U-S Senator Dick Durbin and fellow Democrats Elizabeth Warren and Jack Reed are pushing legislation they say will protect college students from college loan debt and defaults. Student loan debt is now the largest household debt after mortgages, even outpacing credit cards. Durbin says nearly half of student loan defaults come from loans given to students attending for profit colleges, partly because the degrees are often not worth very much. Durbin wants to force colleges with high student default rates to pay the government back some of that money.
"If we say to students and families across America oh if you go to one of these colleges you can borrow money from the federal government, it's an implicit endorsement by the federal government of the worthiness of that institution. And I think we have got to step up."
The legislative package also seeks to prevent a lifetime of student debt by allowing student loan debt to come under bankruptcy filings and requiring colleges and universities to direct students to the lowest cost student loan options. Durbin acknowledges Democrats have been making overtures for Republican support on the proposals without much success. Average student loan debt tops $29,000 at the end of college.
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