WASHINGTON, D.C. – Today, U.S. Sen. Sherrod Brown (D-OH) joined U.S. Sen. Elizabeth Warren (D-MA) and several of his colleagues in introducing the Bank on Students Emergency Loan Refinancing Act, which would allow those with outstanding student loan debt to refinance at the lower interest rates currently offered to new borrowers.
“Instead of being saddled with a lifetime of student loan debt, college graduates should be able to start businesses, buy homes, and contribute to their families and communities,” 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.”
Many borrowers with outstanding student loans have interest rates of nearly seven percent or higher for undergraduate loans, while students taking out new federal undergraduate loans pay a rate of 3.86 percent under the Bipartisan Student Loan Certainty Act passed by Congress last summer. 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 Senate Republicans overwhelmingly embraced just last summer as appropriate for new borrowers.
There are nearly 40 million Americans with outstanding student loans. The Bank on Students Emergency Refinancing Act could lower payments for millions of those individuals by hundreds or thousands of dollars a year. The average student loan debt among those who borrow to earn a bachelor’s degree is nearly $30,000 – and a shocking 30 percent of Federal Direct student loan dollars are in default, forbearance, or deferment. Meanwhile, the Government Accountability Office (GAO) recently projected that the government will bring in $66 billion in revenue on its federal student loans made between 2007 and 2012.
The legislation is fully funded by enacting the Buffett Rule, which would limit special tax breaks for the wealthiest Americans that allow millionaires and billionaires to pay lower effective tax rates than middle class families. A companion bill is being introduced today in the U.S. House of Representatives by Reps. John Tierney (D-MA) and George Miller (D-CA), the senior Democrat on the House Committee on Education and the Workforce.
Brown continues his fight to ensure Ohio’s students can receive an affordable college education. In April 2014, with student loan debt now exceeding $1 trillion, Brown announced his support for the Know Before You Owe Private Student Loan Act which would protect college students and their families from confusing private student loan practices. This bill would require private student loan lenders to make contracts easier to understand to prevent borrowers from ending up with unexpected and overwhelming debt. Brown also is the author of the Refinancing Education Funding to Invest (REFI) for the Future Act. Brown’s bill would help individuals saddled with costly, private student loans refinance to more affordable options—at no cost to taxpayers.