Early summer is usually the designated time of year to get down to student loan business on Capitol Hill, attempting to beat whatever impending change will go into effect on July 1st. This year the beginning of classes also stirred up more on the student loan debate.
Senator Elizabeth Warren’s bill, the Students Emergency Loan Refinancing Act, would have amended the Higher Education Act of 1965 to provide for the refinancing of certain Federal student loans. The change would’ve allowed those with loans acquired before 2010 to refinance to an interest rate below four percent. Additionally, the funding was designed to implement the “Buffet Rule,” which basically would’ve subsidized a student loan repayment $1 a day (saving the average debtor $2,000 over the life of the loan) by raising taxes on those who make more than $1 million annually. Opponents disagreed with this funding method as well as with freezing interest rates for past students while rates on current/new loans would continue to rise. Other issues included allowing private loans to be refinanced as federal loans. The bill was killed due to a failed vote for cloture (cloture deals with filibustering) in June and again on September 16th.
Also brought to the table this summer and is awaiting action within the Senate Finance Committee is the Dynamic Repayment Act of 2014 spearheaded by a bipartisan team – Senators Warner and Rubio. This bill would create an income contingent repayment, providing stronger protections for borrowers, encourage responsible borrowing, and save taxpayer dollars. The stark contrast from Warren’s bill is that instead of letting borrowers off the hook for the full amount of their payment, it ensures borrowers will make their full payment by automatically deducting ten percent of a graduate’s paycheck with a $10,000 annual exemption. Opponents argue that this automatic deduction could stretch already thin paychecks even thinner.
Some speculate that proposed legislation such as these will continue to be moved throughout the fall because many desire to have the issue pushed to the forefront of the election. Considering the looming state of the student loan debt crisis, this topic will likely be heavily debated regardless of these bills’ statuses.
Will what the candidates say specifically on student loans sway how you will vote this upcoming election?
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