Velázquez Bill Would Help Young Entrepreneurs Pay Off College Debt

Washington, DC – With student loan debt spiraling nationwide, Rep. Nydia M. Velázquez (D-NY) has authored legislation to help recent college graduates who are launching their own businesses to afford student loan repayment.  The bill, H.R. 201, would empower more young people to go into business for themselves upon completing their education without being constrained by debts incurred when securing a college or graduate degree.  

“Too many young people are abandoning dreams of entrepreneurship because of a need to pay down their student loans,” Velázquez said. “This legislation would give them the flexibility to build a business without falling behind on their loan payments.”   

Under Velázquez’s proposal, founders of business startups could secure three years of deferment on student loans. Additionally, entrepreneurs that create new ventures in economically distressed areas could be eligible for $20,000 in loan forgiveness.  

“With this bill, we are telling recent graduates that if they are willing to take the risk in forming a new business, then we will give them some breathing room from their student loans, so they have the financial space to build their new venture,” Velázquez added.  “For those entrepreneurs who create opportunity in economically distressed areas, additional student debt assistance would be available.”

The cost of paying for and financing a college education has grown significantly in recent years and has become a major hurdle for recent graduates interested in pursuing a career in entrepreneurship.   The current amount of student loans has increased tenfold in the last decade.  This mounting debt has constrained new business formation by dissuading many young people from creating their own firms.  Today, around a quarter of new entrepreneurs are aged 20-34, a significant decline from the mid-1990s when this younger demographic comprised 34 percent of new business entrepreneurs.

“It can be very difficult for a college graduate to assume the risk of launching a new company when they can barely keep up with their student loan payments,” Velázquez noted. “This is unfortunate, because new businesses often grow the fastest, adding to their payrolls and creating badly needed jobs.”  

Velázquez is the top Democrat on the House Committee on Small Business. In that role, she has long advocated for greater opportunities for entrepreneurship, particularly among women, people of color, veterans and young people.