Schatz Introduces Legislation With Warren To Make College More Affordable
Bill Would Lower Interest Rates and Give Students a Fair Shot at Higher Education
Washington, DC – U.S. Senator Brian Schatz (D-Hawai‘i) introduced today with Senator Elizabeth Warren (D-Mass.) and colleagues the Bank on Students Emergency Loan Refinancing Act, legislation that would allow those with outstanding student loan debt to refinance at the lower interest rates currently offered to new borrowers. Over the last 30 years, the cost of college has increased by 300 percent. Student loan debt is now the highest form of personal debt in the nation, reaching over $1.1 trillion for 38 million student loan borrowers across the country.
Many borrowers with outstanding student loans have interest rates of 7 percent or higher for undergraduate loans, while students taking out new undergraduate loans 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 students and new graduates to pay back their outstanding loans at the same rates that Senate Republicans overwhelmingly embraced just last summer as appropriate for new borrowers.
“A college education is supposed to be a path to opportunity, not a life of debt,” Senator Schatz said. “Giving students the opportunity to refinance their loans at a lower interest will make a college degree more affordable and accessible.”
“Exploding student loan debt is crushing young people and dragging down our economy,” said Senator Warren. “Allowing students to refinance their loans would put money back in the pockets of people who invested in their education. These students didn't go to the mall and run up charges on a credit card. They worked hard and learned new skills that will benefit this country and help us build a stronger middle class and a stronger America."
The average student loan debt among those who borrow to get a bachelor’s degree is nearly $30,000. 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.
The legislation is co-sponsored by Senators Barbara Boxer (D-Calif.), Patty Murray (D-Wash.), Dick Durbin (D-Ill.), Jack Reed (D-R.I.), Mary Landrieu (D-La.), Debbie Stabenow (D-Mich.), Sherrod Brown (D-Ohio), Sheldon Whitehouse (D-R.I.), Mark Udall (D-Colo.), Tom Udall (D-N.M.), Jeanne Shaheen (D-N.H.), Jeff Merkley (D-Ore.), Mark Begich (D-Alaska), Kirsten Gillibrand (D-N.Y.), Al Franken (D-Minn.), Richard Blumenthal (D-Conn.), Tammy Baldwin (D-Wis.), Chris Murphy (D-Conn.), Mazie Hirono (D-Hawai'i), Heidi Heitkamp (D-N.D.), Edward J. Markey (D-Mass.), and Cory Booker (D-N.J.).
Earlier this year, Schatz introduced the College Affordability and Innovation Act of 2014 with Senators Chris Murphy (D-Conn.), Patty Murray (D-Wash.), and Bernie Sanders (I-Vt.), legislation that would incentivize schools to create new, innovative programs to bring down the cost of college while improving the quality of a degree. The bill would also set new standards for schools that receive federal funding so that they’re more accountable to students and taxpayers.
