I received info and a petition asking to support Sen. Elizabeth Warren’s new proposal to help college students pay back their loans. Other than what the petition says, and information from Warren’s own website, I haven’t found much else about it. From Warren’s senate website:
United States Senator Elizabeth Warren (D-Mass.) today introduced the Bank on Students Emergency Loan Refinancing Act, which would allow those with outstanding student loan debt to refinance at the lower interest rates currently offered to new borrowers. 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.), and others… (see link for all the names)
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 Senate Republicans overwhelmingly embraced just last summer as appropriate for new borrowers.
There are nearly 40 million Americans with outstanding student loans. The Bank on Students Emergency Refinancing Act could lower payments for millions of those individuals by hundreds or thousands of dollars a year. The average student loan debt among those who borrow to get a bachelor’s degree is nearly $30,000 – and a shocking 30% of Federal Direct student loan dollars are in default, forbearance, or deferment. Meanwhile, the Government Accountability Office (GAO) 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 fully funded by enacting the Buffett Rule, which would limit special tax breaks for the wealthiest Americans that allow millionaires and billionaires to pay lower effective tax rates than middle class families. A companion bill is being introduced today in the U.S. House of Representatives by Representatives John Tierney (D-Mass.) and George Miller (D-Calif.), the senior Democrat on the House Committee on Education and the Workforce.
I don’t know a lot about banking and finance, so while all this sounds great, I can’t tell whether the plan would actually work. I’m also wondering whether this kind of legislation has much of a chance in the Republican-dominated House. Has anyone else heard about this? What do you think?