With less than one month until student loan borrowers face the potential of adding more than $5,000 to their already onerous federal student loan debt, U.S. Rep. Karen Bass (D-Calif.) introduced legislation today to help ease the burden on graduates who are experiencing additional financial hardships due to unemployment.
The Graduate Success Act seeks to provide relief to unemployed college graduates by offering the option to defer the interest on their unsubsidized federal student loans for up to three years or suspend the interest during periods of unemployment for borrowers participating in the Income Based Repayment Program.With more than 13 million Americans out of work and for the first time in our nation's history student loan debt now exceeds credit card debt, this legislation is intended to provide realistic fiscal solutions for graduates as they look for work and the economy recovers.
"Although we are seeing growth in the private sector job market, recent grads are set to enter one of the worst job markets our country has experienced in decades," said Bass. "We teach our children that the key to success is getting a good education, therefore we should not ask them to carry the burden of insurmountable debt when they graduate, especially in a recovering economy."
With 22 original co-sponsors, the Graduate Success Act prevents interest costs from compounding on loans for grads seeking work or who have lost their job through no fault of their own. This bill affords unemployed graduates the opportunity to pay for necessary bills like rent and utilities without the stress of worrying about the amount of their loan increasing.
In addition to the Graduate Success Act, Bass also supports other legislation proposed by Democratic Members of Congress that seek to ease the strain on students' pockets including Rep. Hansen Clarke's Student Loan Forgiveness Act of 2012 which provides full loan forgiveness for current borrowers who have paid the equivalent of 10 percent of their discretionary income for 10 years or who are able to do so over the coming years, and U.S. Rep. Joe Courtney's (D-Conn.) proposal to permanently cap Stafford Loan interest rates at 3.4 percent in order to make a college education attainable for students of all economic backgrounds.