Student Loan Debt Forgiveness Act of 2017
Introduced: October 3, 2017
Co-introducers: Councilmembers Elissa Silverman, Brianne K. Nadeau, and Trayon White
FACT SHEET | BILL TEXT
Summary: To establish a student loan debt forgiveness program for residents of the District.
Councilmember Grosso's Introduction Statement:
Currently, the national student debt exceeds $1.3 trillion, surpassing all other types of non-mortgage debt.
As one of the most educated cities in the U.S., the District of Columbia is home to several reputable colleges and universities; so it should come as little surprise that our residents experience significant student indebtedness.
In fact, the District of Columbia maintains the highest concentration of student debtors in the country. Just last week, the U.S. Department of Education released state-specific information on student debt, for the first time ever. According to their analysis, D.C. residents owe $5.6 billion dollars in federal student loans with 112,200 student loan borrowers in our city.
Repayment of this type of debt is challenging generally, but it is especially difficult for students who attend community college or for-profit colleges for some time, but never earn a degree or certificate.
Making matters worse, here in D.C. our communities of color are being hardest hit by student debt, as residents East of the River are three times more likely to be at least 9 months behind on their loan payments, than residents in the rest of the city who carry twice as much debt.
The negative impact of educational borrowing on a borrower’s potential wealth accumulation cannot be overstated. Carrying a high amount of student debt can severely limit an individual’s purchasing power and can have a detrimental effect on the greater economy. Increased student debt impairs home sales, decreases retirement security, stifles entrepreneurship and discourages individuals from seeking careers that require additional education.
Last year, we created a Student Loan Ombudsman position within the Department of Insurance, Securities and Banking and required student loan servicers to become licensed to ensure that servicers are responsive, acting according to clear standards and not creating obstacles to repayment and driving borrowers into default.
While this was certainly a critical step and I am thrilled that Dr. Charles Burt has been hired as the Student Loan Ombudsman, we need to do more to ensure that attending college is not a financial drain on individuals and families, especially families that may have little to no experience with college.
That is why today, along with my colleagues Brianne Nadeau, Trayon White and Elissa Silverman, I am introducing the Student Loan Debt Forgiveness Act of 2017.
This bill establishes a student loan forgiveness program for D.C. residents who are currently enrolled in a federal income-driven repayment plan and meet other eligibility guidelines.
The program will be administered by the Office of the State Superintendent for Education and qualified applicants would be eligible to receive an award equal to 100% of their monthly payment for up to 60 months.
Passage of this legislation, coupled with the work of the Student Loan Ombudsman, ensures that we are protecting our student loan borrowers to the fullest extent and providing them additional opportunities for success.