In Hartford, Push for Student Loan Bill of Rights

Four years ago, Sarah Petrario saw an opportunity-one that she thought had eluded her when she finished her undergraduate education in 2002-and she ran for it.

“Ever since I was a little girl, I wanted to be a veterinarian,” Petrario said over the phone. “But it was very hard because there are no vet schools in Connecticut.”

And there are only 30 accredited programs throughout the country, so in 2007 she left her teaching job in Rocky Hill and took her studies to St. George’s in Grenada. But four years after graduation, the finish line-her dream of opening up her own veterinary practice and purchasing a home-seems even further away as her strides are hindered by the weight of $180,000 of student debt. Petrario started with $225,000 in unpaid loans when she finished in 2011.

“They’re just growing faster than I can pay them,” Petrario said. “Half of my paycheck goes to student loans. My student loans aren’t my only bills-I have to pay for my car, health insurance.”

She has tried to cut them down, but to no avail-lenders have refused to let her refinance. They tell her that her income-to-debt ratio is too high. One bankruptcy lawyer told her to just let them go into default.

“His solution was to leave the country and walk away from them,” Petrario said. “He was serious. What he says becomes truer and truer every year.”

Not that she’s really considering it-she still wants her own practice and the American Dream-embodying home-but the future she envisioned, in her mind, is becoming less and less likely the longer she stays in debt. Petrario admittedly has no regrets-she’s working as a veterinarian in Waterbury and loves the work-even if she considers the decision to pursue her advanced degree to the tune of $43,000 per year “financial suicide”.

But there’s one bill that she wouldn’t mind getting-a student loan bill of rights. That’s what is being discussed up in Hartford now. Legislators want increased oversight of lenders, but they are also looking to provide prospective borrowers with more information-both on securing loans and more easily paying them.

“If you look at student loans, they’re actually the second biggest source of debt,” said Democratic State Representative Matt Lesser, who proposed the tentative legislation. “People owe a lot of money to student loans. It’s the only debt you can’t escape from. If follow you for the rest of your life-people are losing their social security to pay student loans.”

That’s because borrowers cannot just declare bankruptcy and have the debt absolved. Lesser and other proponents of the bill are hoping to establish ways to at least lighten the load-proposed provisions include an easier path to refinancing a loan.

The average amount of student debt is $30,191 in Connecticut, where 64 percent of college graduates leave school with loans to pay off, according to a study conducted by The Project on Student Debt. Nationally, it’s almost 70 percent.

“This is the most important issue for people of my generation,” Lesser said. “If you can’t afford to go to college, you lose out on the middle class.”

Republican State Representative Bill Simanski, another one of the proposal’s supporters, stresses the education aspect over the industry regulation component. Through the stress of getting into college and then finding a way to pay for it, people might make quick decisions regarding a loan without knowing the full extent of what is available to them, Simanski says.

“People need to understand that there are options,” he said. “It’s not like you only have to go to a bank, or the provider the school provides you. People also need to know that once they graduate, they can get a forbearance. these are things I didn’t know-my sons didn’t know.”

Simanski helped both of his sons finance their college tuition, but says that both are carrying around $100,000 in student loan debt. Factor in the job outlook for many recent graduates, and it can become even more overwhelming, he says.

In 2014, the unemployment rate for “young college graduates” was 8.5 percent-up from 2007’s 5.5 percent, according to The Economic Policy Institute.

“You don’t get a job immediately out of college unless you’re lucky,” Simanski said. “And let’s say it’s $35,000 [in salary]-once you pay to get your apartment, how much money do you have left to pay for your loan?”

That’s why Petrario is living at home with her parents-as many graduates do-but even with that situation and a veterinarian’s salary, she feels buried by her debt.

“We’re punishing people for trying to better themselves,” Petrario said. “It’s not allowing us to get ahead.”

The informational aspect of the bill will start with The Office of Loan Ombudsman, according to Lesser.

“That’s a fancy word for somebody who helps you get loans-basically help you with the process,” Lesser said.

Part of the regulation portion is in establishing a mandate for full transparency, Simanski says.

“They’re going to have to tell you upfront how much it is, how long you’ll be paying-everything that’s pertinent to making a decision on that loan,” he said.

That will be consistent with Federal laws-specifically the Federal Truth in Lending Act, Simanski says.

Petrario admits that when she first took out her loans, she did not know what they would look like years later, but interests rates can inflate the debt.

“I don’t think people realize how much these loans grow,” she said. “I gave them thousands of dollars last year and only $8 went to my principle.”



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