Courtney, Warren Introduce Bill to Aid Student Loan Borrowers
March 18, 2015
WASHINGTON—Today, Congressman Joe Courtney (CT-2) introduced the Bank on Students Emergency Loan Refinancing Act, a bill that would allow undergraduate borrowers repaying private or public student loans to refinance those loans to an interest rate of 3.86 percent. The bill would also allow graduate and parent borrowers to refinance to competitive rates, reducing monthly payments and helping borrowers repay loans sooner. The bill, co-introduced in the Senate by Senator Elizabeth Warren (D-MA), is a continuation of Congressman Courtney’s efforts to help families afford the costs of higher education.
“A college education is one of the most valuable investments a family can make, but rising costs have made it difficult to afford—and student loans often come with higher interest rates than mortgages, car loans, and other forms of consumer lending,” Courtney said. “This bill will help ease the burden of student debt by allowing undergraduate borrowers to refinance their loans to 3.86 percent—the previous rate for Stafford loans.
“Student debt—which surpassed $1 trillion last Congress—hinders our economy because it delays borrowers from major investments, including buying a home, starting a business, and saving for retirement. As higher education becomes more crucial than ever to secure a good-paying job, keeping college affordable must be a top priority in Washington. I will continue to work to keep the dream of college within reach for Connecticut families.”
“Since last year, nearly a million more borrowers have fallen behind on their student loan payments,” said Senator Warren. “Young people who are working hard to build a future deserve a real opportunity to succeed, and that means letting struggling borrowers refinance their student loans to take advantage of lower interest rates – the same way people refinance a mortgage, a car loan, or business debt. The Bank on Students Emergency Loan Refinancing Act would give much-needed relief to millions of borrowers, help boost our economy, and strengthen America’s middle class.”
The bill would allow borrowers with existing undergraduate student loans issued prior to July 1st, 2015 to refinance those loans to a 3.86 percent annual interest rate. Graduate school loans could be refinanced to 5.41 percent, and parent loans for a child’s education to 6.41 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.