Nelson Pitches Plan To Ease Student Debt

July 15, 2017

Meeting with college students and recent graduates dealing with the burden of student debt, U.S. Sen. Bill Nelson on Friday outlined legislation that would cap rates on federal undergraduate loans at 4 percent and allow the refinancing of older loans at lower rates.

In describing his bill on the Senate floor earlier this week, Nelson said the class of 2016 graduated with a national average of $37,000 in student loans.

“Instead of sending our graduates off to be creative and conquer the world, we’re sending them with a tremendous amount of debt that they are struggling to afford,” Nelson said.

The Democratic senator also noted the federal government raised the interest rate on undergraduate loans from 3.76 percent to 4.45 percent on July 1 for loans issued in the coming academic year.

Under Nelson’s bill, interest rates on undergraduate loans would be capped at 4 percent. Graduate loans would be capped at 5 percent. And loans arranged by parents would be at 6 percent.

The legislation would also lift a prohibition against refinancing older loans, allowing students who have high-interest loans to refinance them under the caps. The bill would also eliminate a loan origination fee that the federal government charges.

“What we are trying to do is to make this more affordable and uniform,” Nelson said. “Now, if somebody says, `Well, that means that the government is going to subsidize when the rate goes higher than 4 percent,’ then that’s right. Why? Because to have an educated workforce is in the interest of the country.”

Nelson’s remarks came during a meeting in Tallahassee with six students who attend or recently graduated from Florida State University or Florida A&M University.

The students all described facing debt loads of more than $30,000, with interest rates as high as 6.8 percent.

Louis Baptiste, who graduated from Florida A&M and earned a law degree from Florida State, said he is employed at a Tallahassee law firm but faces more than $100,000 in loan repayments.

“The student loan debt, it’s real for me because right now I’m in the process of buying a home,” Baptiste said. “But the loan debt is actually preventing me at the current time from buying a home.”

Nelson said student loan debt, which tripled from $531 billion in 2006 to $1.3 trillion a decade later, is second only to home mortgage debt.

“You can take all the credit card loans in the entire country and it’s not as much debt as student loan debt,” Nelson said. “It tells you the enormity of the situation.”

Nelson isn’t the only Florida lawmaker interested in helping ease the loan burden on students. U.S. Sen. Marco Rubio, R-Fla., and U.S. Sen. Mark Warner, D-Va., have filed a bill that would limit loan repayments to 10 percent of the student’s annual income, with a $10,000 offset.

For instance, a graduate who had a job paying $40,000 a year, would not have to make more than $3,000 in loan repayments, which represents 10 percent of $30,000.

Nelson called the Rubio-Warner legislation “a good idea” and said it could be incorporated in the loan reform package.

On other topics Friday, Nelson predicted the latest U.S. Senate health-care legislation, which seeks to repeal and replace Obamacare, is not likely to pass the chamber.

“I think it’s dead,” Nelson said. “I think there are going to be some broken Senate Republican arms, but they’ve got two (senators) against. They can’t afford another senator (to oppose the plan).”

Citing Medicaid cuts and the elimination of health-care coverage for “millions of people,” Nelson called the measure “just as bad” as earlier versions of the legislation advanced in Congress.

Nelson also said President Donald Trump should disband a “voter-integrity” commission after most states refused to turn over voter information to the federal panel.

“Why should the federal government collect every state’s information in one place so anybody that wants to go and hack that information, it makes it so easy for Vladimir (Putin) to suddenly go in and find out all kinds of personal things,” Nelson said.

by Lloyd Dunkelberger, The News Service of Florida

Comments

6 Responses to “Nelson Pitches Plan To Ease Student Debt”

  1. nod on July 18th, 2017 8:23 pm

    Maybe we should blame the Colleges and the universitys for charging too much and for paying their top professors and staff too much.
    Also any job and dedication will go a long way while in College.

  2. BT on July 18th, 2017 6:44 am

    Nelson is not suggesting that anybody be relieved of debt. You’re not being robbed. The government is involved because it is in the public interest to have an educated population.

    It’s not unreasonable to have a low interest rate on a loan that’s not dischargeable.

    I don’t see a reason for the outrage.

  3. KD on July 17th, 2017 9:41 am

    Part-time jobs don’t even begin to put a dent in college loan debt. Maybe they did in the ’70s or ’80s. Stop painting an entire generation as party-goers and spendthrifts. I’m lucky enough that I had scholarships and grants to cover my tuition, but the money I earned from my part-time job wouldn’t have stretched far enough to cover loan payments.

  4. nod on July 15th, 2017 12:29 pm

    Get a partime job and quit wasting your money on new cars and spring break and other partying. Buckle down get your degree like people did before the libs took over.

  5. area resident on July 15th, 2017 5:31 am

    First of all, Senator Nelson needs to retire. Secondly, why is the government even involved in student loans? If you are of college age, take on the responsibility of becoming an adult and stop expecting everything to be handed to you. Racking up college debt and then expecting everyone else to pay for it is stealing. Life is work; get used to it!

  6. Grand Locust on July 15th, 2017 1:30 am

    It is not a popular position, but guaranteed student loans should be limited to a set amount each year. These loans cannot be discharged in bankruptcy and would have the low 4% interest rate, and all other loans would be a market rate with no interest ceiling and could be discharged in bankruptcy. The banks have all the risk on students and the government. The risk needs to be distributed and the amount of loans limited. It is not uncommon to see students living off the loans and running them up to over a 100k. They graduate with a degree which can never support a job to pay it back. Indentured servants for the balance of their life.

Written by William Reynolds · Filed Under News