruptcy. Why not student loans? #studentdebtbomb
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
Seth Frotman served as the Student Loan Ombudsman for the Consumer Financial Protection Bureau (CFPB), the top government watchdog over student loans, for three years. Frotman left the CFPB after an eleven year career in August 2018, citing a lack of faith in the Trump Administration’s ability to protect borrowers. “It has become clear that consumers no longer have a strong, independent Consumer Bureau on their side,” he said in his scathing resignation letter. In his position as the Executive Director of the Student Borrower Protection Center, Frotman continues to advocate for student borrowers.
While the hearing wasn’t directly related to bankruptcy and student loans, it did look at the bigger picture of how the rights of student borrowers have been chipped away over time.
Joining Frotman on the panel of witnesses was Hasan Minhaj, host of Netflix’s Patriot Act. Minhaj hosted Frotman on the Patriot Act episode examining student loans, which is definitely worth a watch.
“That room alone had over 6 million in student loan debt,” @hasanminhaj on the audience of the student loan debt episode of @patriotact.
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
Also on the panel was Persis Yu, a Staff Attorney from National Consumer Law Center; Ashley Harrington Senior Policy Counsel for Center for Responsible Lending; and Jason Delisle, a Resident Fellow at the American Enterprise Institute.
“Borrowers need rights and consumer protections, and they need the ability to enforce those protections.” Persis Yu, @NCLC4consumers
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
“2 in 5 borrowers are in default or severely delinquent.” Ashley Harrington, @CRLONLINE
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
“I don’t see the widespread inability of people to repay their student loans,” Jason Delisle, @AEI.
He should talk to some of the attorneys at @NACBAorg. They could tell you some of their clients’ horror stories.
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
The Representatives
Only one cosponsor of Student Borrower Bankruptcy Relief Act is on this particular committee: Madeleine Dean.
“The foundation of an American dream is an education,” @RepDean. She’s one of the original cosponsors of the Student Borrower Bankruptcy Relief Act, too. #HR2648
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
However, several members of the committee echoed our stance that borrowers need options and protections:
.@repallawsonjr says that he has introduced several bills to help ease the burden of student debt. Why not consponsor #HR2648 and add restoring bankruptcy protections to the list? https://t.co/qBiUIlo2Qm
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
“It is very dangerous when we start blaming borrowers unfairly.” @RepRashida.
PREACH.
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
“You cannot overstate 1.6 trillion in debt crushing over 45 million borrowers,” @RepPressley. “We are past the point of paying attention. It is time to act.”
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
“This a hard and long hearing for anyone with student loan debt,” @AOC.
Understatement.
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
.@RepGregoryMeeks “If you’re rich, you’re gonna qualify for a loan. You shouldn’t have to need one. But if you’re poor? You’re in trouble.”
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
“They need banklruptcy protections and consumer protections,” @NCLC4consumers‘s Yu to Rep @jahimes.
We agree. Here’s a list of Senators and Representatives that are cosponsoring a bill to restore the protection of bankruptcy to student loan borrowers.https://t.co/6zVDLsjHoH
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
“This a hard and long hearing for anyone with student loan debt,” @AOC.
Understatement.
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
There was even a mention of the 2005 bankruptcy bill from Representative Sean Casten!
.@RepCasten asks how the lack of bankruptcy protection (thanks to the 2005 bankruptcy bill) for student loans impacts underwriting.
Great to see that someone’s noticing the ripple effects that lack of bankruptcy protection is having on the greater student loan landscape.
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
Though bankruptcy is not the answer for everyone’s debt, not even having that option has left borrowers without leverage, creating an environment where abuse can flourish.
Next steps
“It baffles me that we haven’t done anything to wrestle with this problem.” @RepSylviaGarcia on this being the first hearing to take on the #studentdebtbomb.
— Student Debt Bomb (@stdntdebtbomb) September 10, 2019
Unfortunately, the Student Borrower Bankruptcy Protection Act has been sitting in committee for months now. Contact your senators and representatives and let them know that you want them to cosponsor the Student Borrower Bankruptcy Relief Act! Click here for more information. And if they’re on the Subcommittee on Antitrust, Commercial and Administrative Law? Ask them what their next steps are on getting the billed passed.