Student loans. For many Americans, they are a way of life. On the one hand, they’re a ticket to a better future, offering the hope of more satisfying – and often more lucrative – career options open to college graduates. On the other hand, Americans often spend many of their productive years scrimping to pay the loans off. Worse, some fail to finish college and still face a mountain of student loan debt. Some lawmakers are saying it’s time to do something about it.
This Sunday, Sen. Kirsten Gillibrand said, “All of us here are urging the president to make a commitment to help tackle the mountain of student debt that is crippling the lives of so many of our young people.”
These comments were made in the hope of persuading President Barack Obama to address the issue of student debt in his State of the Union address this Tuesday.
Student loan debt has tripled since 2004 and is the second largest form of consumer debt in the country – behind home mortgages – according to Sen. Kirsten Gillibrand’s website. All told, nearly 40 million Americans owe more than $1.2 trillion on their student loans.
To combat the negative effects of student debt, Sen. Gillibrand sponsored the Federal Student Loan Refinancing Act in May. The bill, co-sponsored by Democratic Senators Sherrod Brown (D-OH) and Richard Blumenthal (D-CT), proposes to allow students to refinance student loans with interest rates higher than 4 percent.
According to Sen. Gillibrand, this will affect nearly 90 percent of student loans. The Associated Press reports Gillibrand saying that most student loans currently have an interest rate higher than 6 percent.
It is currently against the law for students to refinance federal student loans.
According to Gillibrand, passing this legislation is not only “the right thing to do,” but will give the economy a boost by affording those paying on student loans more disposable income.
At the time of this writing, the Federal Student Loan Refinancing Act has been read twice and referred to the Senate Health, Education, Labor and Pensions Committee, chaired by Sen. Tom Harkin (D-IA). Sen. Lamar Alexander (R-TN) is the ranking Republican on the committee, which consists of 11 Democrats, 10 Republicans and one Independent. The bill has not yet been brought to the Senate floor for a vote. You can track the bill’s progress and find information about how to contact your senator to express support or opposition for the bill here.
What do you think? Tell us in the comment section below. Better yet, contact your senators and let them know. Should the president address this issue in his State of the Union address? Is Sen. Gillibrand’s bill the best way to address our nation’s mounting student loans?