A proposal to allow refinancing of student loans to reduce the amount of debt owed by millions of Americans nationwide was turned down by the Senate on June 11.
The Bank on Students Emergency Loan Refinancing Act, sponsored by Democratic Sen. Elizabeth Warren, focused on student loans already owned and dispensed before 2010 by the Department of Education and promised a drop in those loan payments.
The bill could have allowed Americans with federal and private loans to refinance at 3.86 percent and would have covered the extra costs by raising taxes for wealthier families. According to the Federal Reserve, unpaid student debt has doubled to nearly $1.3 trillion since 2007. Of the 40 million Americans that deal with student loan debt, the average borrower owes almost $30,000.
“While I agree something needs to be done to help student loan debt, Elizabeth Warren’s bill to refinance student loan debt by taxing the upper class more is not the answer,” said Trey Justice, College Republicans at UTA member and business management senior.
The proposal could not raise the 60 votes it needed to overcome a Republican filibuster and failed with a vote of 56-38.
“I think whatever they have to do to lower the debt, they should do,” mechanical engineering senior Sodiq Kazeem said.
Larry Carter, political science senior lecturer, said that though student loan debt is a popular issue, no future efforts to control that aspect of the economy will be passed because of cost and party issues.
“The Republicans voted against it mainly because it would cost money,” Carter said. “They would have to pay to make those cuts to lower the interest rate and someone has to pay the difference.”
Carter also said another reason no future proposals will be passed is because of the Democratic and Republican gridlock in the Senate.
“I don’t think anything will happen until the end of President Obama’s term,” Carter said. “Even if the Republicans get control of the Senate, which is 50/50 at best, Obama wouldn’t pass anything that will raise the taxes, so we’re locked.”
All but three Republican senators voted against the idea, including Texas Sens. Ted Cruz and John Cornyn, urging the fact that the proposal wouldn’t help the rising cost of college and wasn’t the most efficient way for former students to manage their debt.
“Billionaires or students?” Warren asked in a speech aired on C-SPAN 2. “People who have already made it big or people who are working to build their futures? With this vote, we show the American people who we work for in the United States Senate: Billionaires or students.”
Sen. Lamar Alexander, the top Republican on the education committee, said current and future students are of more importance than past students trying to manage their debt.
No current changes have taken place to lower the interest rates, but Kazeem said students should be more aware of the effects of borrowing loans and the responsibilities that come with them in the future.
“I was the first person in my family to go to college, and I didn’t know about loan details, so I think students should really be informed about their loans and the debt that comes with it,” he said.