The District has a number of people who are cool, smart and well-connected — and deeply in student debt.
But if D.C. Council member Elissa Silverman has her way, these productive residents will be able to keep this financial obligation under control.
On Feb. 5, Silverman (I-At Large) introduced the Student Loan Authority Establishment Act of 2019 that would create an independent agency to issue new low-interest rate student loans and refinance existing student loan debt for residents and students attending D.C. colleges and universities.
The legislation allows for student loans, parental loans and graduate student loans that would be covered by a robust income-based repayment system, a public service loan forgiveness program and deferred payment after graduation.
Silverman’s legislation would let the student loan authority operate similarly to the D.C. Housing Finance Agency by issuing tax-exempt bonds to fund both the origination and refinancing of the loans that would not affect the District’s ability to borrow funds for other issues or create a new liability.
The council member’s bill comes at a time when nationally students owe more than $1.5 trillion in educational loans, according to a number of studies on the subject. In the District, the average debt for the Class of 2017, for example, is $30,000 and nearly 10 percent of all city borrowers owe more than $100,000.
Given these staggering statistics, Silverman knew she needed to make sure that student loan borrowers have more options available to them.
“Lowering student debt not only makes higher education more affordable, but it also helps our residents save and work toward other life goals, such as renting or buying a home,” she said.
With the exception of the University of the District of Columbia, all of the city’s colleges and universities are private and thereby much more expensive than public institutions.
Silverman introduced the bill in October but Council Period 22 ended on Dec. 31 without the bill being considered. Nevertheless, fellow Council members Trayon White (D-Ward 8), Anita Bonds (D-At Large), David Grosso (I-At Large), Robert White (D-At Large), Mary Cheh (D-Ward 3), Vincent Gray (D-Ward 7), Jack Evans (D-Ward 2) and Brianne Nadeau (D-Ward 1) signed onto the bill in October and continue to support it.
Silverman’s bill is currently under council review.
Marcus Goodwin, president of the DC Young Democrats who ran unsuccessfully for an at-large seat on the council last year, said he fully supports Silverman’s bill.
“Student debt hurts the ability of people to buy property, make investments, further their education and start a family,” said Goodwin, who works as a real estate and economic development professional and volunteers at the Adams Morgan Youth Leadership Academy, where he teaches financial literacy and career preparedness to high schoolers. “Those who want to advance in their life are hindered by student debt and it may stifle their ambition to move forward in their career.”
Goodwin noted that it is mainly student loan debt acquired during undergraduate years that adversely affects people. He said many young people don’t make enough money to pay back the debt when they began to work after undergraduate school.
In addition, he said the District “is an expensive place to live,” and that serves as a barrier to paying back those loans.
Jeremiah Lowery, a well-known progressive activist in the District, agreed with Goodwin on Silverman’s bill.
“It’s a good start,” said Lowery, who also ran for an at-large seat on the council in 2018, said. “The end goal is debt-free college. I think Elissa Silverman’s bill will be good for residents across the city but especially those who live east of the [Anacostia] River. If the bill passes and is signed into law, there needs to be extensive outreach, particularly east of the River, to let residents know what this means for them.”
Lowery said many minority students take out different loans without knowing fully the payback requirements because they are focused on getting a degree.
“They lose track of the loans they are supposed to pay back and things get out of hand,” he said. “I think this bill will prevent that from happening.”