‘A generational crisis’: Student loan debt in Massachusetts reaches $33.3 billion

  • This Wednesday, Jan. 2, 2019 photo shows the Massachusetts Statehouse in Boston.  AP PHOTO/ELISE AMENDOLA

  • State Sen. Eric Lesser, D-Longmeadow  SUBMITTED PHOTO

Staff Writer
Published: 3/8/2019 3:17:32 PM

NORTHAMPTON — A new report has revealed the extent of student loan debt in Massachusetts, finding that 855,500 borrowers owe a total of $33.3 billion.

The analysis was published by the Student Borrower Protection Center, a Washington, D.C. nonprofit headed by the former student loan ombudsman at the Consumer Financial Protection Bureau under the Obama administration, Seth Frotman. The center released the data together with state Sen. Eric Lesser, D-Longmeadow, who, together with a coalition of other organizations, are pushing for passage of Lesser’s “Student Loan Bill of Rights.”

“This is really a generational crisis that we’re facing,” said Lesser, whose district includes Belchertown and Granby. In addition to young people, student loan debt is increasingly affecting parents and grandparents who have cosigned those loans. Across the country, total student debt hit $1.5 trillion last year.

“It really has become a poison for our entire economy,” Lesser said.

■Some of the other findings of the analysis, which relied on federal data:

■Between 2007 and 2017, student loan debt doubled in the commonwealth.

■In 2018 alone, student loan debt increased by $1 billion.

■Around 100,000 borrowers in Massachusetts are delinquent on their student loans.

■A fifth of all student loan borrowers in the state live in rural communities.

Lesser’s bill would create a student loan ombudsman position in the attorney general’s office who would answer questions and field complaints related to student loan servicers. It would also implement a new licensing requirement for student loan servicers to operate in the state. That license could be revoked if those servicers weren’t following the law or ethical practices.

Lesser pointed to several other states that have passed similar legislation, including Connecticut. 

Such efforts come as the Trump administration has scaled back student borrower protections, including state-level efforts to regulate student loan servicers. The administration has supported a lawsuit that the Student Loan Servicing Alliance, a trade group, filed after Washington, D.C. implemented its own student loan ombudsman position and licensing requirements.

That deregulatory agenda led Frotman to resign from the Consumer Financial Protection Bureau, creating the Student Borrower Protection Center together with former coworkers from the bureau.

“There’s no real oversight of these servicers,” Lesser said, pointing to the fact that you need a license to do everything from selling a car to cutting hair in the state. Licensing requirements and an ombudsman to investigate complaints, he said, would counteract the “complete gutting” of consumer protections at the federal level.

As student debt continues to skyrocket across the country, other efforts are also afoot to limit the amount of debt Americans have to take on in the first place. 

At the federal level, some politicians have floated proposals for tuition-free and debt-free education at public colleges and universities. In Massachusetts, state Sen. Jo Comerford, D-Northampton, is currently the lead sponsor of The Cherish Act, which would establish that the state fund public higher education at no less than its fiscal 2001 per-student funding level, adjusted for inflation, and freeze tuition and fees for five years. 

Lesser, a co-sponsor of that bill, told the Gazette he endorses the general concept of tuition-free public higher education, though he said he would have to know the details of any particular bill before throwing his support behind it. He said there are various versions of bills floating around the Legislature that would seek to tackle the issue of tuition and fees in some way, mentioning one of his own bills that would make community colleges tuition-free.

Dusty Christensen can be reached at dchristensen@gazettenet.com.

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