The steep increase in college tuition and student debt over the past decade has led our country to engage in a serious debate about the need to reduce college costs and student borrowing. Yet many misconceptions remain about the scope or magnitude of the problem that student debt poses to our national economy and student debtors’ financial security.1,2 More than 44 million Americans, or nearly 1 in 5 adults, now carry student debt. That share is even higher among millennials, one-third of whom have student loans.3 And the burden of carrying student debt isn’t borne equally— today more than half of African American households under age 40 have student loan debt.4 Student debt has negative impacts for many borrowers; studies show that student debtors have less savings, more difficulty purchasing homes, and less retirement savings.5 However, student debt is particularly damaging for individuals who struggle to repay their loans: borrowers who are seriously delinquent on their payments or who default on their loans. Delinquent borrowers are saddled with fees, penalties, and rapidly-accumulating interest; borrowers who default on their loans face ruined credit and a debt often several times their original loan balance. Even worse, they cannot even turn to bankruptcy for relief from their loans, unlike most other kinds of debt, and face a debt collection process that is often punitive and draconian
