“These students didn’t go to the mall and run up charges on a credit card,” Senator Elizabeth Warren (D-MA) said. “They worked hard and learned new skills that will benefit this country and help us build a stronger middle class and a stronger America.”
Her bill called the Bank on Students Emergency Loan Refinancing Act, would allow borrowers with outstanding student loan debt to refinance at the lower interest rates currently offered to new borrowers.
“Exploding student loan debt is crushing young people and dragging down our economy,” Warren said. “Allowing students to refinance their loans would put money back in the pockets of people who invested in their education.”
Warren’s bill has wide support in the the Senate with co-sponsoring Senators Barbara Boxer (D-CA), Patty Murray (D-WA.), Dick Durbin (D-IL), Jack Reed (D-RI), Mary Landrieu (D-LA), Debbie Stabenow (D-MI.), Sherrod Brown (D-OH), Sheldon Whitehouse (D-RI), Mark Udall (D-CO), Tom Udall (D-NM), Jeanne Shaheen (D-NH), Jeff Merkley (D-OR), Mark Begich (D-AK), Kirsten Gillibrand (D-NY), Al Franken (D-MN), Richard Blumenthal (D-CT), Brian Schatz (D-HI), Tammy Baldwin (D-WI), Chris Murphy (D-CT.), Mazie Hirono (D-HI), Heidi Heitkamp (D-ND), Edward J. Markey (D-MA), and Cory Booker (D-NJ).*
“Instead of being saddled with student loan debt, our graduates should be able to start businesses, buy homes, and contribute to their communities,” Senator Brown said. “Ensuring that students and graduates can refinance their loans for more affordable monthly payments is not just the right thing to do, it will also strengthen our economy.”
Borrowers with student loans currently have to pay them with interest rates of close to 7 percent or more for undergraduate loans, while students taking out new undergraduate loans pay a rate of 3.86 percent under the Bipartisan Student Loan Certainty Act , which President Obama signed into law last summer.
Warren’s student loan refinancing bill would allow our students and young Americans to pay back their outstanding loans at the exact same 3.86 percent rate.
The law was passed with bipartisan support with Senate Republicans signing onto that piece of legislation as recognition of the student debt crisis crippling the American middle class.
Both sides of the aisle in Congress recognize the need to address the student debt crisis, including Senator Marco Rubio (R-FL), so those millions of Americans will be looking to Congress for bipartisanship in order to protect the country’s economy and middle class.
Seeing as how today’s legislation ties refinancing to the rates of last year’s Bipartisan Student Loan Certainty Act, Congressional Republican leadership would then agree with it as they previously approved that rate for borrowers already.
“As we saw last year, ensuring that student loan borrowers benefit from low, market-based loan interest rates is a bipartisan policy, and Generation Progress is excited to work with Congress to tackle this crisis,” Executive Director of Generation Progress Anne Johnson said. “Student loan borrowers should be able to refinance their loans—just like homeowners, corporations, and even state and local governments.”
Fellow policy experts also recognize the need for effective policy when it comes to addressing the student debt crisis, like Vice President for Higher Education Policy at the Center for American Progress David Bergeron.
“Student loan debt is getting out of control, and we need long-term solutions to help existing borrowers and create an economy that works for everyone. Refinancing student loans would boost the economy, help borrowers become more financially stable, and provide relief to millions of Americans,” Bergeron said.
Another of Warren’s co-sponsors, Senator Durbin actually authored the Student Loan Borrower Bill of Rights Act.
“For too many of America’s young people, pursuing a college education has become a one-way ticket to a lifetime of student loan debt,” Senator Durbin said about today’s legislation. “Giving student loan borrowers the option to opt into a lower interest rate by allowing them to refinance their loans will be a financial relief to millions of families in Illinois and America.”
Other co-sponsors echoed similar support about today’s introduction of refinancing legislation.
“Student loan debt has become debilitating for middle class families and graduates,” Senator Booker said. “We see this first hand in New Jersey where graduates face an average debt of $30,335. Student loans should help bring our young people closer to the American Dream, but instead, current interest rates set them up for a lifetime of paying interest.”
For borrowers who have a Bachelor’s degree hold an average of $29,4000 in student debt—impacting almost one in five American households.
Today’s legislation would be funded by the Buffett Rule, which limits special tax breaks for Americans millionaires and billionaires and helps middle class American families who have worked diligently toward furthering their career and adding value to the country’s economy.
Watch Warren’s introduction of the bill below:
*After publication, four additionally Senators joined to co-sponsor Warren’s bill and include: Senators Bernie Sanders (D-VT), Martin Heinrich (D-NM), Amy Klobuchar (D-MN), and Patrick Leahy (D-VT).