WASHINGTON, D.C. – U.S. Senators Tom Udall and Martin Heinrich joined Senator Elizabeth Warren in introducing the Bank on Students Emergency Loan Refinancing Act that would allow those with outstanding student loan debt to refinance at the lower interest rates currently offered to new borrowers. Outstanding student loan debt in America totals more than $1.4 trillion. In New Mexico, students are graduating with an average of nearly $20,000 in debt and 134,000 federal student loan borrowers would benefit from loan refinancing.
“Higher education is more important than ever for students to get the skills they need to succeed in the 21st century economy, but too many New Mexico students face mountains of crippling student debt after graduation,” Udall said. “Students in New Mexico are struggling to pay these loans and have some of the highest loan default rates in the country. This bill offers a commonsense approach to bring some relief to students so they can focus on investing in their futures and building our economy.”
“Crushing student loan debt is a serious economic issue in this country that prevents many from starting a family or business, and impedes many others from saving for retirement,” said Heinrich. “By helping borrowers refinance their student loans and pay down their debt at a lower rate, graduates in New Mexico and across the country will have a better chance at building a brighter economic future.”
A previous version of the bill was voted on in the 113th Congress, and every Senate Democrat and three Senate Republicans voted to move the bill forward, falling just short of breaking a Republican filibuster. Since the original bill was introduced, student loan debt has grown by about $200 billion. In 2015, 70 percent of college seniors graduated with debt. And this year, more than one in four borrowers are in delinquency or in default on their student loans. According to a recent analysis, a quarter of borrowers default over the life of their loans. It is clear that the student loan debt crisis is getting increasingly worse, with no signs of slowing down. It is a crisis that threatens our economy, and the futures of young people all across America. With interest rates scheduled to rise again this summer, the urgency for Congress to address the student debt crisis and to allow borrowers to access today's lower rates is stronger than ever.