Hearing on student loan discharges ignores broader issues

Students increasingly take on massive amounts of debt to pay their high college tuitions. And they face diminished job opportunities upon competition of their degree. Just ask Danielle Jokela.

Jokela, a resident of Chicago, spoke before a Senate judiciary subcommittee on her personal level of indebtedness (about $98,000 in outstanding student loan debt) and her struggle to find an appropriate job with an unmarketable degree. Though the focus of the hearing today was the right to discharge student loans in bankruptcy, the larger issues of college affordability and diminished opportunity remain.

Jokela’s personal narrative highlighted those issues, not the right to discharge student loans.

She borrowed thousands upon thousands of dollars for a design degree from a for-profit institution without fully understanding the marketability of the degree post-graduation, her prospects for employment, or the repayment process on her loans.

Senator Dick Durbin (D-IL) proposed a bill last May to alter the provision of the 2005 bankruptcy law overhaul that made student loans nondischargeable in bankruptcy. Yet, passing this bill now will not fix the problem of students choosing the wrong institutions, the wrong degrees, or the wrong loans. This bill will not make college affordable, spur economic growth, or improve the job market.

Outstanding student-loan debt reached an estimated $867 billion in the fourth quarter, more than the all credit card debt in the United States. Congress must focus on laws that help students afford college and spur economic growth, helping ensure a manageable level of debt and a job after college. The root of the problem is inflated tuition, in which government has for too long been a major player.

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