WASHINGTON – U.S. Senators Ben Cardin and Chris Van Hollen (both D-Md.) joined 136 of their congressional colleagues today to reintroduce the Bank on Students Emergency Loan Refinancing Act in both the Senate and House. This legislation would allow holders of undergraduate, graduate, and parent student loan debt to refinance their loans at the interest rates offered to new federal student loan borrowers in the 2016-2017 school year. A previous version of the bill was voted on in the 113th Congress, and every Senate Democrat and three Senate Republicans voted to move the bill forward, falling just short of breaking a Republican filibuster.
Since the original bill was introduced, student loan debt has grown by about $200 billion. In 2015, 70% of college seniors graduated with debt. And this year, more than one in four borrowers are in delinquency or in default on their student loans. According to a recent analysis, a quarter of borrowers default over the life of their loans. It is clear that the student loan debt crisis is getting increasingly worse, with no signs of slowing down. It is a crisis that threatens our economy, and the futures of young people all across America. With interest rates scheduled to rise again this summer, the urgency for Congress to address the student debt crisis and to allow borrowers to access today’s lower rates is stronger than ever.
“There is something inherently wrong with the Department of Education estimated to make a profit of more than $81 billion off of the backs of student loan borrowers over the next decade. I find it unconscionable that hard working students and their families are prohibited by law to refinance their federal student loans to lower, more affordable interest rates while the owner of a luxury vacation home can take advantage of today’s low interest rates,” said Senator Cardin, a member of the Senate Finance Committee. “The American Dream is being pushed beyond the grasp of families today with rapidly mounting student debt loads, this commonsense bill should be a first step to making the cost of a college education more affordable for students and their families.”
“Student debt has a domino effect that is making it difficult for an entire generation of Americans to get ahead and save for their futures,” said Senator Van Hollen. “But instead of delivering on his campaign promises to make borrowing for college less burdensome, President Trump has made it even harder for students to pay for higher education. Allowing those with outstanding debt to refinance to current, lower rates is common sense and basic fairness as we work to make sure everyone in Maryland and across the country who wants a college education is able to pay for it.”
The Department of Education estimates that approximately 25 million borrowers would be able to refinance their loans under this legislation and would receive an estimated average savings of $2,000 over the life of their loans.
In addition to Senators Cardin and Van Hollen, original sponsors of the legislation in the Senate include Senators Elizabeth Warren (D-Mass.), Tammy Baldwin (D-Wis.), Michael Bennet (D-Colo.), Richard Blumenthal (D-Conn), Cory Booker (D-N.J.), Sherrod Brown (D-Ohio), Bob Casey Jr. (D-Pa.), Catherine Cortez Masto (D-Nev.), Tammy Duckworth (D-Ill.), Dick Durbin (D-Ill.), Al Franken (D-Minn.), Kirsten Gillibrand (D-N.Y.), Kamala Harris (D-Calif.), Maggie Hassan (D-N.H.), Martin Heinrich (D-N.M.), Heidi Heitkamp (D-N.D.), Mazie Hirono (D-Hawaii), Amy Klobuchar (D-Minn.), Patrick Leahy (D-Vt.), Joe Manchin (D-W.Va.), Ed Markey (D-Mass.), Bob Menendez (D-N.J.), Jeff Merkley (D-Ore.), Chris Murphy (D-Conn.), Patty Murray (D-Wash.), Gary Peters (D-Mich.), Jack Reed (D-R.I.), Bernie Sanders (I-Vt.), Chuck Schumer (D-N.Y.), Jeanne Shaheen (D-N.H.), Debbie Stabenow (D-Mich.), Tom Udall (D-N.M.), Sheldon Whitehouse (D-R.I.) and Ron Wyden (D-Ore.).