This is part of an ongoing series by Credible about how the 2016 presidential candidates would affect student loans and the financing of education for students and borrowers.
Democratic presidential candidate Martin O’Malley has been a fierce proponent of college affordability. Since announcing his candidacy in May, O’Malley has made student loan issues a centerpiece of his policy plans: increasing access to federal Pell grants, helping students graduate debt-free from public colleges, and enabling automatic enrollment in income-based repayment plans for student loan borrowers. His plan for college affordability in America revolves around student loan refinancing, a process allowing graduates to pay off their existing loans in favor of new loans often with lower and more favorable interest rates.
O’Malley’s vision for the future of student loans certainly does not exclude himself. Recently, when discussing his plans, O’Malley revealed that he and his wife have accumulated more than $339,200 in student loan debt to send his eldest two daughters to college. His daughters—Grace, 24, attended Georgetown University, a private university that boasts one of the highest rates of student loan debt, and Tara, 23, attended the College of Charleston in South Carolina, a public school for which she paid out-of-state tuition. Grace, a legacy at Georgetown, expressed that it was her dream school; upon being accepted, her parents simply could not say no. Similarly, once O’Malley permitted one daughter to go out-of-state, it was impossible to deny his other daughter of the same opportunity. “I’m blessed with strong-willed women in my life,” O’Malley stated during a telephone interview during a campaign trail in New Hampshire. “I wanted them to go in-state. But I lost the vote.”
The majority of the hefty student debt is from Parent PLUS loans. O’Malley explained, “Better us than [our children] have the debt.” Parent PLUS loans generally have much higher borrowing limits, as parents are often more creditworthy and risk-free borrowers. However, Parent PLUS loans have unique disadvantages. Suzanne Martindale, an attorney for Consumers Union explains, “Loans to graduate students are made on the promise that they will see an increase in salary from their educational attainment that enables them to repay the loans they borrowed. Parents, on the other hand, do not see an increase in their incomes from their children’s education. … They have no guarantee that their children will help pay the loans back, or will even finish school.”
While many parents can certainly identify with the O’Malley’s commitment to a better future and ample opportunities for their children, it must be noted that their situation far from normal. The average indebted undergraduate student graduates with $28,000 in student loans, leaving O’Malley’s $339,200 seeming outrageously high. Given that the O’Malleys have both held stable and high-income jobs as public servants (Martin O’Malley served as the governor of Maryland for the past eight years, and his wife, Katie, worked as a district court judge since 2001), many have begun questioning their financial decisions, namely why they did not begin saving for college earlier. Financial expert Mark Kantrowitz of Edvisors noted that the O’Malleys borrowed more than “99.9 percent of parents,” leaving the O’Malleys as an unfortunate outlier in the student loan debt crisis.
Despite Martin O’Malley’s efforts to personally appeal to the American people, his financial situation must not be held up as a metaphor to the country. In this situation, it may be wise for Americans to do as he says, not as he does when it comes to student loans. As the 2016 presidential race continues, one can be nearly certain that O’Malley will continue to rally support for college affordability, debt-free public institutions, and student loan refinancing to help relieve Americans of their student loan debt.
Be sure to check out sites like Credible to refinance your student loans and compare multiple offers from lenders by filling out just one simple form.