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.