Honolulu City Council Hopes to Reduce Federal Student Loan Debt
The Honolulu City Council is urging the federal government to cancel outstanding federal student loan debt up to $10,000 per person.
According to the Federal Reserve Bank of St. Louis, federal student loan debt in this country surpassed $1.7 trillion last year. Nearly 8% of Hawaiʻi borrowers have a federal student loan balance of $100,000 or more.
The Higher Education Act of 1965 authorizes the president of the United States and the U.S. Secretary of Education to cancel or reduce student loan debt owed to the U.S. government.
Honolulu City Council Resolution 21-155 states that reducing student loan debt will boost the economy. The measure argues that students could stimulate the economy by buying houses or starting small businesses if they have a smaller debt to worry about.
It also states that smaller debts will improve students' physical health by reducing stress and depression. The immediate threat of financial ruin can also prevent students from getting proper health care.
City councils in several other locations, including Washington D.C., have also urged the federal government to cancel federal student loan debt.
The council’s Budget Committee unanimously approved the measure, and it will go in front of the full Honolulu City Council next month.