Comedian and talk show host Hasan Minhaj made Congress members on Capitol Hill laugh Tuesday as he described the serious repercussions facing the nation's 45 million people who have student loan debts.
"This issue is sidelining millions of Americans. People are putting off marriage, kids, homeownership and retirement — especially my generation," Minhaj, 33, told the House Financial Services Committee.
Minhaj focused on student loans during an episode of his Netflix series, "Patriot Act," earlier this year. And while he told the committee that he didn't personally have to worry about post-college debt, he surveyed his audience of about 200 people and learned they collectively owed more than $6 million in student loans.
"Granted, our audience is mainly unemployed poly sci majors, but that's still a lot of money," he said.
He added that "many borrowers are still treated like deadbeats because the government has put their financial futures in the hands of predatory, for-profit loan servicing companies."
Minhaj joined a panel of experts and consumer advocates who testified for four hours to the House Financial Services Committee about the widening student debt crisis and problems in student lending — the first time the full committee has taken up the issue in at least two decades.
How to help student borrowers while ensuring adequate government oversight of the industry has emerged as a major campaign topic among 2020 Democratic contenders.
Consumer advocates and Democrats have accused the Education Department under the Trump administration of failing to clamp down on student loan companies and for-profit colleges accused of preying on students. About 92 percent of student debt is owed to the federal government, which contracts with nine servicers, including companies such as Nelnet and Navient, to handle those student loans.
NBC News reported Monday that the Education Department is intervening on behalf of student loan servicers, some accused of illegally exploiting borrowers, by declining to turn over information to law enforcement agencies in multiple states investigating the businesses.
The department has argued that federal oversight supersedes state regulations, and therefore, states don't have the ability to hold loan servicers accountable — a viewpoint being challenged in courts nationwide.
While the department denied having a blanket policy of not sharing data with state law enforcement agencies, it said that data is released on a case-by-case. If information is being requested as part of an effort to regulate a student loan servicer and the department believes that regulation is pre-empted by federal law, then the data won't be released, a department spokesman said.
Both Democrats and Republicans on the House Financial Services Committee agreed there are systemic problems within the student loan industry, and House Financial Services Chair Maxine Waters, D-Calif., said lawmakers are discussing a series of bills, including creating a comprehensive borrower bill of rights and helping borrowers purchase first homes.
Waters accused the Trump administration of undermining the protection of student borrowers with the appointment last month of a new student loan ombudsman who was a top official at the Pennsylvania Higher Education Assistance Agency, a federal student loan servicer that has been the target of consumer lawsuits and state investigations.
In lawsuits against student loan servicers, the companies have been accused of steering struggling borrowers into higher-cost payment plans or overusing forbearance, which allows students to temporarily postpone repayment while still being charged interest.
The committee's ranking member, Rep. Patrick McHenry, R-N.C., blamed Democratic policies that have nationalized student debt lending for creating a problem that has grown to more than $1.5 trillion worth of student debt.
"This is a crisis, but a crisis that Congress created and foisted upon a generation," he said, adding that laws need to be reexamined but that student lending is not within the Financial Services Committee's jurisdiction.
In his testimony, Jason Delisle, a resident fellow at the American Enterprise Institute, a conservative think tank, agreed that the policies of the Education Department must be re-examined, and that the department and Congress, which set repayment terms for loans, are driving the problem more than student loan servicers.
"If student debt is harming people, it means higher education is harming people — that's what it paid for," Delisle said.
Other Republican lawmakers also laid the blame on Congress.
"I know everyone wants a bogeyman, and the student loan servicers are a convenient bogeyman, but guess what — look in the mirror Congress. Congress created this crisis," Rep. Andy Barr, R-Ky., said.
The panel of consumer advocates, however, told the committee to focus on stopping predatory lenders in the market, crafting a borrower bill of rights, seeking more accountability from for-profit colleges and studying the disparities that the debt crisis has yielded.
"Like kerosene on a fire, student debt is driving the systemic economic and racial inequality that is tearing our communities apart and tearing our country apart," said Seth Frotman, who started the nonprofit Student Borrower Protection Center to advocate for students after resigning last summer as the Consumer Financial Protection Bureau's student loan ombudsman.
"Regardless of where your presuppositions of blame for this crisis lie, we should all agree on one thing: If you are taking on debt to chase the American Dream, you should not be ripped off in the process," Frotman added.