WASHINGTON, D.C. – People with federal and private student loans issued prior to 2010 will not have the opportunity to refinance those loans at today’s lower interest rates — at least not right now.

There were not enough votes in the U.S. Senate this week to move forward with a proposed bill that would have allowed for that refinancing. White House officials estimated the move could have saved a typical student as much as $2,000 through the life of his or her loans.

“A lack of political will prevented the Senate from providing much-needed relief for those who’ve made personal sacrifices to go to college,” said U.S. Senator Jay Rockefeller (D-W.Va.). “Though I am disappointed by the way this vote ended, we will continue to fight for the men and women who are working hard to fulfill their dream of a college degree.”

On Thursday’s MetroNews “Talkline,” Second District Congresswoman Shelley Moore Capito (R-W.Va.), a U.S. Senate candidate, said student loan debt was “obviously a problem.” She said she has voted at least twice in the past for relief bills.

“I have a very solid record on trying to help students figure out how to pay. We don’t want to have any (financial) barriers for anybody who wants to go to school,” Capito said.

Those with the Democratic Senatorial Campaign Committee, though, questioned Capito’s stand.

“Rep. Shelley Moore Capito’s reckless allegiance to Washington special interests comes with a high price tag for West Virginia college students and families who are struggling to pay off student loan debt,” said Justin Barasky, spokesperson for the DSCC.

Earlier this week, President Barack Obama rolled out new executive actions designed to make it easier for graduates to pay off their student loans.

“I, personally, don’t like the way the President is coming in on all these different areas and just issuing edicts before they go through the representational process,” Capito said of those executive actions.

As part of them, the U.S. Secretary of Education is being directed to develop regulations to let some five million student loan borrowers cap their student loan payments at ten percent of their incomes. That cap could be an option for borrowers who took out loans before 2007 by December of next year.

Most student with loans today can already cap their loan payments at 10 percent of their incomes.

According to the West Virginia Center on Budget and Policy, the average debt of a graduate from a four-year public college in West Virginia is now at more than $25,000. The New York Federal Reserve Bank has said West Virginia has the highest student loan delinquency rate in the nation at roughly 18 percent. The national average is 11 percent.

Mortgages are currently the largest forms of consumer debt in the United States. Student loan debt, which totals an estimated $1.2 trillion, is in the second spot for debt behind those mortgages.

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Comments

  • Aaron

    The things about this bill is that it is more semantics than anything as the rates only apply to loans that remain independent of each other. If the graduate combines his loans then the interest rate goes up for all loans, pre and post 2010 and on all loans capped at 10% of income. It's all in the fine print.

  • Gary Karstens

    Thank you Senator Rockefeller for your noble efforts to help the common man looking for a hand up.....not a hand out!

    And to Mrs. Capito......YEESH!

    • ViennaGuy

      Gary, do you really want to give students a hand up? OK, let's do that.

      Let's start giving students a hand up by forcing public colleges and universities to cut out the fluff and reduce the cost. When half - or more - of the classes required for a major have nothing to do with the major, there's too much fluff; money is wasted on irrelevant classes. Eliminate fluff classes and eliminate entire majors which do not prepare students for the workforce or only make a student feel good about themselves. Cut out the tuition-funded social organizations; if people want to have social organizations on campus, they can pay for the groups themselves. Make college athletic departments as self-supporting as possible. College is about preparing for one's future, not about feel-goodism. If someone wants to feel good about themselves, they can adopt a puppy from an animal shelter(a good thing to do, I might add).

      Second, let's give students a hand up by emphasizing vocational, technical, and apprenticeship programs at the high-school level. High school guidance counselors push "college, college, college." When I was in high school, vocational/technical/apprenticeship training was talked about only in a negative sense; as students, we were discouraged from going that route(to be fair, I might have gone the vo-tech route if I hadn't heard such negativism about it). Not everyone is cut out for college; given that only about 40% of incoming freshmen complete college, there are clearly too many college students - which drives up the cost for everyone.

      Third, parents can give their kids a hand up by simply squelching this "dream college" talk that comes from so many high-school students. "Dream schools" are typically very expensive and require large loans; parents need to step in and bring their kids back to reality. I went through the "dream school" phase as a high school student, but my parents quickly said, "Forget it, we don't have the money and you don't, either." So I went to a small community college here in WV for the first two years and then finished up at a small 4-year school - all while living at home, and I saved a ton of money. I still had to take out loans, but not nearly as much as my friends had to take out. Yeah, I missed out on the fraternity scene, the parties, and so forth, but IMO those things really mean little in the longer term.

      I am tired of these politicians crying about the cost of college. There are two sides to the college coin, and the politicians refuse to do anything about the college's side. Reduce the cost on the college's side, and the debt side will take care of itself. College can be reformed and college costs can be reduced if 1) the political will is there to do it and 2) the parents are willing to direct their kids in paths that save money.

  • Rick

    Anyone can go to college in WV and graduate debt free. Just go to one of the fine state colleges and universities located throughout the state (Shepherd, Fairmont, West Liberty, Glenville, Concord, Bluefield, WV State, WVU-Tech, Marshall, WVU) or one of the many community colleges. Get a job while you go to school at the local fast food place or grocery store. You can clear about $750 a month if you only make minimum wage. $750 x 12 = $9000.00. There is your tuition and books for any in state resident. I worked my way through college and graduated with no debt and although my GPA was not perfect it was over 3.0. The fact that I had worked through college gave me a head start on other recent grads and made it easier to find full time employment.

  • DB

    Breaking News: Wealthy politicians screw over middle and lower class students.

    They make sure to pass those pay raises though.

  • ViennaGuy

    College is too expensive, period. We continually hear all of this talk about making college more affordable, yet little-to-none of the cost reduction is on the college's side of the ledger.

    Discuss, folks.

    • The bookman

      I don't see anyone addressing the high cost of higher education. What I see is people attempting to find more ways to subsidize the cost. I think Capito's answer sidesteps the issue, in that too many kids are being funneled to college, and have no business there in the first place. That's how they find themselves in such debt. The college experience ruins so many lives, and I for one would like to see broader opportunities than just college as the next step after high school.

      • ViennaGuy

        - too many kids are being funneled to college, and have no business there in the first place -

        Bookman, it's great to see that I am not the only person who thinks that too many kids go to college. Nationwide, only about 40% of incoming freshmen actually finish a 4-year college degree; the rest drop out for various reasons. I know several people who went to college because their parents pushed them to do it, only to see them drop out after a semester or two. They were never interested in it, and all of the money spent on it wound up wasted.

        I'd like to see a renewed push for vocational/technical education and apprenticeship programs.