Dear Friends,
Last week, Betsy DeVos, the Secretary of Education, proposed creating a new federal agency to better manage federal student loans. Many Texans, including myself, are concerned that the Department is not equipped to effectively handle our nation's massive student debt.
The federal student loan debt has grown to over $1.5 trillion. More clearly, the Department of Education is handling a larger debt portfolio than any private institution including Bank of America, Wells Fargo, Chase, and many other commercial banks. This price tag also exceeds the total auto loan and credit card debt for the nation. Most concerning is that nearly 11 million students have loans that are delinquent or in default.
The student loan debt crisis will only continue to get worse. The Department of Education's student loan portfolio has grown by an average of 8 eight percent annually since 2010 and it's not slowing down. This student debt crisis isn't a faraway problem; it is a crisis that hits close to home. I have heard from many of you about your personal struggles with student loan debt and the impact it is having on your families. More than half of Texas students have student debt, and the average Texan's debt is about $26,000. Many Texans are postponing buying homes and starting families because of the negative impact the debt has on their family life.
This problem must be fixed for the good of our youth and our nation. There needs to be greater accountability and transparency for the institutions that are profiting while our students sink deeper into debt. We need to take a hard look at the way our government finances and services these loans - and this includes looking into Secretary DeVos's proposal. Our students must be equipped with the financial literacy skills needed for them to make smart decisions when applying for student loans. Further, we need to emphasize apprenticeship and trade programs that provide secure careers for future generations often with less student debt. This crisis can't simply be forgiven and forgotten. Trust that I am working on your behalf to ensure education is the path to greater prosperity, not financial insecurity.
Sincerely,
Kay Granger