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We define the null hypothesis and alternative as below
H0 : average debt = $3262 ( null hypothesis)
H1 :average debt < $3262 ( alternative hypothesis)
We then compute the z test defined as ( (2995 - 3262) / (1100/ 7.07) ) = -1.72
we obtain the critical value at 0.05 level of significance, with respect to a left tailed test = -1.645
From the above, out test value ( -1.72) is less than our critical value (-1.645) ,we therefore reject the null hypothesis.
Hence we may conclude that the student senate claim was right.