Lujan: President's Actions on Student Loan Debt an Important Step; Time for Congress to Act
Washington, D.C. – Congressman Ben Ray Luján of New Mexico’s Third District highlighted an executive order signed by President Obama today that takes aim at the growing burden of student loan debt on young Americans. The action will create a new “Pay As You Earn” option for 5 million federal direct student loan borrowers, enabling them to cap their student loan repayments at 10 percent of their income. It will also promote awareness of repayment options and improve outreach to vulnerable borrowers and improve the information available to students and families. Luján called the President’s efforts an important step and called on Congress to take action that will further help millions of people facing tens of thousands of dollars in student loans debt.
“With college costs rising and more and more students and their families taking on debt to afford a college education, we need to address this serious issue,” Congressman Luján said. “President Obama’s executive order will help borrowers by capping repayments and promoting awareness of repayment options, but it is no replacement for Congressional action. Today, I am cosponsoring legislation that would allow millions of borrowers to refinance their existing student loans at lower rates. A college education unlocks the doors of opportunity and it is critical that more Americans have the chance to get their degree without taking on a mountain of debt – debt that is currently holding back a generation of Americans and putting a drag on our economy.”
Luján signed on to the Bank on Students Emergency Loan Refinancing Act, which allows federal and private student loan borrowers to refinance their loans at rates currently available to those taking out new federal student loans. Borrowers who are stuck with high interest rates can refinance loans for undergraduate education at 3.86 percent and loans for graduate education at 5.41 percent. A middle-class graduate who borrowed the national average of $30,000 for their undergraduate education could save more than $4,000 in interest payments over the life of the loan.
Currently in New Mexico 234,000 borrowers face $5.3 billion in outstanding student loan debt. The Bank on Students Emergency Loan Refinancing Act, along with President Obama’s executive action, would help address $1.2 trillion in student loans debt nationally, saving families across the country $70 billion.
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