A striking blow for curbing the student loan debt crisis came earlier this month as Republicans in the U.S. Senate blocked a bill that would have allowed borrowers to refinance their loans. Introduced by Senators Al Franken and Elizabeth Warren, the Bank on Students Emergency Loan Refinancing Act would have allowed borrowers to refinance their loans down to the 3.86% interest rate that was available last year.
The news of the defeat comes in the wake of an announcement made by President Obama, stating that he would be signing an executive order, expanding his “Pay As You Earn” program. The program limits monthly student loan debt payments to 10% of a borrower’s income. An additional five million Americans would be allowed to participate in the program after the enactment of the President’s order.
It is difficult to see a light at the end of the tunnel for those choosing to take out loans to finance their college education. Currently, American students hold a total of $1.2 trillion in outstanding student loan debt, a number that surpasses all outstanding credit card debt in America. The debt situation is particularly concerning for many Minnesota students. The state ranks fourth in the nation in the highest level of average student debt with an average of $30,000 per student.
The crushing debt felt by many college graduates in Minnesota has a crippling affect on their lives, many choosing to wait to start a family, purchase a house or buy a car. The realities of student loan debt have many of us wondering why attempts to help alleviate this debt have been stymied by conservatives at every turn.