Harvard Law and Policy Review

  • February 22, 2017
    Guest Post

    by Maura Healey, Attorney General of Massachusetts*

    To pay for the hallmarks of a decent middle-class life, American families have found it increasingly necessary to borrow money. We tell our children that a college degree is essential for their success in the modern economy, but few students can afford the ever-increasing costs of higher education without incurring student loans. (1) We extoll the virtues and benefits of homeownership, but the high cost of housing requires most homeowners to have a mortgage loan. (2) As middle-class wages have remained stagnant, consumers have looked to credit to pay for essential expenses like transportation, medical bills, and childcare. As a result, many American households find themselves deeply in debt.

    Too often, these debts have proven to be disastrous. Countless students sought to learn essential job skills and borrowed heavily to do so, but instead became the victims of high-cost, fraudulent, for-profit schools that offered no meaningful vocational training. (3) Homeowners across the country are still grappling with the consequences of the predatory subprime mortgage loans that caused the financial crisis of 2008. (4) While debt may allow some families to succeed, debt cripples the aspirations and ambitions of many others— approximately seventy-seven million Americans have at least one delinquent debt on their credit report. (5) 

    Given the challenges that consumer debt poses to the economic security of so many people, I applaud the Harvard Law & Policy Review for devoting this issue to discussing the rights and obligations of creditors and debtors and to the appropriate policy responses to America’s ongoing struggles with debt.

  • February 21, 2017
    Guest Post

    by Ryan Cohen and Shane Hebel, Harvard Law & Policy Review, Volume 11 Editors-in-Chief

    During this time, when our nation appears so divided, there is one thing that we all share, whether we are Democratic or Republican, teacher or coal miner, voter or U.S. President, from the coasts or from Appalachia. Debt. We may be a nation of red, white, and blue, but mostly, we are just in the red.

    Our students are in debt (as graduate students, we can attest to that from personal experience). Our households are in debt. Our cities are in debt. Our nation is debt. Even our new president is in debt—billions of dollars of it. Collectively, Americans are $12.35 trillion in the hole. And that is not even including our $19 trillion national debt. In the past decade, U.S. household debt has risen 11 percent. Today, the average household with any debt at all is $132,529 in debt, including mortgages. Meanwhile, student loan debt has increased 186 percent.

    Debt is so pervasive and central in American society that The Week published an article late last year entitled How the Politics of Debt Explains Everything that described the “underlying political economy” as “a creditor/debtor stand-off where the creditors have the whip hand” and attributed Donald Trump’s ascendency to his “riding debtor anger against creditor strength.”

    While strategies to address debt divide us along partisan lines, there is bipartisan recognition that debt--in some form or another--is a problem. Rep. Brian Babin (R-TX) has said: “Would I like to see [the budget] balance? Certainly. Absolutely. I’ve got 13 grandchildren, and I don’t want to see them buried under $30 trillion of debt.” Focusing on individual debt, Sen. Elizabeth Warren (D-MA) has said: “College students today are drowning in debt, and it is hurting them and hurting our economy. We must find a way to help families pay for college without condemning them to a lifetime of indebtedness.”