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house Bill H.R. 1614

Should Borrowers Be Able to Refinance Their Federal Student Loans?

Argument in favor

Allowing student loan borrowers to refinance their student loans will lower their payments and let them spend that money in other parts of the U.S. economy.

Jesse's Opinion
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08/07/2017
What we should be doing is providing free college education, but until then yes, student loans should be eligible for refinance like any other loan.
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Jenna's Opinion
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08/07/2017
As a college student who is currently taking out loans, I want the ability to refinance those loans later.
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08/07/2017
We should be able to refinance if better rates become available; if you're going to be in debt for decades, why not make it more affordable for yourself?
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Argument opposed

Borrowers should know what they're getting into when they apply for the student loans — If interest rates were too high when they signed, they shouldn't have borrowed.

Brian's Opinion
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08/07/2017
The needless cruelty of the "Why Vote Nay" explanation should make it pretty clear a 'Yea' response is the correct answer.
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Poli.Sci's Opinion
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08/07/2017
I am a college graduate and even though it would be nice to refinance, I understood what I was getting myself into when I borrowed for tuition. This is a socialist idea that hurts the United States in the long run. The more money that is written off, the more money the government must use to pay that write off, which is a classic socialist maneuver. In so doing, this creates more taxes to pay for that write off, or money is diverted from actual helpful programs to pay for this "refinance." College students should not be personal piggy banks by any means for our banks, so find a different solution that does not force the government to pay for someone's ill accepted choices.
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Richard's Opinion
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08/08/2017
So you want to allow borrowers to refinance with the federal government rather than seek outside loan consolidation. Hmm, why not get the government out of the money lending business all together. The government is not on the hook for bad loans, the public is.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Education and Labor
    IntroducedMarch 17th, 2017

What is House Bill H.R. 1614?

This bill would change the interest rates for students borrowing through the William D. Ford Federal Direct Loan program, and allow borrowers to refinance their loans. Borrowers would be able to refinance their student loans at any time, which can potentially have the effect of lowering their interest rates and reducing their monthly payments.

Impact

People who have borrowed student loans through the William D. Ford Federal Direct Loan Program, companies that service student loans, the Department of Education.

Cost of House Bill H.R. 1614

A CBO cost estimate is unavailable.

More Information

In-DepthSponsoring Rep. Mark Pocan (D-WI) introduced this bill to allow borrowers to refinance their federal student loans any time a lower interest rate is available:

“With college debt skyrocketing, Congress should be doing everything it can to help reduce the crushing burden of student debt. The Student Loan Refinancing Act will allow nearly 44 million Americans to refinance their student loans, just like a mortgage or car loan. This bill would bring down the long-term cost of a college degree.”

This legislation has the support of 50 cosponsors in the House, including 48 Democrats and two Republicans.


Of Note: Student loan debt is the largest form of personal debt in the U.S. surpassing $1.3 trillion among 38 million borrowers — with the average undergraduate facing $30,100 in debt. It has been linked with the sluggish housing recovery as borrowers can’t afford to make an investment in a home, in addition to declining sales of new cars.

Allowing students to refinance their student loans could come at a cost to the federal government -- as borrowers with good credit would be able to refinance with private lenders, leaving the government's portfolio with a larger proportion of borrowers who are unlikely to repay their loans. Through lost interest payments, this could cost the federal government billions of dollars.


Media:

Summary by Eric Revell

(Photo Credit: Brett Jordan / Creative Commons)

AKA

Student Loan Refinancing Act

Official Title

To authorize borrowers of loans under the William D. Ford Federal Direct Loan Program to modify the interest rate of such loans to be equal to the interest rate for such loans at the time of modification.

    What we should be doing is providing free college education, but until then yes, student loans should be eligible for refinance like any other loan.
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    The needless cruelty of the "Why Vote Nay" explanation should make it pretty clear a 'Yea' response is the correct answer.
    Like (30)
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    As a college student who is currently taking out loans, I want the ability to refinance those loans later.
    Like (85)
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    We should be able to refinance if better rates become available; if you're going to be in debt for decades, why not make it more affordable for yourself?
    Like (82)
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    100% Yes. The student loan program is the most greedy lending agency out there next to Payday Loans. This is a total rip off.
    Like (63)
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    Our students are our future. I don't see why we would want them to be in debt their whole lives. In fact I think we should offer free education.
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    Lenders are taking advantage of student loan laws, knowing the poorest students will do almost anything to try and claw their way out of poverty. The new laws are great, but many are still struggling to pay high interest loans that should never have been legal in the first place.
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    Yes. We need to work to provide low interest loans for our college students 2 percent. Anything higher is not reasonable given the cost of a college education.
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    No one enters the teaching profession to become rich. When I took out loans to enter a top-tier graduate education program, it was with the understanding that if I dedicate my life to teaching in a high-need area, my remaining balance on my loans would be forgiven after X # of years of dutiful payment, so that I will be able to one day afford a house and raise a family. I have kept up my part of the bargain. I expect the Department of Education to value teachers and live up to their end. From the article: "Our previous reporting has showed that many people in the last 10 years made binding life decisions based on the promise of Public Service Loan Forgiveness. They chose lower-paying jobs in the public sector, and enrolled in payment plans, as instructed, that left their loans piling up interest. Ten years into their careers, if stuck with thousands of dollars in debt they hadn't planned on, many will have to forego buying a home or saving for retirement."
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    Why does this even have to be discussed? Of course students should be able to refinance their loans especially under the weight of crushing debt. We also need to work towards bringing the cost of a college education down all together.
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    If some institutions wishes to refinance a student loan and as long it's not being done with some government organization, then, as they say, "between consenting adults."
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    Why shouldn't student loans be refinanced like mortgages, auto & other loans?
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    I am a college graduate and even though it would be nice to refinance, I understood what I was getting myself into when I borrowed for tuition. This is a socialist idea that hurts the United States in the long run. The more money that is written off, the more money the government must use to pay that write off, which is a classic socialist maneuver. In so doing, this creates more taxes to pay for that write off, or money is diverted from actual helpful programs to pay for this "refinance." College students should not be personal piggy banks by any means for our banks, so find a different solution that does not force the government to pay for someone's ill accepted choices.
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    So you want to allow borrowers to refinance with the federal government rather than seek outside loan consolidation. Hmm, why not get the government out of the money lending business all together. The government is not on the hook for bad loans, the public is.
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    To start with, I echo the sentiments of others that college should be free or at least substantially more affordable. And yes, people should be allowed to refinance their student loans in the same way they refinance homes or any other large investment. What many fail to understand is that student loan debt isn't just crippling the personal finances of the debtors, but also having an impact on our economy as a whole. Those struggling under the weight of student loans are not buying houses or cars. Even with good jobs they have no excess to put back into circulation and are not able to save for a brighter tomorrow. Their struggles are really our struggles. We should never have reached the point we are at today and predatory practices are a contributing factor in how we got here. HRD had a plan to help students. Bernie has a plan. Sadly, 45 and the GOP have their own plan, only their plan involves pressing the life out of most of us under the weight of debt while making college financially unattainable for anyone other than the very wealthy. They would prefer us ignorant. Remember, 45 has said how much he loves the uneducated. Of course he does. It was the ignorant and the greedy who put him in the White House.
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    Of course. This shouldn't be a question. If you can refinance any other loan you should also be able to do so with student loans.
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    Of course. Underemployed people can't keep up.
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    Anything college students and former students can do to decrease their debt load is a good thing. Of course they should be able to refinance. We need free education for all.
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    Why exactly is this a point of debate? Yes. Yes. Yes.
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    A student who wants a college degree has options. option one: Help from parents. Option two: Scholarship. Option three: Take out a student loan. This situatio is in many ways like the health insurance dilemma . Like insurance, college costs have skyrocketed while at the same time non college careers have become harder to find. I believe that the burden of student loan debt as well as the burden of medical bills only complicates this situation. We should be moving as a country to an affordable answer. One that no longer cripples many of us for decades. A shared burden makes sense. One where the student, the lender, and the school share in the burden. We need a situation that encourages education for all who desire to further their education.
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