Six Reasons Student Debt Is Stealing the American Dream — and the Legislation That Could Give It Back

The Promise That Became a Trap

For decades, the guidance given to American young people was consistent and confident: go to college, earn your degree, and the investment will pay for itself. For generations of students who took that advice — and took out the loans to act on it — the math has not worked out the way they were promised.

Today, Americans collectively carry more than $1.7 trillion in student loan debt. The average borrower graduates with approximately $37,000 owed before they have earned their first professional paycheck. For graduate and professional school students, that figure climbs dramatically higher. And unlike virtually every other form of consumer debt in the United States, student loans cannot be discharged in bankruptcy under most circumstances — a legal carve-out that leaves borrowers trapped in financial obligations that can follow them for decades.

This is not a personal failing. It is a policy failure. And it demands a legislative response.

Shireen has made student debt relief a cornerstone of her congressional platform, because she understands what the data confirms: the student loan crisis is not merely a financial inconvenience for a subset of young professionals. It is a structural impediment to homeownership, family formation, small business creation, and long-term economic participation for an entire generation of Americans.

Here are six ways that student debt is reshaping — and restricting — life for young Americans, and the specific legislative remedies Shireen is championing in response.

1. The Homeownership Gap Is Real and Measurable

Millennials and Gen Z borrowers are purchasing homes at significantly lower rates than previous generations did at comparable ages. A 2023 analysis by the National Association of Realtors found that student loan debt was cited as a primary obstacle to homeownership by 51 percent of non-homeowning respondents under 40.

When monthly loan payments consume hundreds — sometimes more than a thousand — dollars of take-home pay, saving for a down payment becomes functionally impossible for many borrowers. The dream of owning a home, one of the foundational pillars of the American middle class, is being deferred or abandoned entirely.

Shireen's response: She supports targeted debt cancellation for borrowers below defined income thresholds, combined with income-driven repayment reform that caps monthly payments at a genuinely affordable percentage of discretionary income — freeing up capital that borrowers could redirect toward savings and eventual homeownership.

2. Interest Rates Are Designed to Keep Borrowers in Debt

Federal student loan interest rates are set by Congress — which means the current rates, ranging as high as 8.05 percent for graduate PLUS loans, are a political choice, not an economic inevitability. Many borrowers find that years of on-time payments have barely reduced their principal balance because interest continues to accrue faster than payments can retire it.

This is not a bug in the system. For lenders and for the federal government, which profits from student loan interest, it is a feature. For borrowers, it is a financial treadmill with no exit.

Shireen's response: She advocates for legislation to cap federal student loan interest rates at levels reflective of the government's actual cost of borrowing, and to eliminate interest capitalization practices that cause unpaid interest to be added to loan principal, compounding borrowers' obligations over time.

3. The Public Service Loan Forgiveness Program Is Broken

Public Service Loan Forgiveness — the federal program designed to cancel debt for borrowers who work in government or nonprofit roles for ten years — has a documented history of catastrophic failure. In its early years, the program rejected more than 98 percent of applicants, often for technical paperwork errors rather than substantive ineligibility.

Teachers, nurses, social workers, and public defenders who structured their careers around this promise have been left with nothing after a decade of qualifying work. The betrayal is not abstract — it has cost people their retirement savings, their financial stability, and their trust in government.

Shireen's response: She supports comprehensive PSLF reform legislation that simplifies the application process, expands eligibility, and creates a retroactive review process for borrowers who were wrongly denied in previous program cycles.

4. For-Profit Institutions Preyed on Vulnerable Students — and Largely Escaped Accountability

The student debt crisis was not created equally. Borrowers who attended for-profit colleges — institutions that aggressively recruited low-income students, veterans, and first-generation college attendees with promises of career outcomes they could not deliver — carry disproportionate debt loads relative to the earnings their credentials actually produced.

Many of these institutions have since closed or faced federal enforcement actions. Their former students, however, are still paying. The Borrower Defense to Repayment program, which is intended to cancel debt for students defrauded by their institutions, has been chronically underfunded and inconsistently administered.

Shireen's response: She supports strengthening Borrower Defense regulations, fully funding the program's administrative infrastructure, and holding predatory institutions — and their investors — financially accountable for the harm they caused.

5. The Racial Wealth Gap Is Widened by Student Debt

Student debt does not burden all borrowers equally. Black graduates borrow at higher rates, borrow larger amounts, and experience significantly greater difficulty repaying their loans than white graduates with comparable educational credentials — a disparity driven by the intersection of racial wealth gaps, discriminatory labor market outcomes, and the compounding effect of interest on larger balances.

A report from the Brookings Institution found that Black borrowers owe, on average, 95 percent of their original loan balance four years after graduation, compared to 65 percent for white borrowers. Student debt, in this sense, is not merely a generational issue. It is a racial justice issue.

Shireen's response: She supports debt cancellation policies specifically calibrated to address racial wealth disparities, including higher cancellation thresholds for historically disadvantaged borrowers, and investments in Historically Black Colleges and Universities to reduce the debt burden on future students.

6. The Economy Loses When Young People Cannot Participate Fully

The macroeconomic consequences of the student debt crisis extend well beyond the borrowers themselves. When a generation delays purchasing homes, starting businesses, and building consumer spending power, the entire economy contracts. The Federal Reserve Bank of New York has estimated that student debt suppresses small business formation — a critical driver of job creation and community economic vitality — by measurable and significant amounts.

This is a self-inflicted drag on American economic dynamism. And it is correctable.

Shireen's response: She supports legislation that allows student loan interest to be fully deducted from federal taxes, small business startup incentives for borrowers who launch enterprises in underserved communities, and the elimination of origination fees on federal student loans.

A Generation Deserves Better

The young Americans navigating this crisis did not create it. They followed the rules they were given, trusted the institutions that recruited them, and are now living with the consequences of a system that was never designed with their long-term wellbeing in mind.

Shireen for Congress is committed to being a voice for those constituents on the floor of the House — pushing for legislation that treats student debt not as an individual burden to be managed, but as a collective policy failure to be corrected.

Every American deserves the opportunity to build a life without being shackled to decisions made at seventeen and eighteen years old. That is not a radical proposition. It is the foundational promise of this country — and it is long past time Congress kept it.