News Releases

(Washington, D.C.) – Today, U.S. Senator Patty Murray joined Sen. Elizabeth Warren (D-Mass.) in introducing the Bank on Students Emergency Loan Refinancing Act, which would allow those with outstanding student loan debt to refinance at the lower interest rates currently offered to new borrowers. The legislation is co-sponsored by Senators Barbara Boxer (D-Calif.), Dick Durbin (D-Ill.), Jack Reed (D-R.I.), Mary Landrieu (D-La.), Debbie Stabenow (D-Mich.), Sherrod Brown (D-Ohio), Sheldon Whitehouse (D-R.I.), Mark Udall (D-Colo.), Tom Udall (D-N.M.), Jeanne Shaheen (D-N.H.), Jeff Merkley (D-Ore.), Mark Begich (D-Alaska), Kirsten Gillibrand (D-N.Y.), Al Franken (D-Minn.), Richard Blumenthal (D-Conn.), Brian Schatz (D-Hawai'i), Tammy Baldwin (D-Wis.), Chris Murphy (D-Conn.), Mazie Hirono (D-Hawai'i), Heidi Heitkamp (D-N.D.), Edward J. Markey (D-Mass.), and Cory Booker (D-N.J.)

Many borrowers with outstanding student loans have interest rates of nearly 7 percent or higher for undergraduate loans, while students taking out new undergraduate loans pay a rate of 3.86 percent under the Bipartisan Student Loan Certainty Act passed by Congress last summer. The Bank on Students Emergency Loan Refinancing Act would allow our students and young people to pay back their outstanding loans at the same rates that Senate Republicans overwhelmingly embraced just last summer as appropriate for new borrowers.

"Exploding student loan debt is crushing young people and dragging down our economy," said Senator Warren. "This legislation gives students the same fair shot as other borrowers have when interest rates decline."

"Too many Americans across the country are struggling right now with the overbearing financial weight of college debt, and that needs to change," Senator Murray said. "By allowing borrowers to refinance their loans, this legislation would put more money in people's pockets by bringing down the costs of the investments they made in their education. The choice should be clear: Instead of allowing millionaires and billionaires to pay a lower tax rate than middle-class families, we should be helping borrowers better afford their college education."

There are nearly 40 million Americans with outstanding student loans. The Bank on Students Emergency Refinancing Act could lower payments for millions of those individuals by hundreds or thousands of dollars a year. The average student loan debt among those who borrow to get a bachelor's degree is nearly $30,000 - and a shocking 30% of Federal Direct student loan dollars are in default, forbearance, or deferment. Meanwhile, the Government Accountability Office (GAO) recently projected that the government will bring in $66 billion in revenue on its federal student loans made between 2007 and 2012.

The legislation is fully funded by enacting the Buffett Rule, which would limit special tax breaks for the wealthiest Americans that allow millionaires and billionaires to pay lower effective tax rates than middle class families. A companion bill is being introduced today in the U.S. House of Representatives by Representatives John Tierney (D-Mass.) and George Miller (D-Calif.), the senior Democrat on the House Committee on Education and the Workforce.

Fact sheet on the legislation available here