News

Senate dems offer student loan refinance bill

Senate dems offer student loan refinance bill

PAYING IT BACK:Senator Elizabeth Warren (D-MA) questions U.S. Federal Reserve Vice Chair Janet Yellen (not pictured) during a Senate Banking Committee confirmation hearing. Photo: Reuters

By Thomas Ferraro

WASHINGTON (Reuters) – U.S. Senate Democrats unveiled legislation on Wednesday to allow millions of Americans with student loan debt to refinance at lower interest rates.

Democrats said their measure would let holders of both federal and private undergraduate loans – some with rates of 9 percent or higher – to refinance at 3.86 percent.

Drafted in coordination with the White House, the bill is part of Senate Democrats’ 2014 legislative agenda aimed at giving all Americans “a fair shot” and rallying the party’s liberal base in advance of the November elections.

But like earlier rejected measures to raise the minimum wage and renew expired long-term jobless benefits for millions of Americans, it faces Republican opposition that could kill it.

“This bill would be hugely expensive,” said Republican Senator Jeff Flake of Arizona. “I don’t think it will be seriously considered.”

Democrats control the Senate, 55-45, but need 60 votes to clear Republican procedural hurdles.

Democratic Senator Elizabeth Warren, a chief sponsor of the bill, said she expected bipartisan support.

“Student loan debt is a real and growing crisis that is crushing young people and dragging down our economy,” Warren said.

“When interest rates are low, homeowners, businesses and even municipalities refinance their debt. But right now the government doesn’t offer a refinancing option to students,” she noted. “Allowing students to refinance their loans would help give them a fair shot at an affordable education.”

Last year, Congress approved the Bipartisan Student Loan Certainty Act of 2013, which set the undergraduate student loan interest rate at 3.86 percent for the current school year.

Democrats said the nonpartisan Congressional Budget Office will determine the cost of their bill, which would permanently let student-loan borrowers refinance at the going rate.

Democrats propose that the cost of their bill be offset by reducing tax breaks for millionaires.

Democrats cited federal data showing that student-loan debt grew by $31 billion from January to March, to total $1.1 trillion, making it the fastest-growing household debt category.

Overall, about 40 million Americans have student loan debt, Democrats said.

(Reporting by Thomas Ferraro; Editing by Dan Grebler and Eric Walsh)

Recent Headlines

in Music

Concert-goes hospitalized during Keith Urban show

Keith Urban arrives at the 56th annual GRAMMY Awards at Staples Center on Sunday, Jan. 26, 2014, in Los Angeles.

Things got a bit crazy at Keith Urban's Massachusetts show on Saturday night.

in Entertainment

Fans support campaign to keep Sean Bean alive in new show

British actor Sean Bean arrives for a special UK screening of Cleanskin, at the Mayfair Hotel in central London, Monday, March 5, 2012.

The "Game of Thrones" actor has died more than 20 times in his career, and fans want it to stop.

in Entertainment

‘Guardians of the Galaxy’ sequel set for 2017

Guardians Of The Galaxy

Marvel unveils plans to press ahead with a sequel to "Guardians of the Galaxy," days before the superhero movie even hits theaters.

in Entertainment

‘Lucy,’ ‘Hercules’ beat expectations at box offices

This image released by Paramount Pictures shows, from left, Aksel Hennie as Tydeus, Ingrid Bolsø Berdal as Atalanta, Dwayne Johnson as Hercules, Reece Ritchie as Iolaus, and Rufus Sewell as Autolycus in a scene from "Hercules."

Scarlett Johansson's "Lucy" collected $44 million at the domestic box office, outmuscling "Hercules" which took in $29 million.

in Viral Videos

Baby elephant meets a cat

Elephant Meets Cat

Maybe this elephant is more of a dog lover?