News Column

As Vote Nears, Heitkamp Makes the Case for Allowing North Dakotans to Refinance Student Loans During Senate Hearing

June 10, 2014

WASHINGTON, June 10 -- The office of Sen. Heidi Heitkamp, D-N.D., issued the following news release:

U.S. Senator Heidi Heitkamp today used a Senate Banking Committee hearing to make the case for a proposal to allow North Dakotans with existing student loan debt to refinance to lower interest rates.

Her remarks to other Senators and Director of the Consumer Financial Protection Bureau (CFPB) Richard Cordray come a day before the Senate will vote to move forward with the Bank on Students Emergency Loan Refinancing Act. Heitkamp helped introduce the legislation last month. The legislation would enable 63,000 North Dakota student loan borrowers refinance to lower interest rates.

"Not a week goes by where I don't hear from a North Dakotan who is struggling to keep up with student loan payments. With record-low interest rates, there is no reason why our young people shouldn't be able to refinance their education loan debt," said Heitkamp. "Because of the help I received from student loans, I was able to pay for my higher education. We need to make sure student loans are readily available, but must also avoid burdening students with excessive debt for decades. That is why I'm pushing to move our bill forward tomorrow, and I hope Senators from both sides of the aisle will join together to stand up for our students by voting for this bill."

Many borrowers with outstanding student loans have interest rates of nearly 7 percent or higher for undergraduate loans, while students taking out new undergraduate loans pay a rate of about 3.86 percent. The Bank on Students Emergency Loan Refinancing Act would allow our students to refinance to the lower rates Congress overwhelmingly embraced just last summer for new borrowers.

According the Project on Student Debt, which is part of the Institute for College Access & Success, North Dakota students have some of the highest rates of indebtedness in the country, as 83 percent of the class of 2011 graduated with some form of debt -- the most of any state that year.

Additionally, student loan debt is the second highest form of consumer debt, now at $1.2 trillion. It is hurting the economy and preventing young people and families from buying homes, buying cars, and starting businesses. Heitkamp's bill would help relieve the burden of student debt, by reducing interest rates for thousands of North Dakota students.

The CFPB, established in 2011, works to give consumers the information they need to understand the terms of their agreements, including student loans, with financial companies. The Bureau offers many tools to help students better understand what to consider when taking out student loans, and paying them back. These tools help students:

* Understand the benefits and risks of different types of loans

* Compare college costs and financial aid offers between many schools at once

* Know what consider when shopping for a private loan

* Understand what they will need to do to pay off their loans

Heitkamp is a strong supporter of both making higher education more affordable, and making it easier for North Dakotans to finance their studies without saddling them with an insurmountable amount of debt. She has traveled across the state to meet with students and administrators to discuss the importance of student loans and the effect indebtedness has on today's graduates. Last year, Heitkamp introduced a plan to help students with costly private student loans refinance to more affordable rates. She also called on the Administration to investigate companies that try to mischaracterize government loan programs as their own, and charge students fees to use government services that are actually free.

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Source: Targeted News Service

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