Fear not, young ladies and gents, I have good news. There's at least one person in Congress who's looking out for students currently struggling through debt in order to better their life.
The bad news is that having just one member of Congress on the lookout means it'll be years before anything actually happens. We can only hope that Congress acts before the student debt bubble gets too big (though, it's already well over $1 trillion) and causes the market to crash once again. And we all know how good Congress is with deadlines that will supposedly cripple the economy.
Sen. Sherrod Brown (D-Ohio) will unveil as early as today a proposal to grant the secretary of the treasury, a position Jack Lew now occupies, the authority to create a government-backed financing vehicle that could enable millions of distressed borrowers to refinance student debt not guaranteed by the government into new loans with significantly lower interest rates, according to a draft copy of his eight-page bill.
Brown’s legislation comes amid increasingly dire warnings from regulators and policymakers concerned that outstanding student debt — now valued at nearly $1.2 trillion — may put the economy at risk as overburdened households curtail spending, investment and savings in order to pay student loans, despite more than four years of record low borrowing costs.
“Why should our students and graduates be the last to benefit from historically low interest rates?” Brown said. “Helping graduates refinance their private student loan debt into more affordable terms frees up funds for them to buy houses, start businesses, or contribute to their communities. It makes sense for our students and graduates and it makes sense for our economy.”
Last month, President Barack Obama said that the $26,000 in debt carried by the average new college graduate “holds back our entire middle class.” Student loan payments “can last for years, even decades, which means young people are putting off buying their first car or their first house — the things that grow our economy and create new jobs,” Obama added.