Bill to refinance student loans discussed

Published 7:50 am Wednesday, July 16, 2014

With nearly 600,000 student loan borrowers in Louisiana with an outstanding loan of about $23,000, federal legislation has been introduced to let borrowers with private or federal undergraduate loans refinance at 3.86 percent.

U.S. Sen. Mary Landrieu, D-La., on Tuesday hosted a video chat with college students and young professionals to talk about how to make college more affordable.

Landrieu in May introduced the Passport to the Middle Class initiative, which includes the Bank on Students Emergency Loan Act. She said it will allow responsible borrowers to get a “fair interest rate,” saving the average student about $8,000.

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Landrieu said student loan debt is “an issue that is really important to the advancement not only of students around the country and their families but our communities and our general economy.”

“We can do this without costing the taxpayers any money,” she said during the video conference. “The program can still run at a profit at this reduced rate. While it does diminish the profits of the federal government and gives that benefit to the students, which is appropriate, it does not run at a deficit.”

In addition, the initiative includes the Middle Class Creating Higher Education Affordability Necessary to Compete Economically, or CHANCE, Act, which increases the Pell Grant award from $5,730 to $8,900 — an effort that Landrieu said will help ease increasing tuition costs.

“The easier the pathway to college and education is or the more accessible it is to students that are willing to do their part, the more successful they become and the more wealthy and prosperous our nation becomes,” Landrieu said during the conference.

The video chat included five students from across the state, who shared their experience with college debt.

One student, “Jessica,” from Columbia, recently graduated from Louisiana State University. She is now a teacher with monthly student loan payments of $800 — payments she makes out of her $2,600 monthly take-home pay. Her outstanding loan amount is $40,000.

“It would have been greatly beneficial to have more Pell Grant money available for me,” she said. “I want the American dream too, but at this time I can’t afford it.”

Davante Lewis, a recent graduate and former McNeese State University student body president, said Landrieu’s idea on higher education debt is a great first step in a complex issue in America.

“The rising cost of education has forced many students into debt the second they graduate college,” said Lewis, who participated in the video conference. “While changing interest rates is a must, reworking the entire Higher Education Act needs to happen. However, I do think this is a great first move for students across America.”

A Landrieu staffer said the senator is hopeful the two bills will move forward as the Senate reauthorizes the Higher Education Act. The CHANCE Act has 41 House of Representatives co-sponsors and four Senate co-sponsors. The Bank on Students Bill has 132 House co-sponsors and 43 Senate co-sponsors.(Rick Hickman/American Press)