Last year, we fought to lower the interest rates on student loans – and nearly all the Republicans in Washington agreed with us that rates were far too high.
So Congress lowered the rates for new borrowers this year – not as much as we would have liked, but some. But Congress did nothing for the millions of people stuck with older high interest rate loans.
Today, I’m introducing the Bank on Students Emergency Loan Refinancing Act, and the idea is so popular that it already has 23 co-sponsors. The bill lets qualified borrowers refinance their existing student loan debt to the same lower prices that Congress agreed upon for new students this year.
Student loan debt is exploding. Outstanding student loans now total more than $1.2 trillion – and each year, students are taking on more and more and more. In 2012, an astonishing 71% of college seniors owed student loans, and, from 2004 to 2012, the average student loan balance increased by 70%.
Now, millions of young people are struggling to keep up with their student loan payments. Everywhere I go, I meet young people who worked hard, played by the rules, and got an education – only to be crushed with student loan debt.
The economic impact is real. Federal watchdog agencies like the Federal Reserve, the Treasury Department, and the Consumer Financial Protection Bureau are already sounding the alarm. Every day, this exploding debt stops more and more young people from moving out of their parents’ homes, from saving for a down payment, buying homes, buying cars, starting small businesses, saving for retirement, or making purchases that grow our economy.
Forty million Americans have outstanding student loans. The Bank on Students Emergency Loan Refinancing Act will save millions of these young people hundreds or even thousands of dollars a year, putting real money back into their pockets. The sooner we pass refinancing legislation, the sooner they’ll get a little bit of relief.