2014 Midterms

Senate Democrat To Introduce Bill To Allow Student Loan Refinancing

Courtesy: AP/Michael Dwyer

Courtesy: AP/Michael Dwyer

Senator Elizabeth Warren (D-MA) is set to introduce a bill this week that would give individuals locked in with high interest student loans the opportunity to refinance the loans at a lower interest rate.  College affordability is expected to be a big topic in the upcoming election, and Democrats are hoping to make it an issue they hope to be able to pit up against Republicans, trying to demonstrate to younger voters that they are more in line with them than the GOP.  It is all part of their “Fair Shot Agenda”, the same agenda where they have sought to raise the minimum wage and pass equal pay.  It is expected that this legislation could come to the floor in early June. 

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Senate Democrats are lining up their next election-year agenda item: college affordability.

And they are drafting one of their party’s highest-wattage stars, Sen. Elizabeth Warren of Massachusetts, to play a central role in the debate.

Democrats are preparing to hold a vote on higher education legislation toward the beginning of June, according to a senior Democratic aide, likely based off a Warren bill expected later this week. The Democratic legislation seeks to allow people locked into sky-high interest rates years ago to refinance their student loans at much lower rates.

Last year’s deal on federal student loans deeply divided the Democratic Party, as liberals like Warren angled for much lower rates than a bipartisan agreement negotiated by the White House and drafted by senators like Joe Manchin (D-W.Va.) and Richard Burr (R-N.C.). That compromise resulted in a new law that reversed a doubling of interest rates last July but left many progressives unsatisfied, with 17 members of the Senate Democratic Caucus voting against the legislation.

Now Democrats are seeking to use student loans as a unifying force, slotting it as the next item in their “Fair Shot Agenda” that’s included votes on raising the minimum wage and paycheck fairness already this year. These bills are designed to contrast Democratic values with those of the GOP by daring Republicans to reject poll-tested legislation.

“Our next fair shot agenda item: This week, Elizabeth Warren will introduce legislation on making it easier to pay for college,” said Fair Shot architect Sen. Chuck Schumer (D-N.Y.) in an interview on “Morning Joe” on Monday. He indicated the Democratic bill will seek to allow students to refinance with interest rates as low as 3 percent and warned that growing student loan debt is hurting the housing market’s recovery.

But actually passing the legislation is another matter and the bill will have trouble getting GOP support because it will require revenue, likely through changes in the Tax Code. Several Senate Republican sources were unaware of the legislation, placing doubts on whether such a bill can attract bipartisan support and the 60 votes required to pass the Senate.

“There is a path to success on the student loan issue. And bipartisanship is the path,” a senior GOP aide said. “Young people see through this: They know that a Democratic press release doesn’t mean anything specifically to them.”

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