Nearly three million New Yorkers currently owe more than $86 billion in educational loans. The New York Assembly held a hearing to see if legislative action is needed to help tackle this rising debt problem on Tuesday.
“There is no white knight riding in to save New Yorkers,” Seth Frotman, the former Student Loan Ombudsman at the Consumer Financial Protection Bureau, said.
Frotman resigned from his federal position a few months ago in protest of the White House’s stance on student loan debt. He came before two Assembly committees on Tuesday to say that rising student loan debt is a national crisis that needs to be addressed.
“New Yorkers are hurting. The student loan borrowers in this state are teachers, nurses, service members and veterans, young and old, urban and rural and black and white.”
Americans owe more than $1.5 trillion in student loan debt. This is more than all credit cards combined or auto loans combined. And out of those 8.5 million borrowers are in default and can’t make payments. This is starting to take its toll on the economy.
“It prevents them from getting into housing, to rent apartments, to buy a first home and to be able to participate in our modern economy without having this enormous burden,” Assemblyman Kenneth Zebrowski (D-New City) said.
Assembly members today pointed to a lack of inaction on the federal side, as a reason to come together to talk about legislative ways they can combat student debt. For example, much of the discussion was over ways the state can have more oversight on the student loan industry, to make sure no mistakes are made and to make it easier if students have questions about the process.
“Services often forget to correctly apply or allocate payments to borrowers accounts which of course is the most fundamental task of the servicer,” Maria Vullo, the Superintendent of the Department of Financial Services, said.
Any action would have to be taken up this next legislative year.
The Assembly’s committees on banks and consumer affairs and protection held the hearing, but out of the close to fifty members of both committees, only two members were present for the majority of the hearing.