Student Debt Crisis Solutions: Democratic Senators Introduce Law Protecting Student Loan Borrowers
Senate Democrats have introduced legislation to increase student loan process transparency, especially in deals including a co-signer.
Sen. Bob Menendez, D-N.J., introduced the "Christopher Bryski Student Loan Protection Act" in memory of New Jersey college student Christopher Bryski who passed away in 2006. As a result of his death, his family was left with tens of thousands of dollars in student loan debt and was obligated to repay the private student loan lender because Bryski's father was the co-signer. The family, however, were unaware of the obligations.
"Middle class families like Christopher's should not have to endure the devastating loss of a child only to learn they must also face the financial hardship of a huge student loan debt," said Menendez in a statement. "And if a student hasn't missed a payment and their loan is in good standing, there is absolutely no reason for a lender to put the loan into default because tragedy strikes."
"Lenders also shouldn't be able to use hidden tricks and confusing paperwork to stop the fair release of co-signers from a loan. This law is designed to stop these practices and ensure fairness for students and their families," he added.
The Bryski family had proposed the idea of the legislation in 2009, which would be introduced by late Rep. John Adler and Sen. Frank Lautenberg. The family said the bill's purpose is to ease hardships on families struggling to cope with a loved one's serious injury or death.
"Our original intent remains the same, to mandate transparency in the private and federal student loan industry, with six years of hard work to prove it," the Bryski family said.
Democratic Sens. Cory Booker of New Jersey, Al Franken of Minnesota, Kristen Gillibrand of New York and Elizabeth Warren of Massachusetts have cosponsored the bill.
Last March, Warren introduced the "Bank on Students Emergency Loan Refinancing Act" (S.793), which would allow individuals with outstanding student loan debt to refinance at the interest rates approved for new borrowers in 2014. According to Warren, many undergraduate borrowers have interest rates of approximately 7 percent or higher yet students during the 2013-2014 academic year had a 3.86 percent interest rate as a result of the Bipartisan Student Loan Certainty Act in 2013. Her bill would allow students and young people to pay their loans as borrowers in 2013.
"Since last year, nearly a million more borrowers have fallen behind on their student loan payments," said Warren. "Young people who are working hard to build a future deserve a real opportunity to succeed, and that means letting struggling borrowers refinance their student loans to take advantage of lower interest rates -- the same way people refinance a mortgage, a car loan, or business debt."
Warren's bill has been referred to the Senate Committee on Finance.
According to the Harvard University Institute of Politics, most millennials -- an age group comprising of 18-through-29-year olds -- said student loan debt is a major problem for American youths. With 57 percent, millennials under 30 years old said student loans are a problem, and 70 percent of survey respondents stated financial circumstanced played an important role in their decision on whether or not pursue higher education.
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