U.S. Sen. Sherrod Brown, D-Ohio, announced his ongoing co-sponsorship of the Bank on Students Emergency Loan Refinancing Act, legislation aimed at allowing people with outstanding student loan debt to refinance at the lower interest rates offered to new borrowers. The measure has resurfaced in the 114th Congress.
Many borrowers with outstanding student loans have interest rates of nearly 7% or more for undergraduate loans, while students taking out new federal undergraduate loans pay a rate of 3.86% under the Bipartisan Student Loan Certainty Act passed by Congress in 2013, according to a news release.
The Bank on Students Emergency Loan Refinancing Act will allow students and graduates to pay back their outstanding loans at the same rates that Senate Republicans strongly embraced in 2013 as appropriate for new borrowers.
The Bank on Students Emergency Refinancing Act could lower payments for millions of those individuals with outstanding student loans by hundreds or thousands of dollars a year, according to Brown.
"Higher education is a pathway to economic opportunity but the burden of excessive student loan debt can prevent college graduates from saving, starting businesses or buying homes," Brown said in a news release. "Despite the low interest rate environment, many graduates are trapped in high interest rate loans. Ensuring that students and graduates can refinance their loans for more affordable monthly payments will allow them to provide for their families and invest in their communities."Sen. Elizabeth Warren, D-Mass., originally introduced the Bank on Students Emergency Loan Refinancing Act nearly a year ago. It failed in the Senate last June to get the required 60 votes needed to advance the bill.
The Obama administration estimated that the bill could help 25 million borrowers save $2,000 over the lifetime of their loans. The president has touted the legislation in the past when he signed an executive order to allow people who took out federal loans before 2007 to pay no more than 10% of their income in monthly payments.