For example, despite the lack of statutory repayment options for private loans, the nation’s bankruptcy law gives special treatment to student loan lenders by severely limiting the ability to discharge this debt. Private student loans issued by for-profit companies should be treated the same as other debts like credit cards, car loans and mortgages, and allowed to be discharged in bankruptcy — the borrower’s last resort in a personal financial crisis.
Congress also has an obligation to address the cost of college itself. If tuition increases were not dramatically outpacing inflation, students wouldn’t have to increasingly rely on more debt to pay for college. And we should do everything possible to protect students by first maximizing their federal student aid options before incurring more expensive debt. With the reauthorization of the Higher Education Act on the horizon, these questions should be front and center.
Our nation’s economic future depends on a skilled, educated workforce. And our system for financing that workforce should serve students and graduates, not the other way around. We need to make sure — whether it is how federal student loans are serviced or how private student loans are made and handled — that tomorrow’s scientists, engineers, teachers and entrepreneurs are treated fairly. We need to solve the nation’s fiscal cliff crisis by year’s end, and next year we must take care not to allow millions of new fiscal cliffs to form in homes across the country.
Rep. George Miller of California is the senior Democrat on the House Education and the Workforce Committee and authored the College Cost Reduction and Access Act of 2007.