Elizabeth Warren to Introduce Bill to Reduce Burden of Student Loan Debt

Sen. Elizabeth Warren wants the next debate in Congress on student loans to focus on helping borrowers refinance their debt.

The Massachusetts Democrat is introducing legislation Tuesday that would open the door for potentially millions of recipients of federal loans to refinance at the same rate current recipients can get. Undergraduates, for example, qualify for loan at a 3.86 percentage rate.

"When interest rates drop, people can refinance their home, they can refinance their business debt. It's regarded as a smart move for any consumer or business. But student borrowers are prohibited from doing that under most programs," Warren told MassLive.com. "This bill says we're going to change that and let them refinance that down to current low rates."

The bill is part of a larger effort by Democrats to focus on college costs leading up to the November election. Reps. George Miller, D-Calif., and John Tierney, D-Mass., were to file a companion bill in the House.

Last year, Congress reached a bipartisan deal that ties federal student loan interest rates to financial markets for students who take out loans, starting last July.

Warren's bill would be paid for by raising taxes on wealthy Americans. It faces many hurdles to passage.

Student loan debt totals more than $1.2 trillion.

"This is an economic emergency, and we can't ignore it any longer," Warren said.

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