Sen. Warren Introduces Act to Tackle Student Debt

United States Senator Elizabeth Warren and Congressman Joe Courtney (CT-2) introduced the Bank on Students Emergency Loan Refinancing Act in the Senate and House, last week.

The legislation would allow those with outstanding student loan debt to refinance at the interest rates that were approved last year for new borrowers.

A previous version of the bill was voted on in the 113th Congress, and every Senate Democrat and three Senate Republicans voted to move the bill forward, falling just short of breaking a Republican filibuster.

Many borrowers with outstanding student loans have interest rates of nearly 7 percent or higher for undergraduate loans, while students who took out loans in the 2013-2014 school year pay a rate of 3.86 percent under the Bipartisan Student Loan Certainty Act passed by Congress in 2013.

The Bank on Students Emergency Loan Refinancing Act would allow our students and young people to pay back their outstanding loans at the same rates that Democrats and Republicans in the House and Senate embraced last Congress as the appropriate rates for new borrowers.

Nearly a million more borrowers are falling behind on their student loans compared to this time last year.

“Since last year, nearly a million more borrowers have fallen behind on their student loan payments,” said Sen. Warren of Massachusetts. “Young people who are working hard to build a future deserve a real opportunity to succeed, and that means letting struggling borrowers refinance their student loans to take advantage of lower interest rates – the same way people refinance a mortgage, a car loan, or business debt. The Bank on Students Emergency Loan Refinancing Act would give much-needed relief to millions of borrowers, help boost our economy, and strengthen America’s middle class.”

“A college education is one of the most valuable investments a family can make, but rising costs have made it difficult to afford—and student loans often come with higher interest rates than mortgages, car loans, and other forms of consumer lending,” said Rep. Courtney, in a written statement “As higher education becomes more crucial than ever to secure a good-paying job, I applaud Senator Warren for her outstanding leadership on this issue and look forward to working with her to help families afford the dream of college.”

“The burden of student loan debt is a real pocketbook issue for middle-class Americans, and it’s holding back our young people and our economy,” said Senator Al Franken, a member of the Senate Education Committee. “But right now, there are few options to find relief. You can refinance your home loan, your car loan, and your small business loan. But you can’t refinance your student loan. That’s just plain wrong. Our bill would fix this problem by allowing millions of people in Minnesota and across the country to cut the cost of their loans and keep more of their hard-earned money.”

“Middle class families need a raise and more money in the family checkbook. That means a fair shot at affordable higher education to help them climb the rungs of America’s opportunity ladder,” Senator Mikulski said, in a press release. “Right now, millions of American students are graduating from college and universities but as they are handed their diplomas, they are being handed a lifetime of debt. Getting a college education is the core of the American dream. I’m fighting to make sure that every student has access to that dream.”

“I am proud to support legislation that would help millions of American families facing overwhelming student loan debt to refinance at the lower interest rates that currently offered to students,” said Senator Ed Markey. “The savings enjoyed by these families through the refinancing of their student loans will help pay for the down payment on a new home, to start a family, or build a new business. I thank Senator Warren for her leadership on this important issue, and will work with her and all of my Senate colleagues to support greater access to higher education and to make college more affordable.”

“Student debt is not only a drag on the American economy, it is tearing at the fabric of the American dream,” Senator Barbara Boxer of California said, in a written statement. “It is outrageous that students can’t refinance at today’s low interest rates. This legislation gives students the same fair shot that other borrowers have when interest rates decline.”

“Congress needs to act to prevent student loan debt from unduly burdening young people and threatening our economic future. Students and parents who had to take out loans when interest rates were high should be given an opportunity to refinance at a lower rate. Congress should work on a bipartisan basis to help lift the student debt burden and address the root issues of college affordability. This legislation is one of many steps I believe Congress should take to enact sensible student loan reform,” said Senator Jack Reed.

“Throughout New Hampshire and across the country people are struggling with the increasing costs of higher education and that’s hurting our students and our economy,” said Senator Jeanne Shaheen, of New Hampshire, in a press release. “Students should be able to refinance their loans just like homeowners can refinance their mortgages. Our plan will help borrowers save thousands on their loans and we ought to act on it on behalf of students who are struggling with crippling debt.”

“It just doesn’t make sense that college graduates can’t refinance their student loan debt just like homeowners and businesses already do,” said Senator Kirsten Gillibrand, of New York, in a press release. “It is clear that student loan debt is dragging down our economy, stopping graduates from buying homes and cars, or delaying the starting of businesses and families. We must strengthen our middle-class families, especially those just starting their careers, instead of forcing them deeper into debt while the federal government profits off their backs.”

“More than 70% of college students who earn a bachelor’s degree graduate with debt – a financial and emotional burden that hurts not only them, but the entire American economy. I am proud to again cosponsor this crucial legislation to ensure graduates are provided relief from inordinate debt. It is abhorrent that the federal government is making $66 billion a year off the backs of students,” said Senator Richard Blumenthal, in a written statement. “We should reward students who invest in their education, not punish them with high interest rates or profit off their backs. As of January 2015, over 511,000 Connecticut residents had outstanding student loans totaling over $12 billion dollars – this legislation will allow students to refinance their loans, and give graduates a fair shot at better lives and brighter futures.”

“If you can refinance your mortgage, you should be able to refinance your student loans, and this bill would benefit nearly 1 million graduates across Michigan working to pay off their outstanding student loan debt,” said Senator Gary Peters, of Michigan, in a statement. “I’m proud to support this commonsense effort to help make sure higher education is a pathway to economic opportunity instead of an overwhelming financial burden for students and families.”