The dramatic impact of student loan debt was a primary concern of panelists at the conference.
MECEP Associate Director Jody Harris said student loan debt in Maine tops $6 billion, which she said represents a loss of 6,000 jobs and $750 million in consumer spending.
“It also prevents Mainers from buying a home and putting down roots in their communities. It prevents Mainers from saving for retirement and being able to retire with security and dignity,” Harris said, explaining that a third of student loan holders in Maine skip food and clothing purchases, 42 percent of Maine college borrowers delay buying a home, and more than half put off a car purchase in order to make loan payments. “We know Maine people struggle mightily to pay their student loan,” she said.
Harris blamed an “explosion” of for-profit colleges, as opposed to public institutions, for ballooning student loan debt in Maine by targeting women, veterans, people of color, and students from low-income homes who are less able to afford loan repayments. She added that these students borrow at higher amounts, are half as likely to graduate and, if they finish, often find their program did not provide adequate credentials to find work in their chosen field.
She said private service companies contracted by the federal government to manage and process student loan programs also heighten the problem of student loan debt through deceitful or abusive practices. She highlighted Navient, the nation’s largest student loan company, as an example of one of the worst abusers; in January 2017 the CFPB sued the company, alleging “illegal practices” that made paying back student loans more difficult and expensive.
“These companies, in the best of light, are not doing their jobs, and the worst case, they’re cheating people for profit,” Harris said.