Courtney Calls for Action to Alleviate Student Debt; Strengthen Connecticut's Economy & Housing Market
April 13, 2015
NORWICH, CT—Friday, Congressman Joe Courtney (CT-2) joined Rachael Johnston, a real estate broker, and Evan Preston, State Director of ConnPIRG, to call for action on Courtney’s bill, H.R. 1434, the Bank on Students Emergency Loan Refinancing Act. The bill, which would allow student loan borrowers to refinance their debt to lower rates and reduce monthly payments, has more than 100 House cosponsors and was co-introduced in the Senate by Senator Elizabeth Warren (D-MA).
“Student debt has risen astronomically in recent years, burdening young adults with hefty monthly payments as soon as they begin their careers. This massive debt—which exceeds $1.3 trillion nationwide—hampers our economic recovery by preventing young people from buying homes, starting businesses, and saving for retirement,” Courtney said.
“In Connecticut, where our housing market recovery is critical to boosting economic growth, I hear almost every day from constituents struggling with student debt. My bill would provide immediate relief for more than 309,000 borrowers in Connecticut, reducing monthly payments and reducing pressure on family budgets. A college-educated workforce is critical for our economy, and we must act to ensure that students can afford to earn a college degree,” Courtney said.
“Based on a survey recently performed by the National Association of Realtors, 49 percent of prospective buyers said that student loan debt is a burden to home ownership. The continued recovery of the housing market is heavily dependent upon first time homebuyers, a good amount of whom are saddled with student loan debt. Congressman Courtney's bill could have far-reaching effects, including a positive impact on the first-time homebuyer segment of the housing market," said Rachael Johnston, broker and owner of Johnston & Associates Real Estate in Thompson, Connecticut.
"With Connecticut's student debt burden standing at the sixth highest in the nation, providing refinancing to student borrowers and their families is an urgently needed common-sense step to strengthen consumer protections," said Evan Preston, ConnPIRG State Director.
The bill would allow borrowers with existing undergraduate student loans issued prior to July 1st, 2015 to refinance those loans to a 3.8 percent annual interest rate. Graduate school loans could be refinanced to 5.4 percent, and parent loans for a child’s education to 6.4 percent. According to estimates from the nonpartisan Congressional Budget Office, half of the outstanding loan volume for federal student loans—about $460 billion—would be refinanced under this bill.