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MICHIGAN — U.S. Senators Gary Peters and Debbie Stabenow joined their colleagues in introducing the Bank on Students Emergency Loan Refinancing Act.
The legislation would allow those with outstanding student loan debt to refinance at the lower interest rates offered to new federal borrowers in the 2016-2017 school year.
“Access to higher education can provide a pathway to economic opportunity, but too many young people are saddled with crushing debt after they leave school,” said Senator Peters. “You can already refinance your mortgage or car loan, and there is no reason student loans should be treated any differently. This commonsense legislation will help reduce the burden of student and allow borrowers to keep more of their hard-earned dollars.”
“Too many young people in Michigan who go to college are saddled with a huge student loan burden,” said Senator Stabenow. “Our bill would allow students and parents to refinance their loans for a better rate – just like people can already do with their car or home loans. All of our students deserve an equal shot at success!”
Since the bill was introduced during the 113th Congress, student loan debt has grown by about $200 billion. In 2015, 70% of college seniors graduated with debt. This year, more than one in four borrowers are in delinquency or in default on their student loans.
In Michigan, tuition for almost every college has more than doubled since the early 2000s. Each student who attends a four-year college in our state leaves with over $29,000 in loan debt on average. 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.
In the Senate, Peters has worked to make higher education more affordable for Michigan students and help reduce the burden of debt. Earlier this year, Peters introduced the Making Education Affordable and Accessible Act (MEAA) to expand dual and concurrent enrollment and early/middle college programs that allow high school students to earn college credits before their high school graduation.
Peters also introduced the Federal Adjustment in Reporting (FAIR) Student Credit Act, which would allow private student loan borrowers who have successfully completed a series of on-time payments to remove the student loan default from their credit report.
Senator Stabenow has championed legislation to support tuition-free community college and increased Pell grant awards for students. Her legislation to reinstate year-round Pell Grants for college students in Michigan and across the country was recently signed into law as part of the government spending bill.