Senate Dems push student loan relief

 

Senate Democrats are looking to provide relief on student loans as part of their legislative push for the midterm elections.

Twenty-three Democrats unveiled a measure Tuesday that would allow borrowers to refinance their student loan debt to take advantage of lower interest rates. It would cover the costs by implementing the “Buffett Rule,” which would raise taxes on the wealthy to ensure they pay the same rate as the middle class.

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Sen. Elizabeth WarrenElizabeth WarrenOvernight Health Care: Nearly 100,000 children tested positive for coronavirus over two weeks last month | Democrats deny outreach to Trump since talks collapsed | California public health chief quits suddenly On The Money: Administration defends Trump executive orders | CBO reports skyrocketing deficit | Government pauses Kodak loan pending review Harris favored as Biden edges closer to VP pick MORE (D-Mass.), a vocal critic of the rise in student loan debt, is leading the election-year charge.

“Exploding student loan debt is crushing young people and dragging down our economy,” she said in a statement. “Allowing students to refinance their loans would put money back in the pockets of people who invested in their education.”

The measure enjoys broad support from Democrats, pulling in liberals like Warren as well as centrists such as Sens. Heidi HeitkampMary (Heidi) Kathryn Heitkamp70 former senators propose bipartisan caucus for incumbents Susan Collins set to play pivotal role in impeachment drama Pro-trade group launches media buy as Trump and Democrats near deal on new NAFTA MORE (N.D.) and Mary LandrieuMary Loretta LandrieuBottom line A decade of making a difference: Senate Caucus on Foster Youth Congress needs to work to combat the poverty, abuse and neglect issues that children face MORE (La.). It also enjoys the support of top Democrats, like Majority Whip Dick DurbinRichard (Dick) Joseph DurbinThe Hill's Morning Report - Presented by Facebook - Negotiators signal relief bill stuck, not dead White House officials, Democrats spar over legality, substance of executive orders Sunday shows - Trump coronavirus executive orders reverberate MORE (Ill.) and Senate Budget Committee Chairwoman Patty MurrayPatricia (Patty) Lynn MurrayPelosi huddles with chairmen on surprise billing but deal elusive House approves two child care bills aimed at pandemic GOP, Democratic relief packages B apart on vaccine funding MORE (Wash.).

The Democratic unity behind the bill comes after many left-leaning members of the party split over student loan legislation enacted in 2013.

That measure tied rates on new loans to financial market fluctuations, and several Democrats opposed the plan, calling for lower fixed rates instead.

The new measure could nearly halve the interest rates on student loans for some borrowers. Democrats noted that many borrowers are paying off outstanding loans with rates around seven percent, and the bill would let them refinance at rates for new loans, which stand at 3.86 percent currently.

Furthermore, borrowers who have private student loans would be able to refinance into the federal program.

Given that the legislation hinges on hiking tax revenue, it is unlikely to gain any bipartisan traction. Instead, it likely will serve as another messaging tool for Democrats heading into the midterm election, as the party battles to retain control of the Senate.

Growing student loan debt, which now stands over $1 trillion and has surpassed credit card debt as the largest source of consumer debt, has becoming a growing rallying cry for Democrats. Warren noted when she unveiled the legislation that one in seven borrowers default on their loans within three years of beginning repayment, and the government is poised to make $66 billion on borrowers who have government loans.