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Student loans are “ridiculous,” according to Rep. Alexandria Ocasio-Cortez.
Here’s what you need to know.
In a speech on the House floor, Ocasio-Cortez (D-NY) rallied against “crushing” student loan debt and called on President Joe Biden to cancel student loans. “This is getting ridiculous,” Ocasio-Cortez said, referring to student loans, at the beginning of her speech. “This is getting ridiculous.” Here are some key highlights and fact checks from her speech:
1. 17-year-olds are able to borrow “hundreds of thousands of dollars of debt.”
Ocasio-Cortez, who is a first generation college student on her mother’s side, lamented how teenagers are able to borrow hundreds of thousands of dollars to attend college. It’s a backward practice, she said.
Fact Check: True. Our education system lets young people borrow substantial student loan debt often without a full understanding of student loan repayment, future earnings potential, or career prospects. As a result, many student loan borrowers are saddled with student loan debt for years, if not decades. (How to apply for limited student loan forgiveness).
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2. There is $1.7 trillion of student loan debt
According to the latest student loan statistics, 45 million borrowers collectively owe $1.7 trillion of student loans. (Here’s who qualifies for student loan forgiveness right now).
Fact Check: True.
3. I didn’t get a graduate degree because I knew it would drown me in debt.
Ocasio-Cortez, who says at age 32 she has more than $17,000 of student loan debt, chose not to get a graduate degree due to the cost and expected student loan debt.
Fact Check: Ocasio-Cortez isn’t alone. High school students must decide whether to attend a community college, state college, private college or no college at all — and the cost can play a major factor. Similarly, college students with significant student loan debt fear assuming more student loans to earn a graduate degree. (Here’s how to qualify for automatic student loan cancellation).
4. “65% of all jobs in this country require an education beyond high school.”
Since most employers require a college degree, students have little choice but to attend college, borrow student loans, and spend years in student loan repayment.
Fact Check: Not every job requires a college degree, even if the employer says it does. More companies are bucking the trend and aren’t requiring a college degree. Tech companies like Google GOOG and Facebook have said the same. If more companies won’t require a college degree for certain roles, then more students wouldn’t be required to attend expensive colleges to get hired. (How to apply for student loan forgiveness during the Biden administration).
5. Hundreds of thousands of borrowers owe more on their student loans than they did when they borrowed.
Compound interest can be expensive, especially when it comes to student loans. Student loan borrowers got temporary student loan forbearance due to the Covid-19 pandemic. As a result, federal student loan borrowers got $110 billion of student loan cancellation. With less than two months until the expiration of this student loan relief, federal student loan borrowers have a once-in-a-lifetime opportunity to pay off student loan balances with no new interest accrual. This means that after paying off prior interest, every dollar of their student loan payment will directly reduce their principal balance. (These borrowers don’t qualify for limited student loan forgiveness).
Fact check: True.
6. “Student loans are for the privileged” is “a ridiculous assertion.”
Ocasio-Cortez said she is looking forward to the Biden administration “no longer advancing the false narrative that student loan debt is for the privileged. What a ridiculous assertion. Do we really think that a billionaire’s child is taking student loans? Come on!”
Fact check: False. The Biden administration hasn’t advanced this narrative. There have been debates regarding student loan cancellation, and whether wide-scale student loan cancellation would disproportionately benefit wealthier student loan borrowers. However, the president or his administration hasn’t claimed that student loans are only for “privileged” student loan borrowers.
With student loan relief expiring January 31, 2022, make sure you know how to tackle student loan debt. Here are some popular ways to pay off student loans and save money:
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