ROANOKE, Va. – Virginia students might soon be able to catch a break when it comes to their student loans.
With U.S. student debt exceeding $1.7 trillion, Sen. Mark Warner, Sen. Jon Tester and Sen. Angus King introduced a bill on Friday that could help reduce student loan debt and better the economy during the COVID-19 pandemic.
“All over the country, we have young people who made a substantial decision to invest in their future, but now find themselves saddled by overwhelming student loan debt during a pandemic that has tanked the economy and shattered the job market,” said Warner. “The way to get our economy back on track is not by having an entire generation of people who are unwilling or unable to make future financial commitments because they are buried by the loans they took out in their late teens or early twenties. This legislation will give student borrowers a real shot at paying back their debt so that in the near future they are able to invest in a home, start up a business, or save for retirement.”
If approved, eligible students in good standing would be able to refinance their existing federal student loans and lower loan interest rates.
According to the bill, undergraduate borrowers would have the opportunity to lower their interest rates on federal Direct Stafford, Unsubsidized, PLUS and Consolidated loans to the lowest yield on the 10-year U.S. Treasury note in the previous six months plus 2.05%.
Graduate borrowers would be able to make their interest rate on Federal Direct Stafford or Unsubsidized loans the same as the lowest yield on the 10-year U.S. Treasury note in the previous six months plus 3.6%.
So far, the legislation is backed by several organizations including the Disability Rights Education & Defense Fund, the Center for Law and Social Policy, the National Association of Realtors and the Georgetown University Center on Education and the Workforce.
For more information on the bill, read the full text here.