U.S. Sen. Claire McCaskill is backing legislation to permit individuals refinance their student loan debt at lower interest rates — a measure she said is fully paid for, and which the U.S. Department of Education says would benefit more than 500,000 Missouri students by letting eligible borrowers refinance their high-interest federal loans to the low rates offered to new federal student loan borrowers.
McCaskill highlighted the bill she cosponsored during her college affordability tour, in which she visited Washington High School Monday.
The bill would also let eligible students with high-interest private student loans convert their private loans to government loans.
“This would be targeted toward people who are trying to pay their student loans and are saddled with higher interest rather than the current market rate,” McCaskill said.
Similarly to how people can refinance their mortgage when interest rates drop, people would have the ability to refinance student loans when rates drop.
“What’s really unconscionable about this, in fact, offensive about this, is that it is the government that is getting these higher interest rates,” McCaskill said. “These people who are trying to pay their student loans are paying too high of rates, and they’re paying it to the federal government.”
Missouri ranks 33rd in the nation in terms of how much debt students graduate with, and 31st in the nation in terms of how many students graduate with debt.
McCaskill, along with several of her Senate colleagues, wrote a joint letter to U.S. Education Secretary Arne Duncan last year highlighting the issue of college affordability.
Shortly after joining the Senate in 2007, McCaskill helped pass into law the College Cost Reduction and Access Act, and in 2008, she supported the Higher Education Opportunity Act, both of which expanded eligibility for Pell grants.
The American Recovery and Reinvestment Act that she supported included more than $140 million in increased benefits for Missouri Pell grant recipients, as well as $3.84 million for grants to colleges and universities to assist with financing work-study programs.