Nearly a Million More Borrowers Are Falling Behind On Their Student Loans
Growing U.S. Student Loan Debt Now Totals $1.3 Trillion
WASHINGTON, DC — United States Senator Elizabeth Warren (D-Mass.) and dozens of Senate Democrats today introduced an amendment to the Senate budget resolution that would make college more affordable for middle-class families by allowing borrowers with outstanding Federal and private student loans to refinance at the interest rates approved last year for new borrowers. The cost of the amendment is fully offset by requiring millionaires to pay at least a 30 percent effective Federal tax rate.
Last week, Senator Warren and Congressman Joe Courtney (CT-2) introduced the Bank on Students Emergency Loan Refinancing Act in the Senate and House. In the 113th Congress, every Senate Democrat and Independent, and three Senate Republicans, voted to move a similar bill forward, falling just short of breaking a Republican filibuster.
“Our budget should reflect our priorities and our values, and that includes investing in young people working hard to build a future,” Senator Warren said. “Since last year, nearly a million more people have fallen behind on their student loan payments. Borrowers should be able to refinance their student loans to take advantage of lower interest rates – the same way people refinance a mortgage, a car loan, or business debt. This would give would give much-needed relief to millions of borrowers, help boost our economy, and strengthen America’s middle class.”
“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 Franken. “And 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 amendment would fix this problem by allowing tens of 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. “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.”
“It is outrageous that students can’t refinance at today’s low interest rates,” Senator Boxer said. “This amendment would ensure that students have the same fair shot as other borrowers when interest rates decline.”
“A college degree is a worthwhile investment, and can be a ticket to the middle class, yet far too many Americans are struggling under the crushing burden of student debt,” said Senator Murray. “This legislation would put more money in borrowers’ pockets by bringing down the costs of the investments they made in their education, which will benefit our economy and help lift the burden of student loans for people in Washington state and across the country.”
“High student loan debt is crippling a generation of Americans. Allowing those with high interest public or private loans to refinance to the same interest rates offered last year is a commonsense solution that will help borrowers get out from the compounding burdens of existing debt and ever-accruing interest,” Senator Wyden said.
“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,” said Senator Durbin. “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. I am happy to join Senator Warren on this important issue.”
“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 is one of many steps I believe Congress should take to enact sensible student loan reform,” said Senator Reed.
“High interest rates on student loans are creating an anchor around the necks of our young professionals throughout the country as they graduate and enter the workforce, and this legislation will aid those individuals drowning in debt,” said Senator Schumer. “All Americans deserve access to a good education but with skyrocketing student loan debt, plus exorbitant interest rates on top of that, college grads are struggling to make ends meet. Our young men and women deserve a fair shot at an affordable education and this bill will give them some much needed relief.”
“Too many people in Michigan are saddled with decades of debt just because they wanted a fair shot to go to college and get ahead,” said Senator Stabenow. “That is why I’m fighting alongside Sen. Warren and my other colleagues to make college more affordable and to help borrowers who are already weighed down by exploding and unsustainable levels of student debt. Helping these borrowers will improve the lives of millions of Americans and boost our economy by allowing them to spend their money on a home, a car, and the needs of their families instead of on interest payments.”
“Higher education is a pathway to economic opportunity but the burden of excessive student loan debt can prevent college graduates from saving, starting businesses, or buying homes,” Senator Brown said. “Despite the low interest rate environment, many graduates are trapped in high interest rate loans. Ensuring that students and graduates can refinance their loans for more affordable monthly payments will allow them to provide for their families and invest in their communities.”
“Far too many young Americans can’t get ahead today because of the burden of student loan debt,” said Senator Casey. “The Bank on Students Emergency Loan Refinancing Act would help students and recent graduates so they can start saving and working towards their future. This bill could help nearly 1.2 million Pennsylvanians, so I’m calling on Congress to make this legislation a priority.”
“For thousands of Missouri’s young people, staggering student loan debt is strangling the economic opportunities that are supposed to come with a college degree—every dollar paid in interest on that debt, is a dollar not invested in a small business or a new home,” Senator McCaskill said. “I personally benefited from student loans when I was in school, and I’ll continue fighting to make sure that every student who works hard gets a fair shot at an affordable college education.”
“It’s a matter of commonsense that borrowers should be able to refinance their student loans just like homeowners can refinance their mortgages,” Senator Shaheen said. “Across New Hampshire and the country people are struggling with the increasing costs of higher education and that’s hurting our young people and our economy. We owe it to students and graduates who are struggling with crippling debt to give them the flexibility to lower their payments through refinancing.”
“Tens of Thousands of New Mexico students can’t afford college without student loans. And with many families in New Mexico still recovering from the recession, we need to do everything we can to ensure students can manage their debt, graduate from school and contribute to the economy,” Senator Udall said. “This amendment will ease the burden of student debt by allowing students to refinance at a fair and sensible rate, reducing default and helping spur economic recovery.”
“College provides an opportunity for success. But in Colorado, like much of the rest of the country, student loan debt is an increasing and overwhelming problem,” said Senator Bennet. “We can take steps to make that debt more manageable for students and families.”
“A college education should be a path to prosperity not a path to indebtedness, but student loan debt is holding back an entire generation and creating a drag on economic growth for our country,” said Senator Baldwin. “I am proud to co-sponsor this legislation because it addresses the student loan debt crisis by providing relief to close to half a million Wisconsin borrowers. This crisis demands action and this commonsense legislation will help give students a fair shot at getting ahead and building a stronger future for themselves.”
“It’s our job to encourage our young people to rise to the challenge of academic success, and to foster a more innovative, brighter future for our nation,” said Senator Heitkamp. “That’s why we’re working to provide our students with the tools they need to refinance their student loans. Many lawmakers in this Congress – myself included – benefited from similar investment our civic leaders put in place to help us pay for our own college educations. Now it’s our turn to make sure our young people know that their ability to strive and achieve is our priority as well. We can build a brighter economic future, but first we need to give our students the opportunity to succeed.”
“Too many prospective students aren’t able to get a college degree today because the cost of college is just too high,” said Senator Murphy. “If we want the middle class to succeed, we need to make higher education more attainable than it is right now. I’m proud to sign on to this amendment because it will allow students in Connecticut to refinance their loans and ultimately make it easier to earn a degree, get a good job, and succeed in this country.”
“If you can refinance your mortgage, you should be able to refinance your student loans, and this bill would benefit nearly 960,000 borrowers across Michigan working to pay off their outstanding student loan debt,” said Senator Peters. “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.”
The text of the amendment is available here.
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