News Column

Reid Remarks Calling On Senate Republicans To Support The Bank On Students Emergency Loan Refinance Act

June 10, 2014

Date: Tuesday, June 10, 2014

Contact: Adam Jentleson, (202) 224-2939

Reid Remarks Calling On Senate Republicans To Support The Bank On Students Emergency Loan Refinance Act

Washington, DC - Nevada Senator Harry Reid spoke on the Senate floor today in support of the Bank on Students Emergency Loan Refinance Act introduced by Senators Elizabeth Warren and Al Franken. Below are his remarks as prepared for delivery:

We've all seen the old cowboy-western movies that show some unfortunate character falling into quicksand. It's always the same scene - an unsuspecting person walks into quicksand, panics and flails about as they sink deeper and deeper into the earthy liquid. Eventually, a hero comes to the rescue, using a rope or a branch to pull the victim to safety.

If only it were that easy in real life.

In America today, millions of Americans are caught in financial quicksand, and they are looking for a helping hand to pull them to safety. More than 40 million Americans have outstanding student loans. As their college debt mounts, they sink more and more into financial hardship. These Americans try their best to make good on their students loans, working multiple jobs and pinching pennies. But even the slightest hiccup can plunge them into financial ruin.

The Bank on Students Emergency Loan Refinance Act, introduced by Senators Elizabeth Warren and Al Franken, is a lifeline to those with student loan debt. The bill would provide graduates, who are now beholden to higher interest rates, with a two-year period to refinance to current student loans rates - 3.86% for undergraduates and 5.41% for graduate students. This legislation would allow more than 25 million Americans to refinance expensive student loans. In my home state of Nevada, more than 250,000 student loan borrowers would save thousands in interest fees by refinancing at current rates.

But the problem of mounting student debt is not limited to individual borrowers - it is a problem that threatens our entire economy. Student loan debt now exceeds $1 trillion dollars - that's more than credit card or auto loan debt. As of last September, 40% of student loan dollars were in default, forbearance, or deferment.

Yet, even as many Americans make loan payments on time, the staggering amount of those installments preclude young Americans from buying houses, beginning families, or starting small businesses. This legislation will give borrowers a fair shot at investing in their families and their financial well-being. And as younger Americans are able to purchase new homes and invest in their futures, they will inject much-needed capital into our economy.

Unfortunately, not all Senators agree that allowing borrowers to refinance their student loans is a good idea. In fact, I was disappointed to learn that my colleague, the Republican Leader, does not support this legislation. Not too long ago, he referred to Democrats' proposals to address student loan debt as a "fake fight." For the 25 million Americans who stand to benefit from this bill, I assure my friend that there is nothing fake about helping working families pay off debt and save money. To the single mother working two jobs just to take care of her family and make her student loan payments on time, this legislation is very real. Instead, the Republican Leader has reaffirmed his commitment to the status quo. Why reform today, what he and his party say they'll reform next year?

On the other hand, Senate Democrats are not standing around waiting for a new year or a new Congress to tackle the problem of student loan debt. We are anxious to extend a helping hand to the more than 40 million Americans who are fighting to keep their heads above water. Let's come to the aid of those individuals struggling with student loan debt, and keep them from sinking deeper into financial quicksand.

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Source: Congressional Documents & Publications

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