U.S. Senator Elizabeth Warren (D-Massachusetts) lost another battle on student loan refinancing to Senate Republicans on Wednesday (Mar. 25), despite increasing calls to overhaul the loan system.
Warren’s amendment, which she attempted to attach to the Republican budget resolution, would let student loan borrowers refinance their expensive payments to today’s record-low interest rates, rather than continuing on with current loan interest rates of six to 10 percent.
Her plan would have been financed by a new tax requirement that would force millionaires to pay at least a 30 percent effective federal tax rate.
The vote was 46-53, with three Republicans – Bob Corker of Tennessee, Susan Collins of Maine, and Lisa Murkowski of Alaska – all voting with the Democrats, currently the minority in the chamber.
Current estimates have the total student loan debt at $1.2 trillion, only trailing home mortgages as the most expensive burden weighing on Americans.
“The amendment would save borrowers hundreds, if not thousands," Warren said. "We have a choice: protect a tax loophole for billionaires or give millions of middle class people a chance to build some real economic security . . . Congress has worked too long for the billionaires.
“Last year, Republicans blocked our efforts to lower student loan interest rates . . . so tens of millions of borrowers get nothing,” she continued. “While Republicans were busy blocking student loan refinancing, our country’s student debt problem got worse, much worse.”
Republicans have also made efforts to assist student loan repayments, albeit at a smaller scale than Warren. Sen. Richard Burr (R-North Carolina) proposed an amendment that will make it easier to pay student loans by removing overlapping programs.
Recently, President Barack Obama has made steps to alleviate some of the costs for current and future college students. In June 2014, the President expanded his previous law to all loan borrowers that stated payments will not exceed 10 percent of a borrower’s income every month.
Sen. Warren previously attempted to fix the student loan system last year. The Bank on Students Emergency Loan Refinancing Act would have let those who borrowed loans before 2010 refinance with interest rates of 3.86 percent, or the newest interest rate that Congress set for current loan borrowers. Her proposal failed 56-38, not enough to overcome Republican filibusters, which would have required 60 votes.
Photo Credit: Consumer Financial Protection Bureau, The Hill