Sen. Sheldon Whitehouse (D-RI) recently introduced legislation that would allow borrowers to refinance federal student loans at zero percent interest.
The Zero Percent Student Loan Refinancing Act helps speed efforts to repay loan principal while easing the burden on those in debt.
“Big interest payments on student loans can create a treadmill of debt that many Americans can’t escape,” Whitehouse said. “These interest payments often stand between borrowers and the financial freedom to focus on the future, whether it’s buying a home, saving for retirement or investing in their children. This bill will help people repay their loans faster and get on with their lives.
Per the legislation, all federal borrowers eligible for FFEL, Direct, Perkins and Public Health Service Act student loans could refinance the loans through December 31, 2024.
Whitehouse cited a 2021 joint report from the National Consumer Law Center and the Center for Responsible Lending determining that 63% of student borrowers submitting payments during the CARES Act payment pause owe more now than they borrowed from. ‘origin.
The Federal Reserve Bank of St. Louis maintains that student borrowers owed a total of $1.75 trillion to the federal government and private lenders as of April 2022.