WASHINGTON – Today, Oregon’s Senator Jeff Merkley teamed up with Senator Elizabeth Warren to introduce the Bank on Students Emergency Loans Refinancing Act, which will allow students paying high interest rates on student loans to refinance both public and private federal loans at a fixed, lower interest rate.
“In this country, if you work hard, there should be a path to a better future,” Merkley said. “As the first in my family to attend college, I’m well aware of the financial challenges but also of the tremendous pay-offs of higher education. Making college affordable is essential to creating a stronger middle class. We cannot let college become a luxury. We cannot let fear of debt hold back our kids from pursuing their dreams.”
The Warren-Merkley legislation builds on Senator Merkley’s ongoing efforts to promote college affordability and to reduce student debt. Senator Merkley is the lead sponsor of the Pay It Forward Guaranteed College Affordability Act, which would explore the model developed by Oregon students to replace loans with “Pay It Forward” grants in exchange for a commitment to pay a small percentage of future income back into a fund for the next generation. Last week, Senator Merkley cosponsored the Federal Student Loan Refinancing Act to provide a refinancing window for students and graduates with federal student loans at high interest rates. This new legislation adds to these efforts by expanding refinancing options to private loans in addition to public loans. The bills come in advance of an expected June debate on college affordability on the Senate Floor.
Student loan debt has nearly tripled since 2004, with the overall student debt held by Americans topping $1 trillion and the average Oregon graduate with loans facing more than $24,000 in debt upon graduation.
The Bank on Students Emergency Loans Refinancing Act would permit eligible student borrowers to refinance their loans this year at a rate of 3.86 percent, a rate approved by both Republicans and Democrats last summer under the Bipartisan Student Loan Certainty Act. The cost of refinancing will be fully covered in this bill by implementing the Buffet rule, closing tax loopholes for millionaires and billionaires.