Issue Position: On College Costs and Student Loans

Issue Position

Student loan debt is exploding, creating a crisis that threatens our economy. Outstanding student loans now total more than $1.2 trillion, surpassing total credit card debt -- and every year, students are taking on more.

Federal watchdog agencies are sounding the alarm -- student debt is crushing the middle class. Key federal economic agencies like the Federal Reserve, the Treasury Department, and the Consumer Financial Protection Bureau have weighed in on the dangers of exploding student debt. This debt is stopping a growing proportion of families from buying homes, saving for retirement, and making purchases that will keep our economy on the road to recovery

Young borrowers are failing to keep up with payments. One in seven borrowers defaults on federal student loans within three years of beginning repayment. Other borrowers are just barely keeping their heads above water -- in total, 30% of Federal Direct student loan dollars are in default, forbearance, or deferment.

Most good jobs today require some kind of higher education, but two-thirds of Americans earning bachelor's degrees graduate with debt, and the total student loan debt in this country is now more than $1.2 trillion.

Student loan debt can limit your career choices and make it harder to purchase a home. And it's not just a problem for young Americans; it's also a huge drag on our economy. It hinders economic growth by delaying graduates from buying houses, starting their own businesses, and saving for retirement.

In 2013, interest rates were set to double from 3.4% to 6.8% without Congressional action. There was bipartisan support for keeping student loan interest rates low, but there was no agreement on the pay-for. Democratic proposals cut tax breaks for oil companies while Republican proposals targeted the Affordable Health Care Act and impacted funding for initiatives like child immunization and mammograms for women. In the end, Republicans passed a bill tying loan rates to the spring rate of the 10-year Treasury note. Each year the rates change, but rates are fixed for the life of the loan.

Banks are getting a better deal than students. Even though the federal government is by far the biggest student lender, it offers no refinancing option. With interest rates near historic lows, homeowners, businesses, and even local governments with good credit regularly refinance their debts -- but students have few options.

In an effort to address these issues I am a cosponsor of H.R. 1434, the Bank on Students Emergency Loan Refinancing Act, introduced by Rep. Joe Courtney (D-CT), which would lock in students at a 3.8% interest rate. With 40 million Americans squeezed by this debt, refinancing high interest loans to this year's rates would reduce federal profits and give a much-needed break to young people struggling to build a future.

Additionally, I am a cosponsor of H.R. 649, the Student Loan Refinancing Act, introduced by Rep. Mark Pocan (D-WI), which would allow borrowers to refinance any time a lower interest rate is available.

Efforts like these are just the beginning of addressing the problem of overwhelming student debt, and part of the solution must include addressing the skyrocketing cost of a four year degree also. I stand ready to work hard with anyone ready to tackle these issues and believe it should be done on a bipartisan basis because Republicans and Democrats know this is a huge problem for all of our citizens.

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