Durbin, Duckworth Introduce Bill Expanding Student Loan Refinancing For Servicemembers
Bill Would Allow Servicemembers To Consolidate Or Refinance Pre-Service Private Or Federal Student Loan Debt, And Retain Six Percent Rate Cap
WASHINGTON – U.S. Senators Dick Durbin (D-IL) and Tammy Duckworth (D-IL) introduced the Servicemember Student Loan Affordability Act, legislation that would amend the Servicemembers Civil Relief Act (SCRA) to allow servicemembers 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 servicemembers from high interest rates by capping interest rates at six percent on loans that they took out before entering active duty military service. However, if a servicemember 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.
“This bill makes a commonsense fix to the SCRA so servicemembers 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 be working with Senator Durbin on this common-sense legislation that would protect our Servicemembers from high interest rates when they consolidate or refinance their student loans.”
The average student loan debt for active-duty servicemembers graduating from college in 2008 was more than $25,000. Hovering around $1.56 trillion, student loan debt has surpassed credit cards as the largest cumulative private debt in America, second only to mortgages. It can effect servicemembers particularly hard. Too often, servicemembers find it difficult to work with student loan servicers and get the benefits which they are eligible to receive.
The following organizations support the Servicemember Student Loan Affordability Act: The American Legion, Association of United States Navy, TREA: The Enlisted Association, Paralyzed Veterans of America, Veteran Education Success, The Institute of College Access and Success, and National Education Association.
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