03.19.15

Baldwin Supports Action to Tackle Student Debt Crisis

Nearly a Half a Million Wisconsin Borrowers Could Find Relief with Bank on Students Emergency Loan Refinancing Act

Washington, D.C. – U.S. Senator Tammy Baldwin signed on as an original cosponsor of the Bank on Students Emergency Loan Refinancing Act, introduced by U.S. Senator Elizabeth Warren (D-MA). The legislation would allow those with outstanding student loan debt to refinance at the interest rates that were approved last year for new borrowers. 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.

“A college education should be a path to prosperity not a path to indebtedness, but student loan debt is holding back an entire generation and creating a drag on economic growth for our country,” said Senator Baldwin. “I am proud to co-sponsor this legislation because it addresses the student loan debt crisis by providing relief to close to half a million Wisconsin borrowers. This crisis demands action and this commonsense legislation will help give students a fair shot at getting ahead and building a stronger future for themselves.”

“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.”

Many borrowers with outstanding student loans have interest rates of nearly 7 percent or higher for undergraduate loans, while students who took out loans in the 2013-2014 school year pay a rate of 3.86 percent under the Bipartisan Student Loan Certainty Act passed by Congress in 2013. The Bank on Students Emergency Loan Refinancing Act would allow our students and young people to pay back their outstanding loans at the same rates that Democrats and Republicans in the House and Senate embraced last Congress as the appropriate rates for new borrowers. Nearly a million more borrowers are falling behind on their student loans compared to this time last year.

The Bank on Students Emergency Loan Refinancing Act would allow borrowers with federal and private undergraduate loans at high interest rates to refinance at today’s lower rates of 3.86 percent with no refinancing fees. The bill:

  • Allows eligible student loan borrowers to refinance their federal loans. All eligible federal FFELP and Direct student loan borrowers could refinance their high-interest loans down to the rates offered to new federal borrowers in the 2013-2014 school year under the Bipartisan Student Loan Certainty Act.
  • Allows eligible student loan borrowers to refinance their private loans into the federal program. The bill provides those who meet certain eligibility requirements and are in good standing the option of refinancing their high-interest private student loans down to the rates offered to new federal student loan borrowers this year. Those who refinance will also have access to the benefits and protections of the federal student loan program. Participation is fully voluntary.
  • Eliminates tax loopholes for millionaires and billionaires. The cost of refinancing is offset by implementing the Buffett rule, which ensures that millionaires and billionaires pay their fair share in taxes. In 2012, Baldwin served as the lead sponsor in the House of Representatives of the Paying a Fair Share Act, also known as the Buffett Rule.

 

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