Castor Seeks to Reduce Student Debt Burden
U.S. Rep. Kathy Castor has introduced a bill to lower the cap on interest rates charged on student loans. The bill is a companion to one filed in the Senate by Florida Sen. Bill Nelson.
WASHINGTON, DC – U.S. Rep. Kathy Castor, D-Tampa, on Wednesday (July 26) filed the Student Loan Relief Act to tackle America’s rising student debt, give working families a more affordable path for college and spur economic activity.
Castor is offering the bill as the U.S. House version of the legislation filed by U.S. Sen. Bill Nelson.
The Student Loan Relief Act will lower the cap on federal student loan interest to 4 percent for undergraduate students, 5 percent for graduate students and 6 percent for parents. It would change the way student loan interest rates are calculated, allow borrowers with loans disbursed before the effective date to refinance their loans at the new rates and eliminate loan origination fees. Nelson unveiled the Senate version earlier this month.
“A college or graduate degree is an important pathway to higher wages, better jobs and a better future, but can be very expensive for working families,” Castor said. “Today’s students are facing more debt than ever before and even though unemployment is down, higher wages lag. Student loan debt is growing at faster rates than all other household debt, including 42.3 million borrowers topping $1.3 trillion in federal student loan debt. College graduates in Florida face an average of $25,000 in debt when they graduate.
“Student loans have a chokehold on families legitimately trying to move forward and help their children have a better life than their parents and attain the American Dream. The crushing burden of student loan debt also hurts our economy because such debt forces young Americans to delay major life investments. Instead of buying a home, starting a business or saving for retirement, these educated and talented graduates are being forced to start their lives in the red. A recent survey found that 71 percent of student loan borrowers stated that their crushing debt has delayed their home ownership, prohibiting them from saving for down payments or making them feel too financially insecure to buy a home. Constraining young adults from investing in their future deprives our community and economy of the benefits of their hard work and ingenuity.”
The Democratic-led Congress from 2007-2010 took meaningful steps to help college students, including passing the American Opportunity Tax Credit, which boosted the maximum amount for Pell Grants and created an income-based repayment program, Castor said. But with states, like Florida, contributing less money for public education and tuition prices increasing much faster than the rate of inflation, students are borrowing more to pay for college. While the Republican-controlled Congress has done little to make this a priority and has not brought any major legislation to the floor for a vote to help students and graduates – such as reducing interest rates or restructuring loan repayment plans – Castor said she has filed or cosponsored numerous bills over the past several years to address student loan debt and has been joined by Tampa Bay’s student leaders to bring attention to this important issue.
“U.S. Sen. Nelson and I are fighting to give students and their families a better deal. Student loan debt is holding back today’s students and young people and their hopes for career success and good-paying jobs. For our country and all of us to prosper we must ensure that higher education is not just a luxury for the few, but an opportunity for all,” Castor said. “As students begin preparing for school this fall, we should work to ensure pathways to an affordable education for them. This will spur job growth, strengthen our economy and guarantee a bright and boundless future for our country.”
By the numbers:
- Student loans account for more than $1.3 trillion in consumer debt, the highest amount of consumer debt outside of a mortgage, and the average student borrower carries nearly $30,000 in education debt.
- In the state of Florida, students graduated with an average debt of $24,947. At the University of South Florida 60 percent of students graduated with loan debt averaging $22,611, and at the University of Tampa 60 percent of students graduated with student loan debt averaging $33,673. About 54 percent of students in Florida graduated with student loan debt.
- A 2016 survey by the National Association of Realtors and SALT (American Student Assistance) found that 71 percent of non-homeowners stated that student debt has delayed their home ownership.
- A study by the financial data website WalletHub shows Florida is among the worst states for people coping with student debt, ranked at No. 41, finding that Floridians with student loans took out more of them and have higher default rates.
- On average annually for the past five years, 10 percent of total student loan debt was at least 90 days delinquent or in default, according to the New York Federal Reserve Bank.
— Source, U.S. Rep. Kathy Castor
Over the past several years, Castor has cosponsored:
- H.R. 3048 Student Loan Interest Deduction Act, which would increase the deduction allowed for student loan interest;
- H.R. 1127 Student Loan Fairness Act, which would allow borrowers who owe more than they make to enter into a repayment plan and cap interest rates;
- H.R. 1614 Student Loan Refinancing Act, which would allow students borrowers to refinance their loans at current interest rates;
- H.R. 2366 Discharge Student Loans in Bankruptcy Act, which would allow borrowers to discharge student loan debt in bankruptcy; and
- H.R. 2477 Bank on Students Emergency Loan Refinancing Act, which would allow for the refinancing of certain Federal student loans.
— Source, U.S. Rep. Kathy Castor
Castor represents Florida’s 14th Congressional District, which includes Tampa and part of Hillsborough County.
For information about Castor, go to castor.house.gov.
Kathy Castor | Education | Student Loans | Student Debt | Tampa Bay News | TB Reporter
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