Foster Discusses Efforts To Reduce Student Loan Debt
Aurora, IL – Today at Aurora University, Congressman Bill Foster discussed the growing problem of student loan debt and legislation that would help to reduce the burden. Foster was joined by Aurora University Vice President for Enrollment, Donna DeSpain, and community members.
Foster is a cosponsor of H.R.4582, the Bank on Students Emergency Loan Refinancing Act. The legislation would allow students to refinance federal student loans when lower rates are available.
“I am a cosponsor of the Bank on Students Emergency Loan Refinancing Act because I believe that every student who is willing to work hard deserves a shot at a good education without being buried in debt,” said Foster. “The federal government shouldn’t be locking students in at high interest rates – borrowers should be able to refinance their student loans just like they can on a car or a home. This is the kind of commonsense legislation we need to make college more accessible for Illinois students and to ease the burden for student loan holders.”
While borrowers are struggling with increasingly larger amounts of debt, federal law prevents students who have already borrowed money from refinancing their loans when lower rates become available. Borrowers can refinance a home or auto loan when better rates are available, but they cannot refinance student loans. This leaves graduates with interest rates at 8-12 percent or higher. The federal government is profiting from these high interest rates. According to a recent Government Accountability Office report, the federal government is projected to make $66 billion on student loans issued during 2007-2012.
The Bank on Students Emergency Loan Refinancing Act would allow federal and private student loan borrowers to refinance at current rates, saving them thousands of dollars. Over one million graduates in Illinois would benefit from this legislation. Students with $30,000 of federal loans for their college education would save more than $4,000. Graduate students who borrowed $40,000 to obtain a graduate degree would save more than $2,500. Parents who borrowed $50,000 for their child’s education would save more than $3,500.