AFT - American Federation of Teachers

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AFT Resolutions


WHEREAS, student loan debt in the United States now totals more than $1 trillion, surpassing credit card debt; and

WHEREAS, the overall growth in student debt is troubling, and the growth of private student loans is even more concerning; and

WHEREAS, federal student loans have fixed interest rates and offer an array of consumer protections and favorable terms. Private student loans, which resemble credit cards rather than financial aid, often have uncapped variable interest rates (which have spiked as high as 18 percent in recent years), hefty origination fees, and few, if any, consumer protections, and they are ineligible for federal forgiveness, cancellation, bankruptcy and repayment programs; and

WHEREAS, student loans should work as a safety net that allows people to get an education with the assurance that, should their finances be strained by layoffs, accidents or other unforeseen life events, they will be protected; and

WHEREAS, two-thirds of private loan borrowers, including those who took out both private and federal loans, said that they did not understand the major differences between private and federal options, and as a result, a majority of undergraduate students who borrowed private student loans in 2007–2008 did so without first exhausting their eligibility for safer, cheaper federal loans; and

WHEREAS, according to the Institute for College Access and Success, African-American undergraduates are now the most likely to take out private loans—the percentage of African-American undergraduates who took out private loans quadrupled between 2003–2004 and 2007–2008, from 4 percent to 17 percent; and

WHEREAS, the Obama administration has taken important steps to help students manage the skyrocketing costs of getting a degree by introducing plans to cap monthly payments, provide greater access to loan repayment programs, aid in the consolidation of student loans, and provide students with more information about financial aid before they go into debt; and

WHEREAS, the Consumer Financial Protection Bureau, created specifically to look out for the interests of consumers, has undertaken important and necessary work to help students better understand the type and amount of financial aid they qualify for so that they know how much they'll owe before choosing a college, and is assisting all borrowers experiencing problems taking out a private student loan, repaying their private student loan, or managing a student loan that has gone into default and may have been referred to a debt collector:

RESOLVED, that the American Federation of Teachers will urge Congress to require private lenders to ensure students' enrollment status and attendance cost before issuing a loan, and to require schools to certify private loans and ensure that students are fully aware of their education financing options before taking on unnecessary debt to pay for school; and

RESOLVED, that the American Federation of Teachers will support legislation that amends federal bankruptcy code to remove qualified educational loans as an exception to discharge from bankruptcy.