Senate Republicans Block Bill to Lower Student Loan Payments for Millions of Americans

Tuesday, September 16, 2014

Senate Republicans today blocked legislation co-authored by U.S. Senator Debbie Stabenow that would lower the student loan payments of more than 25 million Americans, including nearly one million in Michigan alone. The Bank on Students Emergency Loan Refinancing Act, introduced by Senator Stabenow, Senator Elizabeth Warren (D-MA), Senator Al Franken (D-MN) and others, would allow people to refinance their existing loans at the lower rates available to new borrowers during the 2013-2014 school year. The effect would be significant savings for borrowers on their monthly loan payments. The legislation is fully paid for and would save taxpayers billions of dollars by enacting the Buffett Rule, which ensures that millionaires and billionaires pay their fair share of taxes. Senate Republicans also blocked the passage of this bill in June.

"It's outrageous that Senate Republicans refuse to even vote on a common-sense bill that would allow nearly one million people in Michigan to save money on their student loan payments. Once again, they stood up for the wealthy and well-connected and ignored the needs of millions of American families." said Stabenow. When you're under a mountain of student loan debt, you can't afford to buy a car, a house, or start a family. Michigan families can't afford this kind of debt, and the country can't afford this kind of drain on our economy."

According to the Project on Student Debt, Michigan ranks in the top ten of states with the highest average student loan debt. In Michigan, the average student loan debt among those who borrow to get a bachelor's degree is nearly $29,000, and 62 percent of Michigan students have debt when they graduate. Many borrowers are stuck with unsustainable levels of student debt for two or even three decades of their lives.

Under the Bank on Students Emergency Loan Refinancing Act, a borrower with $29,000 in public loans at a 7 percent interest rate would save over $5,400 in interest payments over ten years. A borrower with $100,000 in private loans at a 14 percent interest rate would save nearly $155,000 in interest payments over twenty years.