HR0688 101ST GENERAL ASSEMBLY

HR0688 LRB101 18597 MST 68052 r

HOUSE RESOLUTION

WHEREAS, According to the Federal Reserve, 54% of Americans who went to college took on some form of debt in order to do so; and

WHEREAS, Over 45 million people in the United States collectively owe more than $1.5 trillion in student loan debt, making it the second highest form of consumer debt, behind only home mortgages, and higher than credit card debt and auto loan debt; and

WHEREAS, Student loans have a higher delinquency rate than credit cards, auto loans, and mortgages; the delinquency rate (90 days or more overdue) for student loans is 10.85%; comparatively, the delinquency rate for auto loans is 4.69%, and the delinquency rate for credit cards is 8.32%; and

WHEREAS, Over 1.5 million student loan borrowers in the State of Illinois have a collective balance of $49 billion in student loans, with a student loan delinquency rate (90+ days delinquent) of 11.4%; and

WHEREAS, Student loan debt has caused great division between Americans; the average debt for African American bachelor's degree recipients was $34,000, compared to $30,000 for white bachelor's recipients and just under $25,000 for Hispanic and Asian bachelor's recipients; and

WHEREAS, African American students who complete a bachelor's degree are more likely to struggle to repay their loans, and 12 years later, the typical African American student who entered college in 2003 and who completed a bachelor's degree owed 114% of what they originally borrowed, compared to 47% for white graduates; additionally, 49% of African American students who borrowed for their undergraduate education defaulted on a federal student loan, representing the highest default of all borrowers; and

WHEREAS, Student loan debt has created a clear divide among all gendered people; for example, women hold nearly two-thirds of the outstanding student debt in the United States, almost $929 billion as of early 2019 according to studies; the burden of student debt is compounded by existing and intersecting inequalities, women working full time with college degrees make 26% less than their male counterparts; and

WHEREAS, One year after graduating, female college graduates working full time are paid 18% less than their male peers; by four years after graduation, that gap widens to 20%; and

WHEREAS, A 2019 Federal Reserve study found that student loan debt is linked to over 20% of the decline in homeownership, which is recognized as one of the most important ways to build wealth; homeownership has returned to 50-year lows, and the African American homeownership rate in 2019 was as low as it was when the Fair Housing Act was passed in 1968; and

WHEREAS, Research from the National Association of Realtors revealed that 61% of millennials said they have delayed buying a house because of student loan debt, with the average student loan borrower delaying the purchase of their first home by an average of seven years; and

WHEREAS, Student loan servicers are a critical link in determining whether borrowers will have a pathway towards paying off their debt or be continually rolled into one unaffordable payment after another; and

WHEREAS, Without strong federal and state guidelines, servicers have engaged in a range of abusive practices that include misapplying student loan payments in ways which maximize fees to the servicer and placing borrowers into plans that delay the debt rather than repay it; and

WHEREAS, The U.S. Department of Education has recently signaled that it is willing to make it easier for servicers of federal student loan debt to operate with less oversight and fewer protections for students by rolling back existing federal guidance and by seeking to thwart states' rights to protect students in their own states against student loan abuses; and

WHEREAS, Several states have already begun to take legislative and enforcement actions related to unfair and deceptive practices of student loan servicers; therefore, be it

RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE ONE HUNDRED FIRST GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we urge the United States Congress to recognize outstanding student debt as a crisis for Americans seeking an education that endangers the well-being of Americans and to work to develop and enact legislation that will forgive student loans for all current student loan borrowers and prevent future students from shouldering an insurmountable burden of debt; and be it further

RESOLVED, That suitable copies of this resolution be delivered to the President of the United States, the U.S. Senate Majority Leader, the U.S. Senate Minority Leader, the U.S. Speaker of the House, the U.S. House of Representatives Minority Leader, and all members of the Illinois Congressional Delegation.