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house Bill H.R. 649

Should College Students Be Able To Refinance Their 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.

BarackObama's Opinion
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02/25/2015
"Higher education should not be a luxury. A degree is key for a job in this day and age and should be made more affordable to all."
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MateoLowe's Opinion
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03/27/2015
Refinancing student loans will help students get out of their debt sentence and have a better opportunity to stimulate the economy with the money they save by refinancing their loans
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JonRunyan's Opinion
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04/11/2015
We have already burden the student if there is away to ease the pressure why not. It's called shopping for the best deal, anyone ever refi their house?
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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.

Locker's Opinion
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05/04/2015
Basic economics tells us that if you loan money, you make more expensive "things" more affordable short term. This means that you will have an increase in the price of said "thing", in this case tuition. Tuition rates continue to increase, and higher education becomes less of an option for the working class because our leaders continue to make (for lack of a better term) stupid decisions. We cannot make decisions based on emotions, and we must NEVER rely on government for help.
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V's Opinion
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06/17/2015
If someone is willing to lend at a lower interest rate, the student should be able to refinance. The government should not be involved in the first place.
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Thomas's Opinion
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03/27/2015
There are too many loans out the have never been repaid and never were intended to be paid back. It is owed collect now
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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
      Higher Education and Workforce Investment
    IntroducedFebruary 2nd, 2015

What is House Bill H.R. 649?

This bill would change the interest rates for students borrowing through the William D. Ford Federal Direct Loan program.

Student loan borrowers would be authorized to modify the interest rate on their loans, meaning that the loans would now carry the interest rate that they would have had if they were first disbursed at the time of modification.

This would allow borrowers to reduce their debt burden by lowering the amount of interest that accumulates, and also would likely reduce their monthly payments.

The new interest rate would be fixed for the life of the loan — unless the borrower chooses to change the rate, and they can do so at any time.

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. 649

A CBO cost estimate is unavailable.

More Information

In-Depth: Student loan debt 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.

The average student loan balance for a person in their twenties has increased from $15,900 in 2005 to over $25,500 in 2014. While borrowers are struggling, the federal government made a $41 billion profit on student loans in 2013, and those profits are projected to continue through 2024.

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: Flickr user kevin dooley)

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.

    "Higher education should not be a luxury. A degree is key for a job in this day and age and should be made more affordable to all."
    Like (134)
    Follow
    Share
    Basic economics tells us that if you loan money, you make more expensive "things" more affordable short term. This means that you will have an increase in the price of said "thing", in this case tuition. Tuition rates continue to increase, and higher education becomes less of an option for the working class because our leaders continue to make (for lack of a better term) stupid decisions. We cannot make decisions based on emotions, and we must NEVER rely on government for help.
    Like (12)
    Follow
    Share
    Refinancing student loans will help students get out of their debt sentence and have a better opportunity to stimulate the economy with the money they save by refinancing their loans
    Like (25)
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    We have already burden the student if there is away to ease the pressure why not. It's called shopping for the best deal, anyone ever refi their house?
    Like (21)
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    Student loan debt in the United States is increasing at an alarming rate. If we don't do something, it will continue to skyrocket.
    Like (13)
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    This will help create competition in the market for student loans. If students are free to refinance their loans with a better loan provider, existing ones will work harder to serve the students they have to compete effectively.
    Like (9)
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    It is better for both the economy and the students to be able to spend the money they could potentially save on other things.
    Like (7)
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    I have two children in college and will acquire a lot of debt by the time they graduate, if they can consolidate their loans with a lower interest rate would help so much.
    Like (5)
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    Students have had to borrow too much in loans for access to higher education, all because the government has cut funding to higher institutions. It has clearly been disastrous and crippling for Americans to access education. Please help make American lives a little easier.
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    If someone is willing to lend at a lower interest rate, the student should be able to refinance. The government should not be involved in the first place.
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    If you get to refinance your home and what not, why can't you refinance your student loans?!
    Like (3)
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    I'd say get rid of tuitions all together but this is a step forward. Expensive college education that leads to crippling debt is a major reason why so many people don't go to college or graduate school, law school, etc. and with free trade agreements you create a environment where people can't afford to go to college and then they end up unemployed because jobs are going over seas. At least with refinancing loans you create an incentive for students to further their education and have a better chance to succeed in the future.
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    Inability to refinance school loans forces students to default on the immeasurable amount of debt many have after graduation.
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    There are too many loans out the have never been repaid and never were intended to be paid back. It is owed collect now
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    As a student currently attending the largest public university in the United States, I feel that rising tuition prices and the unforgiving reality of college debt faced by Millennials after graduation is a serious issue that Congress must address. This option to set and maintain lower interest rates is a good start.
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    A tremendous cornerstone of the American economy is the free-market system, that allows for independent private services to modify or change other financial services and as such fulfill a specific economic niche, in a climate that allows these services in other aspects of financial obligations, mainly purchases, it makes little sense to regulate education dissimilarly.
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    Yes. Students should be able to refinance their la
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    I think students have been ripped off! The majority of college graduates are not making the money they need to pay off these loans. I say free college for all!
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    You can never get out of debt
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    you should always be able to refinance a loan at a cheaper interest rate or terms
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