Pocan Introduces Legislation to Let Students Refinance Their College Loans
MADISON, WI—As students across south central Wisconsin arrive on campus for a new school year, they return with a higher likelihood than ever before of graduating tens of thousands of dollars in debt. In response to the student debt crisis that is pricing students out of a college education and crippling our economy, U.S. Rep. Mark Pocan (WI-02) today introduced student loan refinancing legislation on the UW-Madison campus to help make college more affordable. Pocan’s bill, H.R. 3047, would allow anyone with a federal student loan to refinance so they are paying the lowest interest rate available for their respective loans.
“Instead of relying on college graduates to bankroll Washington’s needs, the federal government should be doing all that it can to make a college education as affordable and accessible as possible,” Pocan said. “Two-thirds of Americans now leave college drowning in debt, unable to achieve their dreams or contribute to the economy in a meaningful way. My bill will allow nearly 40 million Americans to refinance their student loans, just like you can refinance a house or car loan, freeing up funds to buy a house, get a new car, support a family, and pursue greater economic opportunities.”
Today, 83 percent of the more than $1.2 trillion in total student debt in this country is from federal student loans, but students face limited options to refinance their federal loans once they have graduated from college. Pocan’s legislation would remove the current restrictions, allowing anyone with a subsidized or unsubsidized federal Stafford loan, or a federal direct PLUS loan, to refinance their interest rate whenever the borrowing rates are reduced.
According to the New York Federal Reserve, total student debt has tripled over the past eight years, and now exceeds all credit card debt in this country. The average student debt held by the class of 2011 in Wisconsin is more than $26,000, with 67 percent of students graduating in debt. A study from One Wisconsin Now found it will take Wisconsinites, on average, almost 19 years to pay off their student loan debt from a four-year university. Money used to pay off the high interest rates on student loans is money that instead could be spent on major purchases such as a home or a new car.
“A strong economy demands an educated workforce and a robust middle class, and students are taking responsibility for paying for their education and job training,” said One Wisconsin Now Executive Director Scot Ross. “Congressman Pocan's plans to help hardworking borrowers get a fair shot at the middle class instead of a multi-decade student loan debt sentence are the kind of common sense solutions we need to fix the trillion dollar student loan debt crisis.”
H.R.3047 has been referred to the House Committee on Education and the Workforce.