Sen. Kirsten Gillibrand is renewing a call for legislation that would allow student borrowers to refinance their federal student loans at lower interest rates, urging President Barack Obama to push the effort in his State of the Union speech Tuesday.
The New York Democrat said Sunday there’s currently about $1.2 trillion in student loan debt nationwide — and the average New York graduate owes more than $27,000.
“It would help out any graduate who owns student debt,” Gillibrand told WCBS 880. “It will help literally millions of people across the country who have enormous amounts of student debt. In New York alone, there are 2.7 million borrowers who have federal loan debt, and 76 percent of their loans would be eligible for refinancing under our bill.
Refinancing legislation would increase disposable income, allowing students and recent graduates to spend money in ways that could boost the economy, Gillibrand said.
“It also gives our young people the chance to buy a home, start a family, start a business. And to many young people unfortunately are putting those things further and further into the future because of studentdebt.”
In May of 2013, Gillibrand introduced the Federal Student Loan Refinancing Act that could affect nearly nine in 10 federal student loans by allowing borrowers who have a higher interest rate to refinance at a fixed rate of 4 percent. Most rates for federal student debt are higher than 6 percent.
This measuare could affect a large percentage of the 40 millioin borrowers in the US.