Bank on Students Emergency Loan Refinancing Act would allow borrowers to refinance existing student loans at today’s rates
(Washington, DC) – U.S. Senator Jeanne Shaheen (D-NH) today joined Senate colleagues to introduce the Bank on Students Emergency Loan Refinancing Act, legislation that would allow those with outstanding student loan debt to refinance at lower interest rates currently offered to new borrowers.
Many borrowers with outstanding student loans have interest rates of nearly 7 percent or higher for their undergraduate loans, while students taking out new undergraduate loans currently 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 lower rates for new borrowers that the Senate overwhelmingly approved last summer. The legislation is fully funded by enacting the so-called Buffett Rule, which limits special tax breaks for the wealthiest Americans that allow millionaires and billionaires to pay lower effective tax rates than middle class families.
“Across the country people are struggling with the increasing costs of higher education and that’s hurting our students and our economy,” Shaheen said. “This is especially true in New Hampshire, where an estimated 74 percent of students graduate with debt averaging nearly $33,000. Our plan represents an important step toward addressing the student loan crisis by helping borrowers refinance their student loans and pay down their debts.”
The Bank on Students Emergency Loan Refinancing Act could lower payments for millions of borrowers. The average student loan debt among those who borrow to get a bachelor’s degree is nearly $30,000 – and 30% of Federal Direct student loan dollars are in default, forbearance, or deferment. Meanwhile, the Government Accountability Office recently projected that the government will bring in $66 billion in revenue on its federal student loans made between 2007 and 2012.
Shaheen has repeatedly called to address the growing student loan crisis in New Hampshire and recently introduced legislation that would give students access to a comprehensive online database to manage debt and better navigate repayment. Last year, Shaheen fought to maintain low interest rates for Stafford loans and supported the Pay As You Earn repayment plan to help students and families manage college tuition.