Legislature considers key student loan bill as more than one in five New Mexicans are severely delinquent on their student loans
WASHINGTON, D.C. – A new analysis of government data demonstrates the gravity of the student debt crisis in New Mexico. The analyzed data, released by the Student Borrower Protection Center (SBPC), American Federation of Teachers New Mexico (AFT-NM), and the New Mexico Center on Law and Poverty, show that more than one in five New Mexico consumers are now delinquent on their student loan debt.
New Mexico’s House is currently considering HB 172 which sets out to oversee and crack down on illegal practices by student loan companies.
“Debt stretching for decades after the completion of study is a real crisis impacting New Mexico students and is reason we need legislation like HB 172,” said Stephanie Ly, President of AFT New Mexico. “AFT New Mexico’s goal is to promote increased transparency within the student loan industry and provide mechanisms for relief should borrowers have concerns about their loans. We’ve been fortunate to have champions like Rep. Roybal Caballero carry this bill for several years now, and appreciate Rep. Hochman-Vigil’s joining this fight during her first legislative session.”
“College should lead to opportunity, not financial ruin,” said Lindsay Cutler, attorney with the New Mexico Center on Law and Poverty. “The analysis makes a clear and compelling case that New Mexico lawmakers need to protect student loan borrowers from illegal industry practices.”
Student loan debt in New Mexico has skyrocketed over 129 percent in the last decade.
The close look at data made available by federal sources shows the student debt crisis growing for borrowers across the state, including:
- New Mexico has the second highest student loan default rate in the country;
- New Mexicans now owe more than $6.8 billion in student debt;
- More than 1 out of every 5 student loan borrowers in New Mexico are severely delinquent on their debt;
- New Mexico ranks eighth in the country of states with the highest percentage of delinquent debt, and eleventh in percent of borrowers with delinquent debt; and
- Nearly a quarter of all borrowers living in rural New Mexico are severely delinquent.
“As student loan borrowers in New Mexico suffer each day from the burden of their debt, state leaders must take action,” said Seth Frotman, Executive Director for the Student Borrower Protection Center. “The federal government has walked away from this crisis, casting millions of New Mexicans aside in the process. The borrowers across New Mexico cannot wait any longer for predatory student loan companies to be held accountable.”
As part of HB 172, sponsored by Rep. Roybal Caballero and Rep. Hochman-Vigil, student loan servicers would be required to be licensed and subject to oversight by the New Mexico Financial Institutions Division. These proposals would help ensure that student loan servicers do not mislead borrowers, misapply payments, or provide credit reporting agencies with inaccurate information.
HB 172 is particularly important because the federal government continues to ignore mounting evidence of the nation’s growing student debt crisis. Not only has the federal government halted efforts to protect student loan borrowers, it is turning a blind eye to predatory practices and enabling bad actors to harm borrowers.
SBPC HELPING STATES FIGHT FOR 44 MILLION AMERICANS WITH STUDENT DEBT
In the face of continuing systemic abuses across the student loan industry, state governments are taking action to expand protections for student loan borrowers and halt illegal practices by predatory companies. Last year, the Student Borrower Protection Center launched States for Student Borrower Protection, an initiative that highlights the student debt crisis in states across the country, and is designed to support the leaders in and out of government working to end this crisis through state level actions. Today’s release offers further evidence that state action is urgently needed.
The analysis is part of an ongoing series of original research, projects, and campaigns by SBPC designed to help student loan borrowers by shedding light on the crisis and empower advocates.
About the Student Borrower Protection Center (SBPC): The Student Borrower Protection Center (www.protectborrowers.org) is a nonprofit organization solely focused on alleviating the burden of student debt for millions of Americans. SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students. Led by the team of former federal regulators that directed oversight of the student loan market at the Consumer Financial Protection Bureau, SBPC exposes harmful and illegal practices in the student loan industry, drives impact litigation, advocates on behalf of student loan borrowers in Washington and in state capitals, and promotes progressive policy change. SBPC accomplishes these goals by partnering with leaders at all levels of government and throughout the nonprofit sector.
About the American Federation of Teachers – New Mexico (AFT-NM): The American Federation of Teachers is a union of professionals that champions fairness; democracy; economic opportunity; and high-quality public education, healthcare and public services for our students, their families and our communities. We are committed to advancing these principles through community engagement, organizing, collective bargaining and political activism, and especially through the work our members do.
About New Mexico Center on Law and Poverty (NMCLP): The New Mexico Center on Law and Poverty is dedicated to advancing economic and social justice through education, advocacy, and litigation. We work with low-income New Mexicans to improve living conditions, increase opportunities, and protect the rights of people living in poverty.