Sensible easing of college debt load

Press Release

Congressman Pete Aguilar's proposed grace period on paying back one kind of student loans is a sensible approach to easing the debt burden on recent college graduates.

Rep. Aguilar, D-San Bernardino, last week introduced House Resolution 5622, which would offer borrowers an optional one-year grace period before they have to start paying back Federal Direct Stafford Loans. As it stands now, the loans have to be paid back starting six months after graduation; Aguilar's bill, which he calls the "Grace Period Alleviation (GPA) Act," would allow borrowers to hold off beginning repayment for 18 months. (Interest on the Stafford loans still would begin accruing at graduation, as it does now, regardless of the grace period.)

We're not talking Bernie Sanders-style free tuition here, just a little optional breathing room for the many college grads who haven't landed full-time work within six months of graduation.

"Failure to Launch," a study by the Georgetown University Center on Education and the Workforce, found just one in three adults in their early 20s working full time, and that seven in 10 graduates of public and nonprofit colleges had student loan debt averaging $28,950.

Aguilar understands the issue firsthand. He says he had more than $30,000 in debt when he graduated from Redlands University.

Outstanding college loans have ballooned to a mind-boggling $1.35 trillion, according to the Federal Reserve. That's an increase of 130 percent from $589 billion in 2007, at the start of the Great Recession. Student loan debt exceeds credit card debt and auto loan debt and is second only to mortgage debt.

Speaking of mortgages, fewer young people have them than in generations past, at least partly because they're already buried under student debt. That in turn hurts the U.S. economy.

HR 5622 also would forgive the extra interest fees that were charged to students who received Stafford loans between July 2012 and July 2014.

Reporter Beau Yarbrough noted that Congress-tracking website GovTrack.us gives HR 5622 only a 1 percent chance of becoming law; only 3 percent of bills made it through between 2013 and 2015, and Aguilar is a member of the minority Democratic Party.

But this is one bill that should make it. It's not earth-shaking, but it could make a big difference to some college grads, and add a little spark to the U.S. economy.

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