The legislation, which Klobuchar and Franken cosponsored, would allow more than half-a-million Minnesotans with outstanding student loan debt to refinance at lower interest rates that are currently available to new borrowers 

The Senate is expected to vote on the legislation tomorrow

 WASHINGTON, D.C. – Ahead of a key vote tomorrow, U.S. Senators Amy Klobuchar and Al Franken today highlighted a new report showing that more than 560,000 Minnesotans would benefit from a student loan refinancing bill which Klobuchar and Franken cosponsored. According to the U.S. Department of Education, the Bank on Students Emergency Loan Refinancing Act authored by Senator Elizabeth Warren (D-MA) would allow more than half-a-million Minnesotans with outstanding student loan debt to refinance at lower interest rates that are currently available to new borrowers.

“Student loan debt is hanging like an anchor around the necks of our students and our entire economy,” Klobuchar said. “By letting students refinance their loans at lower interest rates, this commonsense legislation would put more money back in the pockets of hundreds of thousands of Minnesota students and help ease the crushing burden of student loan debt. At a time when higher education has never been more important, we simply can’t afford to sit back and watch our young people get priced out of a brighter future.”

“For students and families in Minnesota, college is getting harder to pay for and students are taking on more and more debt,” Franken said. “We can’t afford to saddle our students with high interest rates on loans that continue to burden them long after graduation. There are about 560,000 people who attended college in Minnesota who would be able to benefit from the Warren-Franken bill, and they deserve the opportunity to cut down their debt and keep more of their hard-earned money.”

The legislation would allow all eligible Federal Family Education Loan (FFEL) Program and Direct student loan borrowers to refinance their high-interest loans down to 3.86 percent – the rate that is offered to new federal borrowers because of the Bipartisan Student Loan Certainty Act which was signed into law last summer. Under this bill, graduates and PLUS borrowers would also pay their loans under the 2013 rates at 5.4 and 6.4 percent respectively. The bill also allows people who are in good standing to refinance their high-interest private student loans down to the rates offered to new federal student loan borrowers this year. Those who refinance would also have access to the benefits and protections of the federal student loan program.

The full data is below:

Number of Federal Student Loan Borrowers Estimated to

Benefit from Loan Refinancing By State

(Senate Bill 2342)

Source: U.S. Department of Education Estimates, June 2014.

Notes: Other* includes U.S. territories other than Puerto Rico and foreign countries where the eligible citizen resided, or where the eligible institution is located.  State by state estimates include where the borrower resided when he or she last received a loan or, in a small number of cases, where the borrower last attended college.

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