On Monday, President Obama signed an executive order which would extend the ability to cap one’s student loan repayment amount at 10 percent of one’s income, finally allowing those who borrowed money before 2007 to take advantage of an opportunity many have already capitalized on. Following his own executive order, Obama continued to push student-loan legislation, however, as he endorsed Senator Elizabeth Warren’s new bill which seeks to lessen the burden on student loan borrowers across the country.
The bill, titled Bank on Students Emergency Loan Refinancing Act, is co-sponsored by two other Democratic Senators – Al Franken of Minnesota and Dick Durbin of Illinois. Simply put, the bill’s mission is to help student loan borrowers reduce the interest rates on their student loan repayments. Currently, federal student loan interest rates are at 3.86 following the passage of a law which tied undergraduate student loan interest rates to the rates on Treasury bonds.
— Elizabeth Warren (@elizabethforma) June 7, 2014
If passed, Senator Warren’s bill would allow those who are currently paying the old federal student loan interest rate of 6.8 percent to refinance their loans to include the lower rate of 3.86 percent. The American Federation of Teachers estimates that this shift in interest rates would save students a total of $14 billion.
Senator Warren’s bill comes on the heels of the release of her new book, A Fighting Chance, in which Warren discusses her poor upbringings and how the United States can help the middle classes and lower to achieve the American Dream once again: “I’m here … to give each one of our kids a fighting chance to build a future full of promise and discovery,” Warren states in her book.
— On Point – NPR (@OnPointRadio) June 10, 2014
While the bill will have much popular support from the millions of people suffering from student loan debt in the United States (the second largest debt next to mortgages), it is going to face much opposition from the Republicans in Washington, many of whom see the bill as a disingenuous political push: “This bill doesn’t make college more affordable, reduce the amount of money students will have to borrow, or do anything about the lack of jobs grads face in the Obama economy,” complained Senate Minority Leader Mitch McConnell.
House Speaker John Boehner echoed the sentiments of McConnell, stating, “Today’s much-hyped loophole closure does nothing to reduce the cost of pursuing a higher education or improve access to federal student loans — nor will it help millions of recent graduates struggling to find jobs in the Obama economy.”
With 55 Democrats in the Senate and 60 votes needed to pass the bill, Senator Warren will have to be rhetorically savvy in the next two days in order to help push her bill through during the vote on Wednesday.
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