DURHAM, N.C. – A woman with two jobs and four college degrees said she can barely cover her monthly expenses, let alone her student loans.

What You Need To Know

  • North Carolina lacks laws specifically regulating the student loan industry

  • More than 1.3 million North Carolinians owe a total of $48 billion in student loan debt

  • Bipartisan legislation would require income-based repayment plans, among other things

  • Similar legislation has died in committee in prior years

As the daughter of a Marine veteran, Angelica Mitchell was able to go to college on GI Bill benefits, only paying tuition in her final undergraduate semester. When she moved on to graduate school, she qualified for multiple scholarships and worked several part-time jobs on her way to a master's in public administration and a law degree. Even with all this help, she had $240,000 in student loan debt when all was said and done. That meant a bad credit rating, hamstringing her ability to get a job in the law field or find good housing.

“I was just trying to get $1,100 for my bar exam fee so I could take the bar and be licensed as an attorney,” she said. “But I was denied for even that small amount of money even with having a job and just having income anyway.”

According to the N.C. Coalition for Responsible Lending, more than 1.3 million North Carolinians owe a combined total of $48 billion in student loan debt. The average borrower owes $36,000. The debt crisis disproportionately impacts people of color. Twenty percent of borrowers who live in communities of color have collection agencies calling, compared to 14% of borrowers in predominantly white neighborhoods.

Mitchell currently rents a bedroom from a friend and works two jobs as a teacher and doing online deliveries. That's enough to cover her basic living expenses but she doesn't earn enough to make much progress on her loans, which have ballooned to $300,000 thanks to interest.

“It's kind of a catch-22. Either I'm throwing money that's not going toward the principal away or I'm just letting all the interest accrue over time,” she said. “So it's kind of a no-win situation with the current job that I have.”

Although North Carolina has consumer protection laws, it doesn't have a set of rules and regulations specific to the student loan industry. No state had any dedicated student loan laws prior to 2015. A bipartisan group of state lawmakers wants to change that.

Under the proposed Student Borrowers' Bill of Rights, all student loan servicers would be subject to regulation by the state commissioner of banks. Borrowers would have to be evaluated for eligibility for income-based repayment programs, loan forgiveness or other relief programs. Any partial payments would have to be applied in ways that minimize late fees and negative credit reporting. Additionally, the commissioner's office would add an ombudsman who would be responsible for investigating any complaints.

Mitchell said none of her lenders have ever talked to her about income-based repayment or other relief. For current student borrowers like herself, she said some sort of loan forgiveness would be the best option. She said future students are more likely to benefit from any new regulations.

“We wouldn't give this amount of money to an 18 year old for a house, so it doesn't make sense to give them all these loans for a job that we don't even know we will have or that they can get,” she said.

The bill has not yet had a hearing, though the office of bill sponsor Rep. Rachel Hunt, D-Mecklenburg County, said it is not subject to the May 13 crossover deadline. Similar legislation during the 2019-2020 session never received a hearing.