House Democrats are launching a new push to ease the financial burden on college students.
Behind House Minority Leader Nancy Pelosi (D-Calif.), the lawmakers introduced legislation that would allow students with high-interest loans to refinance at lower rates.
Democrats are calling on GOP leaders to consider the proposal for the benefit of the middle class while simultaneously accusing them of protecting wealthy special interests at the expense of the nation's students.
"Our Republican colleagues are always talking about [how] we can't heap mountains of debt onto future generations," Pelosi said. "We all agree … but we don't want to heap mountains of debt onto individual American students and their families. And that's where we have this division."
Sponsored by Rep. Joe Courtney (D-Conn.), the Democrats' bill would empower students with high-interest loans — either public or private — to ease their debt obligations by refinancing through the Department of Education.
For undergraduates, the new rate would be 3.8 percent; for graduate students, it would drop to 5.4 percent; and for PLUS loans, the figure would be 6.4 percent.
"This issue is front and center in terms of the worries the middle class has about whether or not they're going to be able to see their younger children succeed and hopefully surpass their parents in terms of thriving growing in the U.S. economy," Courtney said Wednesday.
Pelosi said student debt — which exceeds that of credit card debt — "weighs like an anvil on the lives of hard-working Americans" and limits consumer spending that could help small businesses, reduce unemployment and increase tax revenues.
"Nothing brings more money to the Treasury than investment in education," she said.
Rep. Keith Ellison (D-Minn.) said he met recently with a group of homebuilders who want Congress to lower the student rates for one very specific reason.
"Their story to me was, 'Hey, we've got to do something about this student debt thing, because if we don't we can't sell any houses,' " Ellison said.
The cost of the Democrats' bill would be covered by installing the so-called Buffett Rule, which would apply a minimum 30 percent tax rate to those earning more than $1 million per year. That change would be enough to offset the lower payments to the government, Courtney said, and leave a $20 billion surplus to be used for deficit reduction.
Sen. Elizabeth WarrenElizabeth WarrenArizona Democratic Party executive board censures Sinema Democrats call on Biden administration to ease entry to US for at-risk Afghans Biden stiff arms progressives on the Postal Service MORE (D-Mass.) is expected to introduce a companion bill in the upper chamber this week.
The proposal has little chance of moving through either chamber, however, where Republican leaders have opposed similar measures introduced last Congress.
Democratic leaders declined Wednesday to say whether they'll try to attach Courtney's bill to the Republicans' 2016 budget proposal, which is expected to hit the House floor next week.
"We don't know," said Rep. Steve Israel (N.Y.), head of the Democrats' communications and messaging program, "and we reserve all strategies."