Rep. Nydia Velazquez (D-NY), chair of the House Small Business Committee, recently reintroduced the Supporting America’s Young Entrepreneurs Act of 2021, a bill that would provide more opportunities for budding entrepreneurs to start businesses by lowering high levels of student loan debt. This bill also aligns with some of the recommendations in America’s New Business Plan, a report that outlines policies aimed at boosting entrepreneurship.

Small business development and access to entrepreneurial opportunities are cornerstones of the country’s economic and spiritual health. In fact, small businesses account for 99.9% of all private-sector employers and are responsible for more than 65% of job growth since 2000. Yet over the past two decades, entrepreneurial activity has declined, particularly for younger generations. This is not good news, given how much we rely on innovation and business creation for financial security and stability.

There’s growing evidence that higher student debt loads are playing a role in decisions to give up or delay dreams of opening a business.

- Anju Chopra

At the same time, student loan debt is soaring, with millennials carrying significantly more debt than older generations. There’s no indication this upward trajectory is going to plateau any time soon. There’s also growing evidence that higher student debt loads are playing a role in decisions to give up or delay dreams of opening a business.

When Rep. Velazquez reintroduced the bill, she talked of a nation “facing the dual crisis of rising student loan debt and declining entrepreneurship” and “high levels of student loan debt” helping make “millennials the least entrepreneurial generation in modern history.”

The Supporting America’s Young Entrepreneurs Act of 2021 addresses this “dual crisis.” It would increase entrepreneurial opportunities by reducing burdensome student debt levels for entrepreneurs who plan to start a business. Specifically, the bill would address these issues:

• Student loan forgiveness for businesses in distressed areas: The bill provides up to $20,000 in student loan forgiveness for people launching businesses in tepid economic markets.
• Loan forgiveness for other business startups: It also forgives $15,000 -- $3000 annually over five years – for startups, regardless of location.
• Student loan deferment: Whether located in distressed areas or not, entrepreneurs would also be eligible for three years of loan deferment, where the principal and interest on a student loan would not have to be paid.

While the increased burdens faced by younger generations are stark, communities of color have long had to deal with greater barriers to business formation and higher levels of debt to pay for education. These hurdles, which have impeded entrepreneurs of color disproportionately in the past, made it harder for them to remain viable during the pandemic, and if nothing changes, will keep them at a disadvantage moving into the future as well. That means this legislation has the potential to particularly benefit these underserved households, which will help narrow the racial wealth divide.

We are grateful for Rep. Velazquez’s leadership on this legislation. We’d also like to thank Reps. Judy Chu (D-CA), Dwight Evans (D-PA), Andy Kim (D-NJ) and Den Phillips (D-MN) for co-sponsoring the bill.

But to advance the bill further, more support will be needed. You can help us get additional sponsorship by telling your representatives why this act is important and urging them to support it, which you can do by clicking here.