Worcester Business Journal

wbjournal.com | July 26, 2021 | Worcester Business Journal 15 e second piece of the legislation went into effect on July 1, establishing a student loan ombudsman, under the Mass. Attorney General's Office. e person filling the role is Arwen oman, deputy director of Attorney General Maura Healey's insurance and financial services division. As ombudsman, oman will be tasked with resolving student complaints, educating borrowers, monitoring student loan servicers, and submitting annual reports on borrower complaints and trends. In a July announcement naming oman, Healey's office said oman will complement the Student Loan Assistance Unit, established in 2015. "My office is on the frontlines of this $1.7-trillion crisis, fighting on behalf of student borrowers in Massachusetts, and taking on a student loan system that is fundamentally broken and devastating to countless Americans," Healey said in a statement announcing oman's appointment. "e establishment of this ombudsman position will be critical in our ongoing work to help students and families invest in their future and get the relief they deserve." Still, Higgins said, much work needs to be done, particularly as the economy continues to recover from the coronavirus pandemic. "People's individual lives have not gotten back to where they were prior to Covid," she said. Higgins is supporting a bill, the Senate version of which is sponsored by Sen. Ryan Fattman (R-Uxbridge), to prohibit denying professional and occupational certificates and licenses because a person has defaulted on their student loans. Higgins said such a bill is common sense, and she's hopeful it will pass. "We shouldn't be punishing employees," Higgins said. "It would be a game changer." Separately, Higgins is sponsoring a bill to aim to make public higher education free by taxing higher education endowments exceeding $1 billion. She doesn't buy the argument making public college free or forgiving student loans would be bad for the economy, arguing putting money back into consumers' pockets will allow them to make basic purchases, like buying a car. Pedraja, head of QCC, concurred. "We see education as a luxury or as a commodity or a privilege," Pedraja said. "e way I see it, education is a basic human right, and it is necessary for the economy to advance and for us to have a trained workforce." EDITOR'S NOTE: Monica Benevides, the author of this article, holds federal student loan debt eligible for federal forgiveness under the proposed plan. Student debt forgiveness bad for the economy In what way would federal student debt relief most impact the economy? Quinsigamond Community College announced in June it would eliminate student debt for those who matriculated during the coronavirus, using funding from the Federal Higher Education Emergency Relief Fund. The school said at the time it plans to utilize more than $2.5 million to assist 1,687 students, with the average debt forgiveness totaling $1,525 per student. On the national level, President Joe Biden has been asked to cancel federal student loan debt for everyone, up to $50,000. When polled online, the plurality of WBJ readers said forgiving student loan debt would be a negative for the overall economy. F L AS H P O L L State governments would decrease taxpayer support to keep tuition costs in check. 5% Entrepreneurs could start and invest in businesses. The negative impact on the federal budget would be bad for the economy. 32% Consumers would have more disposable income. 22% I N N O V A T I O N & H I G H E R E D U C A T I O N F O C U S W held debt increased from 58% to 73%. e Budget and Policy Center report partially attributed the rise to a 32% cut in state funding for higher education in the last 20 years. Although state support decreased about $3,000 per student by 2018, tuition and fees rose $4,600. Federal solutions Federal student loan repayments and interest accrual are on pause because of the coronavirus pandemic, a relief set to expire on Sept. 30. Although President Joe Biden said on the campaign trail he supported forgiving $10,000 in student debt per person, he has not yet followed through with that goal, although he tasked the Department of Education in April to explore his legal authority to erase debt through executive action. is lack of action stands in stark contrast to a push by some Congressional Democrats, including Sen. Elizabeth Warren (D-MA), campaigning for Biden to forgive $50,000 of student debt per borrower, an effort working itself toward a fever pitch as the clock ticks toward October. Some 92.6% of student debt is held by the federal government, according to EducationData.org. Moreover, student loan debt challenges are greater for students of color, a trend with significant implications for the racial wealth gap. A 2019 report from the Heller School for Social Policy and Management at Brandeis University in Waltham found 49% of Black borrowers and one-third of Latinx borrowers defaulted on their student loans, compared to 20% of white borrowers. e same report found 20 years aer starting college, student debt held by white borrowers was reduced by 94%. In contrast, Black borrowers still owed 95% of their debt. Massachusetts solutions Efforts are underway from Central Massachusetts legislators on both sides of the political aisle to lessen the burden for borrowers. Last year, Gov. Charlie Baker signed into law the Student Loan Borrower Bill of Rights, a piece of legislation sponsored in part by State Rep. Natalie Higgins (D-Leominster). e law, Higgins said, took a two-fold approach to helping and protecting borrowers navigate their student debt. e first part of the law aims to hold student loan servicers accountable by requiring they be licensed and adhere to a code of conduct. e law allows for the state to take action against student loan servicers breaking rules or harming borrowers. While the law doesn't make student loans go away, Higgins, an advocate for total student loan forgiveness, said it provides oversight and repercussions for the worst actors. MassLive.com has more readers than BostonGlobe.com in 2021 Partner with the agency that puts your brand in front of more potential customers than anyone else in Massachusetts. IMAGINE MORE AWARENESS | LEADS | CONVERSIONS | CUSTOMERS *According to Comscore unique visitor data for 2021 4% Disadvantaged communities would be relieved of excessive debt. 9% Colleges would be less inclined to curtail rising costs. 28%

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