During the 2016 election cycle, it seemed like everyone was talking about student loans and college affordability. That’s not surprising since the student loan crisis is affecting so many Americans. Currently, around 44 million Americans owe about $1.3 trillion in student loan debt, with the average borrower graduating with more than $28,000 in debt.
We we were interested in taking a closer look at the politics of student debt and what they mean for the future of student loan and college affordability policies. To do this, earlier this year LendEdu studied all 535 Congressional Districts and looked at the views and votes of U.S. Senate and House of Representatives members on student loan-related issues, as well as the student loan debt statistics in those Congressional Districts.
Here’s what we found:
Democratic States Have More Debt, But Republican States Have More Defaults
We found that states that had two Democratic Senators had around 25% in more student loan debt then states with two Republican Senators.
We also found that despite having less debt, borrowers who lived in states held by Republican Senators were much more likely to default on their student loans. In fact, they were 55% more likely to default. This means that even though borrowers in Republican held states are able to graduate with less student loan debt, they struggle to pay those loans more often.
Support for Student Loan and College Affordability Broke Down Across Party Lines
For the purposes of our analysis, we looked at six recent pieces of legislation that supported either student loan repayment or college affordability initiatives to see how much support they had from Republican senators and congressmen and Democratic senators and congressmen. (See below)
We discovered that Democratic senators supported on average 4.07 of the six initiatives, whereas Republican senators supported just 1.8 of the six initiatives on average. In the House of Representatives, Democratic representatives supported 4.77 of the six initiatives, whereas Republican representatives supported just 1.7 of the six.
This may be explained by divisions between the parties around college affordability policies. It could be said that Democrats are more likely to believe that the student loan and college affordability crisis requires government intervention. Meanwhile Republicans are more likely to want to look to the free market to find a solution to the problem.
Republicans Were More Likely to Support Lowering Interest Rates Over Other Initiatives
While there is partisan disagreement over ways to solve the student loan crisis, there are some areas where Democrats and Republicans are more likely to agree. While 100% of Democratic senators and 99% of Democratic representatives supported an initiative to lower interest rates on student loans, 88% of Republican senators and 79% of Republican representatives supported it as well.
That level of support across the aisle wasn’t seen on the five other issues we looked at.
For example, around 85% of Democratic senators and 97% of Democratic representative supported expanding the Pell Grant program while just 18% of Republican senators and 22% of Republican representative supported that initiative.
Just around 2% of Republican senators and representatives supported a proposal to allow borrowers to refinance their federal loans at current lower rates, whereas 85% of Democratic senators and 97% of Democratic representatives supported this initiative. Today, refinancing is only available in the private market and data suggests that about 57% of borrowers are denied.