Solving Our Nation's Student Loan Crisis

Written By Mark Dunec

Despite their young age, our nation’s students are saddled with debt. The average student attending a NJ university holds $29,287 in debt from student loans, the eighth highest total in the nation. In total, there is $1 trillion in outstanding student loan debt in the US today.

Because students are burdened with financial instability, more and more college grads are moving home with their parents. These millennials are less likely to purchase homes in large part because of their student loan debt. These students cannot move on with their lives because of their massive fiscal obligations.

If we want to allow an entire generation to begin to fight for the American Dream, we must help them. Student loan rates currently range between 6 and 8 percent, higher than most mortgages. Why should students pay such a high rate when some mortgages are cheaper?

This is why I support Senator Elizabeth Warren’s proposal to tie student loan interest rates to the Federal Reserve interest rate. Aptly named the discount rate, the Federal Reserve charges low interest rates to commercial banks on loans. This rate is the lowest possible interest rate, currently 0.75 percent, and will always be the lowest rate. If we tie student loan interest rates to the discount rate, students will be able to pay back their loans, move out of their parents homes, and begin living their lives.

When these students apply for loans, it will be at a fixed rate, the discount rate at the time of the loan application. This will ensure that students receive the education they deserve at a reasonable cost. With lower interest rates, students who could not otherwise afford student loan interest payments will also receive the opportunity to acquire a college education.

With more money in their pockets, an entire generation will be able to begin purchasing homes, cars, and contribute to our national economy. If we want our economy to keep growing and a new generation of Americans to succeed, we must lower student loan rates.

Mark Dunec is a professional problem-solver running for Congress in New Jersey’s 11th Congressional District.