TIME Op-Ed: Americans are Drowning in $1.5 Trillion of Student Loan Debt. There's One Easy Way Congress Could Help
Aug 28 2019
Americans are Drowning in $1.5 Trillion of Student Loan Debt. There's One Easy Way Congress Could Help
By Sens. Mark R. Warner (D-VA) and John Thune (R-SD)
Every summer, college graduates around the country don their caps and gowns in celebration of a job well done, with the hopes of using their degrees to propel them into a successful career.
But for many young Americans entering the workplace, that first job will also bring with it the first payment on tens of thousands of dollars of student loan debt — debt that can take them decades to pay off.
While college is certainly not the only path to a good job, the fact is more than half of all jobs paying over $35,000 require a bachelor’s degree or higher — and that number is only expected to grow.
Americans are following the money. Today more than 44 million Americans have outstanding student loan debt, which has become the one of the biggest consumer debt categories. All told, student debt in the U.S. now totals more than $1.5 trillion.
For South Dakotans, more than 109,000 borrowers hold $3.3 billion in total outstanding federal student loan debt, according to recent data from the Department of Education. That averages out to more than $30,000 per borrower. In Virginia, more than 1 million borrowers hold $38 billion in total outstanding debt. Across America, it’s estimated that the average borrower has more than $37,000 in debt, while more than 2 million student loan borrowers owe $100,000 or more — and these figures continue to rise.
As a result of this growing student debt crisis, many borrowers struggle to pay for day-to-day necessities like rent, groceries or car payments. For others, their student debt stands in the way of buying a home, starting a business or pursuing a new career opportunity.
While the federal government already provides some assistance to those who are eligible, much more can be done to help graduates responsibly pay down their student debt and help employers recruit and retain qualified candidates for good-paying jobs.
That is why we introduced the bipartisan Employer Participation in Repayment Act. Employers can already contribute up to $5,250 each year tax free to help cover the education expenses of students who are working while taking classes. Our legislation would expand this benefit to allow employers to provide the same tax-free contributions to their employees who are no longer in school and help them pay down their student loan debt. Right now, borrowers pay taxes on any contributions their employer makes toward their student loans. Our bill would help employees pay down their student debt more quickly and put more of their hard-earned money toward buying a home, starting a business, or saving for the future.
This is an obvious benefit for graduates, but it would also give employers a new tool and benefit option that would help them attract and retain top-level talent. This is a win-win scenario for graduates, for businesses and for the American economy.
We know this bipartisan legislation isn’t a silver bullet. More must be done to bring down the cost of higher education and expand opportunities for those Americans who choose not to go to college. But for the millions of Americans currently saddled with student debt, our bill would begin to ease that burden almost immediately.
Our bill can pass Congress and get the president’s signature this year. With more than one-third of both the House and the Senate signed on as cosponsors and a wide variety of endorsing stakeholder groups, our bill has earned the type of consensus support that’s not easily found in Washington these days. Several major companies have already committed to introducing student loan repayment benefits if Congress steps up and makes this fix. Let’s give employees the chance to take them up on the offer.
By working together in support of this bill, Democrats and Republicans can help give student borrowers some relief and put them on the pathway to success.
CNBC Op-Ed: All the good jobs in America are at risk of going to a handful of cities, but there’s still time to stop it
Jun 12 2019
All the good jobs in America are at risk of going to a handful of cities, but there’s still time to stop it
By Sen. Mark R. Warner
The truth is, the opportunity to earn a good life through hard work is moving out of reach for too many Americans. As someone who has benefited greatly from our free enterprise system as an entrepreneur, I recognize that modern American capitalism just isn’t working for enough people in this country.
Over the last 50 years, globalization, automation and disruptive technologies have both destroyed and created millions of jobs. But the benefits have not been spread evenly. The result is an inequality of opportunity, with new, good-paying jobs increasingly concentrated in a handful of urban centers, available to a small, skilled workforce that does not represent the racial, geographic and socioeconomic diversity of our country.
Workers now face not only historic income inequality but great income insecurity due to the growing threat of their jobs being automated, outsourced or eliminated in the next round of corporate mergers. These problems are only made worse by companies that put short-term profits ahead of long-term growth — prioritizing mergers and acquisitions over investments in their physical and human capital.
Unfortunately, the temptation for policymakers is to treat the symptoms of inequality when what we really need is a new economic model to prepare Americans for work in the 21st century.
Let’s address the issue of income insecurity and recognize that many folks aren’t working one job for their entire career or even one job at a time. We need federal and local government to experiment with industry to develop a portable benefits system to follow workers from job to job and gig to gig.
We also need to think big. We need real bipartisan tax reform that rewards hard work and investments in American workers. Now, if a company buys a new robot to replace its workers, that’s an asset. If the company invests in training its workers, that’s an expense. Let’s fix that. While we’re at it, let’s replicate the success of the R&D tax credit and give companies an incentive to train low- and moderate-income workers to help them climb the economic ladder.
We need to do this if we are serious about closing a skills gap that will only get worse with automation. One recent study found that by the year 2030, up to one-third of American workers will need to retrain or change jobs to keep up with disruptions due to automation and a changing economy. We need to radically change our approach to job training in this country, from investments in community and technical colleges, to apprenticeship programs, to savings accounts that aid in lifelong learning.
The American dream might feel like it’s fading away. But it doesn’t have to be that way. Done right, we can rebalance the economic scales a little more in favor of American workers while nurturing the competitive spirit that built the U.S. economy into the dominant global force it is today.