February 18, 2016 02:54 PM UTC

Student Loans: This Is What Bad Press Looks Like

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• by: Colorado Pols

KDVR FOX 31 reported last night on the death in the Republican-controlled Senate State Affairs committee yesterday of Senate Bill 16-043, a bill to increase disclosure of terms for private student loans:

The facts haven’t changed: The average college student now graduates with nearly $30,000 in debt. In Colorado, residents collectively account for more than $40 billion in student loans…

“I am $100,000 in debt,” Shannon Leaseu said. “I’ve had to sell my house and my furniture because my house and my student loan bill was as much as my mortgage.”

Leaseu was one of several students who testified in front of the State Affairs Committee in favor of a bill that would require private lenders to more fully disclose what students will owe after they graduate.

“This is the know before you owe bill,” State Sen. Morgan Carroll said. “The student debt crisis is impacting everybody regardless of party.”

The Aurora Sentinel’s Quincy Snowdon has more on what the bill would have done:

Senate Bill 43 would have bolstered protections for students taking out private loans by requiring lenders to disclose interest rates, penalty fees, payment options, cancellation procedures, how to qualify for federal loans and the eventual total amount of the loan, including interest. The bill also would have barred lenders from providing gifts to both public and private colleges and prohibits lenders from charging students who choose to prepay their loans.

Pretty straightforward, right? Unfortunately, as FOX 31 continued, the GOP-held Senate’s “kill committee” wasn’t interested:

Only one group spoke in opposition to the legislation during the hearing, the Colorado Bankers Association.

“Private lenders take on an additional risk that government lenders do not. Government student loans can be excused in bankruptcy, private loans cannot,” said Jenifer Waller, senior vice president with the Colorado Bankers Association.

That testimony was apparently all that was needed to kill the legislation, with the committee voting against the law on a party-line vote. [Pols emphasis]

In addition to getting her testimony dyslexically backward, the Colorado Bankers Association lobbyist who was the sole witness against this bill was not being entirely truthful. Under the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, most “private” student loans were reclassified to make them non-dischargeable in bankruptcy just like federal loans. Borrowers must in either case prove that repayment would cause an “undue hardship.” Prior to bankruptcy “reform,” private loans were more easily dischargeable.

But we digress: none of that would have even mattered to the GOP’s “kill committee.”

Out-of-control student debt is an enormous crisis affecting millions of Americans. It’s an underreported issue with great importance to the pocketbooks of individuals and families across Colorado. Prosecuted correctly, the political value of the issue could be decisive in a close election–more likely with each passing year as more and more Americans fall into the trap.

When that happens, if you value your career you won’t want to be the one siding with the lenders.