Student loan debt in America currently totals $1.2 trillion, and is rising quickly. As graduation day approaches, the class of 2014 might be feeling less than hopeful about their future, faced with a less-than-stellar job market and tens (or hundreds) of thousands of dollars of debt accrued in the process of getting a degree. Massachusetts Senator Elizabeth Warren is working hard to give those students a chance at a life that’s not defined by endless interest payments and constant phone calls from debt collectors. On Tuesday, she filed a bill in the Senate that would allow students to refinance their loans at the current rate (which is 3.86% right now).
“This is an economic emergency, and we can’t ignore it any longer,” she said.
While this bill isn’t a cure-all for the student loan debt crisis, it would definitely provide some much-needed relief for students who are drowning in debt and paying unnecessarily high interest rates. Warren’s plan, which would be paid for by raising taxes on millionaires, could save students thousands of dollars and reign in help reign in escalating interest rates, especially on private loans. If it passes, anyone could refinance their student loan debt, no matter what the rate was when they took it on.
“When interest rates drop, people can refinance their home, they can refinance their business debt,” Warren told MassLive.com. ”It’s regarded as a smart move for any consumer or business. But student borrowers are prohibited from doing that under most programs. This bill says we’re going to change that and let them refinance that down to current low rates.”
The bill serves another function as well: to force Congress to pay attention to the mounting student loan debt crisis. Democrats plan on making student loans a cornerstone of their fall campaigns. Even if Warren’s bill doesn’t pass, it puts the issue in the spotlight (but for the record, we really hope it does).
Senator Warren, keep kicking ass.