News Column

Mikulski Calls on Senate to Pass Legislation Allowing Students to Refinance Student Loans Giving Families Fair Shot at Affordable Education

June 10, 2014



WASHINGTON - U.S. Senator Barbara A. Mikulski (D-Md.) today called on the Senate to pass the Bank on Students Emergency Loan Refinancing Act, legislation she cosponsored which would allow 481,000 Maryland students and families with outstanding student loan debt to refinance at the lower interest rates currently offered. The Senate is expected to take a procedural vote on the bill on Wednesday.

"Middle class families and their children deserve a fair shot at higher education. Students deserve fair, affordable loans to help them get the education they need to succeed," Senator Mikulski said. "Right now, millions of American students are graduating from college and universities but as they are handed their diplomas, they are being handed a lifetime of debt. Getting a college education is the core of the American dream. I'm fighting to make sure that every student has access to that dream."

The Bank on Students Emergency Loan Refinancing Act, legislation introduced by Senator Elizabeth Warren (D-Mass.), would lower student loan payments for the more than 25 million students with outstanding loan debt by hundreds of thousands of dollars a year. The average student loan debt among those who borrow to get a bachelor's degree is nearly $30,000 - and a shocking 30 percent of Federal Direct student loan dollars are in default, forbearance or deferment. Meanwhile, the Government Accountability Office (GAO) recently projected that the government will bring in $66 billion in revenue on its federal student loans made between 2007 and 2012.

The ballooning student debt rate is creating a drag on the U.S. economy. As student loan debt has risen, home ownership and car ownership have declined for young households. Keeping the cost of borrowing low will help reduce the amount students owe and help give them purchasing power that can improve our overall economy.

Senator Mikulski's remarks submitted to the Congressional Record, follow:

"I am proud to support the Bank on Students Emergency Loan Refinancing Act. This bill would allow eligible students to refinance their federal loans, transfer private loans into federal loans with better interest rates, and eliminate tax loopholes for millionaires and billionaires. This bill would help more than 25 million students in the United States, including 481,000 student borrowers in Maryland.

"Middle class families and their children deserve a fair shot at higher education. Students deserve fair, affordable loans to help them get the education they need to succeed, and the working women of America deserve a fair shot at fair pay with equal pay for equal work. Right now, millions of American students are graduating from college and universities. But as they are handed their diplomas, they are being handed a lifetime of debt. The average student debt for 2012 college graduates was $29,400 and for the first time in U.S. history, student loan debt topped credit card debt at $1 trillion. When you're fresh out of college and paying living expenses and investing in a 401(k), these loans add up and become burdensome.

"This especially affects young women struggling to pay debts against a wage gap. College educated women earn just 82 cents for every dollar a man makes, but they don't get an 18 percent wage gap discount on their student loans. How can we expect women to achieve their dream when they are burdened with crippling debt and fighting against a wage gap that continues to grow over time?

"Recently, a Maryland woman wrote to me. She is a single mother and was on welfare for nine months after giving birth to her son, but said she did not want to become a statistic. She pursued higher education so she could improve her life. She got a bachelor's degree and a master's degree, and graduated in the top five percent of her class. While attending school, she worked full time and raised her son. She enrolled in an income-based loan program and despite paying more than requested each month, her interest rate has increased. She cannot care for her son and pay off $63,000 in student loans without assistance in refinancing her loans.

"The women of America want more. Women make up almost half of the workforce and 40 percent are the sole breadwinners for families, but still only make 77 cents for every dollar a man makes. African American women earn 62 cents and Hispanic women earn 54 cents. Even if she has the same grades, degree and job title, women are consistently paid less in their first job out of college. On average, women will lose more than $431,000 over their lifetimes because of the wage gap. This doesn't just affect student loans. It affects their contributions to Social Security, pensions, and retirement security.

"I am so proud of America's women. We have accomplished so much. We have gone to space, become CEOs of Fortune 500 Companies and even made it the United States Senate. Today, women are graduating from higher education in record numbers. It's time to help them get a fair shot at achieving their dreams. That starts with equal pay.

"Getting a college education is the core of the American dream. I'm fighting to make sure that every student has access to that dream. Let's work together to make sure that when students graduate, their first mortgage isn't their student debt. Carrying the burden of student loans drags down young people's financial futures making it harder to buy a home, start a family, or save for retirement. I support Senator Warren's bill because it reduces debt and fights for American families. It lowers interest rates, giving everyone a fair shot at repaying their loans for a more secure financial future.

"I've said this often, but we in this country enjoy many freedoms: the freedom of speech, the freedom of the press, the freedom of religion. But there's an implicit freedom our constitution doesn't lay out in writing, but its promise has excited the passions, hopes, and dreams of people in this country since its founding. The freedom to take whatever talents God has given you, to fill whatever passion is in your heart, to learn so you can earn and make a contribution - the freedom to achieve.

"When I was a young girl at a Catholic all-girls school, my Mom and Dad made it clear they wanted me to go to college. But, right around graduation, my family was going through a rough time because my Dad's grocery store had suffered a terrible fire. I offered to put off college and work at the grocery store until the business got back on its feet. My Dad said, 'Barb, you have to go. Your mother and I will find a way, because no matter what happens to you, no one can ever take that degree away from you. The best way I can protect you is to make sure you can earn a living all of your life.' My father gave me the freedom to achieve. And this legislation will give millions of Americans that same freedom without adding a dime to the deficit.

"Senator Warren's legislation should be passed in a swift, expeditious, and uncluttered way. It gives our students access to the American dream. It gives our young people access to the freedom to achieve, to be able to follow their talents, and to be able to achieve higher education in whatever field they will be able to serve this country.

"While our work isn't done when it comes to ensuring access to affordable higher education, this bill helps us get there. While these bills will fix the problem today, I will continue to work with my colleagues to figure out a longer-term solution."

Read this original document at: http://www.mikulski.senate.gov/media/pressrelease/6-10-2014-2.cfm


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Source: Congressional Documents & Publications


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