Durbin, Duckworth Introduce Bill Expanding Student Loan Refinancing For Service Members
Bill would allow service members to consolidate or refinance pre-service or federal student loan debt, and retain six percent rate cap
WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL) and U.S. Senator Tammy Duckworth (D-IL) today introduced the Servicemember Student Loan Affordability Act, legislation that would amend the Servicemembers Civil Relief Act (SCRA) to allow service members to consolidate or refinance student loan debt they had when they entered the military and continue to benefit from the six percent interest rate cap to which they are entitled through the SCRA. A provision in the SCRA protects service members from high student loan interest rates by capping interest rates at six percent on loans that they took out before entering active-duty military service. However, if a service member consolidates or refinances their student loans, which is required for Federal Family Education Loans or Perkins student loan borrowers to benefit from the Public Service Loan Forgiveness (PSLF) program, that new loan is no longer eligible for this interest rate protection.
“The Servicemember Student Loan Affordability Act makes a commonsense fix to the SCRA, ensuring service members are no longer faced with an impossible choice when it comes to consolidating the debt they owe on loans before they entered military service. When someone decides to serve in the military, we shouldn’t put up bureaucratic roadblocks that make it harder for them to pay back their student loans,” Durbin said.
“We should be doing everything we can to make higher education more affordable for all Americans, especially those who choose to serve in the military,” Duckworth said. “I’m proud to continue working with Senator Durbin on this commonsense legislation that would protect our Servicemembers from high interest rates when they consolidate or refinance their student loans.”
According to a report by the U.S. Government Accountability Office, as of 2020, nearly 200,000 active-duty service members held federal student loan debt, and nearly half of those active-duty service members had balances more than $13,000.
With an outstanding balance of more than $1.6 trillion, student loan debt has surpassed credit cards as the largest cumulative consumer debt in America, second only to mortgages. Student loan debt falls particularly hard on service members, who too often, find it difficult to work with student loan servicers and receive the benefits to which they are entitled. The Servicemember Student Loan Affordability Act would ensure federal law does not interfere with service members obtaining the benefits they have earned by serving our country.
U.S. Senator Michael Bennet (D-CO) is a cosponsor of the legislation.
The Servicemember Student Loan Affordability Act has earned the endorsement of Veterans Education Success, Paralyzed Veterans of America, the Tragedy Assistance Program for Survivors, the Military Officers Association of America, The Institute of College Access and Success, the National Education Association, and the American Federation of Teachers.
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