- Senate Holds Hearings on Student Loans; Warren Introduces “Bank on Students Emergency Loan Refinancing Act”
- IN BRIEF: Senate Appropriations Committee Approves FY 2015 CJS Bill; Goodlatte Considers Blocking Administration’s College Ratings Plan; Senate Banking Committee Passes Terrorism Risk Insurance Bill
Student debt and college cost resurfaced as an issue this week in Washington, with two hearings on student loans in the Senate and the introduction of a new bill that would allow student borrowers to refinance their loans.
The Senate Budget Committee and a Senate Banking subcommittee both called witnesses Wednesday to discuss the implications of student debt for the overall economy.
At the first hearing, Budget Committee Chair Patty Murray (D-WA) said student loan debt has lasting repercussions for young adults as they start their careers and holds back the economy by limiting borrowers’ economic activity. She called on Congress to ease their burden by passing legislation allowing borrowers to refinance their federal student loan debt at today’s rates.
In his testimony, the Consumer Financial Protection Bureau’s (CFPB) Rohit Chopra said his agency has received thousands of complaints from borrowers describing the difficulties they face with their student loan servicers. He also referenced a recommendation in a CFPB report that Congress determine whether recent reforms to the credit card and mortgage servicing markets might apply to the student loan servicing market.
At the second hearing, by the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, senators discussed this current confusion among borrowers regarding the servicing of loans and the intricacies of repayment options.
In conjunction with the hearings, Sen. Elizabeth Warren (D-MA), a member of the subcommittee, introduced a revised version of the Bank on Students Emergency Loan Refinancing Act (S. 2292), which would allow individuals with student loan debt to refinance their federal and private student loans to the rates set by Congress last year for new borrowers. One of the potential roadblocks to the bill is that it would be paid for by enacting the so-called Buffett Rule. Senate Democrats will attempt to bring the bill to the floor for a vote on Wednesday. However, doing so will require that they muster at least 60 votes to begin debate on the measure. It is unlikely they will be able to do so.
The Senate Appropriations Committee on June 5 unanimously approved its FY 2015 Commerce-Justice-Science (CJS) funding bill. At $51.2 billion, the bill reflects a reduction of $398 million from FY 2014 levels and matches a similar House-passed measure approved last week. Within that total, the Senate bill provides $7.2 billion for the National Science Foundation, which is $83 million above FY 2014 funding levels, equal to the president’s FY 2015 request, and $200 million below the House bill. The timing of full Senate action remains unclear.
Rep. Bob Goodlatte (R-VA) announced in an email to colleagues May 21 that he hopes to insert a provision into an upcoming spending bill that would prohibit the Department of Education from moving ahead with the Obama administration’s plan to rate colleges. The congressman said he was responding to a range of concerns he has heard in conversations with college presidents about the ratings system.
The Senate Banking Committee on Tuesday approved the Terrorism Risk Insurance Program Reauthorization Act (TRIA) of 2014 (S. 2244), by a unanimous vote of 22-0. Originally enacted in 2002 and reauthorized twice already, TRIA created a public-private risk sharing mechanism which has helped ensure that colleges and universities can purchase sufficient affordable insurance coverage to protect against losses resulting from a terrorist attack. We sent a letter in April to the banking committee and the House Committee on Financial Services in support of reauthorization (each chamber’s version of the bill is slightly different). The existing TRIA program expires at the end of 2014.
Molly Corbett Broad
President of ACE