The bill, which Durbin co-sponsored, allows current loan holders to refinance to a lower interest rate. A vote is expected on the bill when the
"Student debt has reached the breaking point in this country. Far too many young people are looking at a lifetime of debt just because they wanted to do the right thing and get a college degree," Durbin said. "Reasonable borrowing has long been part of keeping higher education affordable. The bill which I co-sponsored earlier this year will help ease that burden by allowing them to lower their interest rates. The
Many borrowers with outstanding student loans have interest rates of nearly 7 percent or higher for undergraduate loans, while students who took out new undergraduate loans last year paid a rate of 3.86 percent under bipartisan legislation passed by
The bill allows borrowers with federal FFEL loans or Direct Loans taken out prior to
Private loan borrowers will also be eligible to refinance. To do so, the bill allows the federal government to purchase private loans from lending institutions and reissue them as federal loans at lower interest rates.
Private student loans often have uncapped variable interest rates, hefty origination fees and few, if any, consumer protections.
The legislation would be fully paid for by enacting the Buffett Rule, which would limit special tax breaks for the wealthiest Americans that allow millionaires and billionaires to pay lower effective tax rates than middle class families.
There are nearly 1.7 million Illinoisans with outstanding student loans. The average student loan debt for
The refinancing bill was the third in a series of proposals introduced by Durbin, Warren, and U.S. Senator
The Student Loan Borrower Bill of Rights Act would ensure struggling student loan borrowers are treated fairly and understand the full range of repayment options and resources available to them. The Protect Student Borrowers Act of 2013 would help make institutions of higher education more accountable for student indebtedness by requiring institutions to assume some of the risk of a student loan default.
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