House Bill Resolution

HOUSE RESOLUTION (HR) 9330

Federal Loan Debt Forgiveness Act

14 MARCH 2014

Elvis Ruiz, (I) Texas

Ana Marinez, (I) Texas

Amy Batiste, (I) Louisiana

Julio Garcia, (I) Texas

Tom Griffy, (R) Tennessee

Thesis Statement

The purpose of Federal Student Loans is to facilitate the entrance to post-secondary institution to those that do not have the financial means. Since the institution of federal loans, the financial burden to those that benefit from them has been cause of discussion. In this proposal, we will talk about the history of student loans, the impact of student loans, the policy and administration associated with student loans, the unintended consequences of student loans, and a proposed resolution to student loan issues that have cause burden to the American economy.

Historical Points and Initiatives

The Federal Student Loan programs were established in the mid-twentieth century to increase the supply of skilled labor, promote economic and technological development, and increase socioeconomic mobility (Simkovic, 2013). The origins of federal student lending for higher education can be traced to the National Defense Education Act of 1958 (Zuckerman, 2012), followed by the Higher Education Act of 1965. Since the inception of the federal student loan program, access to higher education has been afforded to students representing a broad spectrum of socioeconomic backgrounds (Foster, 2007). The intent of the loan program was to alleviate a shortage of trained workers through an investment in human capital.

Economic benefits of higher education include increases in wages, tax revenues and labor productivity reduction and a reduction of unemployment and its burden on public services (Mohrman, 1987). However, the increased access to higher education has also introduced to Americans the problems that accompany the burden of student loan debt. Two-thirds of college graduates have student loan debt (Kesterman, 2006). After graduating, some loan...