Hassan, Shaheen sponsor student loan refinancing bill

New Hampshire’s U.S. Senators Jeanne Shaheen and Maggie Hassan are sponsoring a bill to allow citizens to refinance their student loan debt at current federal interest rates.

Right now students with federal loans do not have any option to refinance. The Bank on Students Emergency Loan Refinancing Act - sponsored by Hassan and Shaheen and more than two dozen other Democratic Senators - would allow borrowers to refinance federal loans through the government.

For most borrowers the federal interest rate is much lower than it used to be, so refinancing would significantly cut interest payments.

“Students should be able to refinance their loans just like homeowners can refinance their mortgages. This legislation will help borrowers save thousands on their loans, continuing our effort to make college more affordable and help save students from a mountain of debt,” said Shaheen. 

Other bill supporters argue that it is unethical for the federal government to reap profits from student loans with high interest rates.

Bill opponents, on the other hand, argue that the private sector should be allowed to compete for refinanced student loans. Others believe that if the federal government continues to enable students to take on more debt than they can pay off, colleges will keep on raising tuition.

Other proposals to decrease student debt include payment plans based on income, government-sponsored community college, and in New Hampshire’s case, additional government funding for state schools.

Do you support federal student loan refinancing? Share your opinion in the comments below.