Introduction and summary
Students borrowed approximately $91 billion in federal loans in 2018, bringing the total outstanding loan balance to nearly $1.5 trillion.1 For many, college would not have been possible without such readily available financing, but the burden of debt has become too much. More than 1 million borrowers default every year,2 and millions more are stuck in what feels like an endless cycle of interest payments3 and benefits applications.4 Borrowers of color, in particular, are struggling to repay their debt, exacerbating long-term inequities and causing higher education to be more of a gamble than was promised.5
All of these woes are part of the college affordability crisis, but they are also part of a more arcane problem: The United States’ federal student loan repayment system is broken. This year, however, Congress has a chance to fix it.
The stars seem to have aligned for a long-overdue reauthorization of the Higher Education Act (HEA),6 the country’s primary legislation governing postsecondary education. Senate Education Committee Chairman Lamar Alexander (R-TN), who plans to retire at the end of the current congressional session, will likely be motivated to burnish his legacy by passing the first HEA reauthorization in more than a decade.7