LANSING – State Representative Sarah Roberts (D-St. Clair Shores) introduced House Resolution 98 today urging Congress to help millions of college graduates better manage the massive student loan debt that many will still be paying off when they are in their 50s or 60s.
“If people need a better rate on their mortgage, they can refinance their loan, but college grads can’t refinance a student loan and that leads to seemingly endless debt, late payments and ruined credit scores,” said Roberts. “Student loans typically have interest rates of 7 percent. Grads with outstanding debt should be allowed to refinance at current government-subsidized interest rates, which are below 4 percent.”
According to federal data, student loan debt was $1.3 trillion in 2014, up $100 billion from the previous year. One in five households nationwide is paying student debt, and more than 11 percent of that debt is delinquent. Seventeen percent of those with student loans are 50 or older. Before many graduates can even get a job, they are mired in debt that can keep them from buying home, starting a family or starting a new business. By allowing student loans to be refinanced, graduates would have the same opportunity to manage their loans that other borrowers have when interest rates decline.
“We encourage our young people to get a college education because it will improve their earning power, yet the cost of that education leaves them with crushing debt,” said Roberts. “This isn’t about forgiving student loans; it’s simply about making those loans more affordable for graduates and those students who want to go to college but are fearful of the cost and the debt they will graduate with. Being able to refinance a student loan will help make college more affordable for all students giving them a better shot at enjoying the benefits of their hard work to earn that degree.”