U.S. Senator Kirsten Gillibrand is calling for passage of a bill that would allow college graduates to refinance student loans at a lower rate. The national student loan debt is at roughly $1.2 trillion, surpassing auto loan and credit card debt.
The Bank of Students Emergency Loan Refinancing Act would allow graduates to refinance their federal and private undergraduate degree loans at 3.86%. It would also allow grads to refinance their graduate degree loans at 5.41%. If passed the legislation is expected to reduce the debt burden and provide a boost the economy.
In Western New York, an estimated 12.8% of student loan holders have balances 90+ days delinquent, and over 200,000 residents aged 18-34, or 59% have some sort of post high school education.
Gillibrand says she believes it’s unfair that other loans have the ability to be refinanced except for student loans. She says saddling students with unmanageable debt is bad for the nation’s economy.
“Nearly 12% of graduates nationwide are delinquent in their student loan repayments. Many graduates have hard choices to make. Some hold off on buying their first home, or starting a family, or delaying their small business venture, because they have loans and they have to pay them off and they have to afford basic living expenses. We have to do something to keep student loan interest rates low and manageable so that are hardworking young people can get ahead instead of further behind from the spiral of debt,” said Gillibrand.
Gillibrand says the money graduates save in interest charges could be used to boost local economies. The bill will be voted on this June.