January 21, 2014

Sen. Warren Begins New Push to Reduce Student Loan Burden

Announces Plan to Introduce Legislation to Assist Borrowers in Refinancing High Interest Rates on Loan Debt

BROCKTON, MA - During a roundtable with faculty and students at Massasoit Community College in Brockton today, United States Senator Elizabeth Warren (D-Mass.) announced her intention to introduce legislation to help reduce the growing student loan burden that is burying graduates in debt and acting as a drag on our economic growth. Warren discussed the importance of allowing student loan borrowers to refinance their old, high-interest rate loans at the lower rates that are being offered to new student loan borrowers this year under the new Bipartisan Student Loan Certainty Act of 2013.

Senator Warren highlighted the $1.2 trillion in total national student loan debt and called for action to reduce the student debt burden.

"Student debt is keeping young borrowers from buying homes, buying cars, and saving for retirement," Senator Warren said. "The evidence is clear: we can't build a strong middle class and a thriving economy if young people are drowning in debt."

The senator noted that an undergraduate student who took out an unsubsidized federal loan before July 1 is paying almost seven percent interest. After July 1, that same borrower would pay just under 4 percent.  Most borrowers who took out loans in the last decade are paying substantially higher rates than they would if they took out those same loans today.

"Families expect to be able to refinance their mortgages, and they should expect to be able to refinance their student loan debt too," said Senator Warren. "The federal government is making obscene profits on its student loan programs. Refinancing old loans at the lower interest rates that are available this year to new borrowers would wring some of those profits out of the system while giving a much-needed break to young people struggling to build a future while managing crushing student loan debt."

The event at Massasoit Community College is part of Senator Warren's "Priorities for the Future" tour of Massachusetts this week. The senator will continue to discuss college affordability at a roundtable with students at UMass Amherst on Wednesday.