High school students face immense pressure from their teachers and counselors to enroll at a traditional four-year university following graduation. Unfortunately, the cost of many universities has grown to be preposterous. Many high school students see the option of a student loan as the best decision for their future, but many times it can hurt them in the long run.
Student loans can appear beneficial for students, but many 18-year-olds aren't fully cognizant of the significant amount of money they are borrowing, as in many cases, this is the largest financial decision they have ever had to make. Borrowers will all one day be responsible for paying this money back, with interest. Unfortunately, the result of student loans far-too-often is debt that can, in some cases, take a lifetime to pay back.
An unsustainable amount of debt can serve as an obstacle in achieving lifelong independence for young Wisconsinites. Specifically, the burden of debt can often withhold or delay these borrowers from purchasing a home or even starting a family.
To mitigate student loan debt for young people, I have introduced the Responsible Borrowing Act. This bill seeks to solve the problem of student loan debt before it starts by providing students with necessary guard rails from their school, meaning colleges would be able to teach students the importance of planning for the future by setting the amount of money they can, and should, borrow.
Additionally, along with Congressman Luis Correa (D-CA), I introduced a bipartisan bill that will restore the right to discharge student loan debt in bankruptcy. This bill will help students by increasing risk for lenders, such as the federal government and private lenders. Currently, there is no risk for lenders because they remain protected by bankruptcy if a borrower of theirs declares. In other words, they are still getting their money back, with interest, regardless of the financial outlook of the borrower. By making student loan debt dischargeable in the bankruptcy process, my bill will force lenders to supply loans more responsibly, helping students.
A vital part of the college experience is developing financial literacy and learning to live on your own. Despite learning about financial literacy in the classroom, many student borrowers are unconcerned about their future ability to pay their student loans at the time of borrowing, which results in long-term repercussions that can have dire consequences on every future financial decision by an individual.
Excessive loans given to teenagers can later hinder their success as adults into their 30s and 40s. By making banks and government more liable for these gigantic loans, they will not lend such large amounts of money if they do not expect it will be repaid. Students are responsible for any loan they take out, so we should be doing more to assist them in making the most responsible decision for a financially sound future.
