AMHERST, Mass. (WWLP) – For many, a college education comes at a steep cost: years of paying back tuition loans. 22News found out how a new bill could help graduates pay off their loans faster.
In Washington, both Massachusetts U.S. Senators Elizabeth Warren and Ed Markey said this bill, known as the “Bank on Students Emergency Loan Refinancing Act,” would help make it possible for many to afford a higher education.
Student loan debt is at more than $1.2 trillion. Those who graduated years ago are still paying back loans at seven percent interest. Newer graduates only pay interest rates of 3.86 percent.
Senate Democrats want to allow graduates to refinance their debt at lower rates.
“Give it out to the college students who are going out to make a difference and give it out to everyone else who wants to make a difference and maybe they’ll give something back,” said Andrew Reftery, a sophomore at UMass Amherst.
The idea: the money saved on loans will boost the economy. Students said they like the idea, but wondered if it would make that much of a difference.
“Either way they’re putting back into the economy whether they’re paying the 7 percent back to banks or on cars and other services,” UMass Amherst Freshman Josh Hirschman told 22News.
The bill proposes to make up for lost revenue due to the cut in interest rates with taxpayers money. Students told 22News they think that’s going to be a hurdle in passing this bill through Congress.
“The short-term effects might be challenging on our economy, but the long-term effects will definitely be beneficial. The quality of life will go up,” said Alex Lyon, a UMass Amherst sophomore.
This bill is one of many Democrat-backed efforts focused on reducing the cost of college. Democrats expect to introduce a similar bill in the House too.