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Release date 06/11/2014
WASHINGTON — Consumers Union, the policy and advocacy arm of Consumer Reports, today urged senators to support legislation that would allow those with outstanding student loan debt to refinance at the lower interest rates currently offered to new borrowers.
Consumers Union said the bill, the Bank on Students Emergency Refinancing Act (S. 2292), would save consumers billions of dollars by providing all student loan borrowers the opportunity to refinance old loans down to the lower rates Congress put in place last year for new loans.
The Senate is expected to bring up the bill, sponsored by Sen. Elizabeth Warren of Massachusetts, for consideration today.
In a letter to Sen. Warren from Consumers Union senior policy counsel Pamela Banks and CU staff attorney Suzanne Martindale, the organization said the bill would help an individual borrower save thousands over the life of a loan. “It will help borrowers pay down their loans faster and give them the chance to put the extra money they save each month toward purchases or investments that stimulate the economy,” CU wrote.
Approximately 40 million consumers currently have student loan debts totaling $1.2 trillion. Most of these loans come with interest rates that are fixed at the time the loan is taken out. Since the 2008 financial crisis, market interest rates have been at historic lows, while most federal student loan rates have been stuck at 6.8% or higher.
“Repaying student loans has put an enormous strain on individuals. Too many borrowers have had to delay purchasing cars or homes, saving for retirement, or their dreams of starting a small business. As a result, the impact of student loan debt has troubling consequences for the entire economy,” CU wrote.
“Consumers with mortgages can refinance their loans, student loan borrowers deserve the same opportunity,” the group wrote, saying the bill promotes “common sense solutions to the student debt crisis that will have a meaningful impact on the lives of millions.”
Media Contacts:
David Butler, Consumers Union, 202.462.6262 or dbutler@consumer.org
Kara Kelber, Consumers Union, 202.462.6262 or kkelber@consumer.org
Consumer Reports is a nonprofit membership organization that works side by side with consumers to create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product testing and ratings, rigorous research, hard-hitting investigative journalism, public education, and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or other commercial influences, CR has exposed landmark public health and safety issues and strives to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto safety standards, to winning food and water protections, to enhancing healthcare quality, to fighting back against predatory lenders in the financial markets, Consumer Reports has always been on the front lines, raising the voices of consumers.
© 2014 Consumer Reports. The material above is intended for legitimate news entities only; it may not be used for advertising or promotional purposes. Consumer Reports® is an expert, independent, nonprofit organization whose mission is to work side by side with consumers to create a fairer, safer, and healthier world. We accept no advertising and pay for all the products we test. We are not beholden to any commercial interest. Our income is derived from the sale of Consumer Reports® magazine, ConsumerReports.org® and our other publications and information products, services, fees, and noncommercial contributions and grants. Our Ratings and reports are intended solely for the use of our readers. Neither the Ratings nor the reports may be used in advertising or for any other commercial purpose without our prior written permission. Consumer Reports will take all steps open to it to prevent unauthorized commercial use of its content and trademarks.
Consumer Reports is a nonprofit membership organization that works side by side with consumers to create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product testing and ratings, rigorous research, hard-hitting investigative journalism, public education, and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or other commercial influences, CR has exposed landmark public health and safety issues and strives to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto safety standards, to winning food and water protections, to enhancing healthcare quality, to fighting back against predatory lenders in the financial markets, Consumer Reports has always been on the front lines, raising the voices of consumers.
© 2014 Consumer Reports. The material above is intended for legitimate news entities only; it may not be used for advertising or promotional purposes. Consumer Reports® is an expert, independent, nonprofit organization whose mission is to work side by side with consumers to create a fairer, safer, and healthier world. We accept no advertising and pay for all the products we test. We are not beholden to any commercial interest. Our income is derived from the sale of Consumer Reports® magazine, ConsumerReports.org® and our other publications and information products, services, fees, and noncommercial contributions and grants. Our Ratings and reports are intended solely for the use of our readers. Neither the Ratings nor the reports may be used in advertising or for any other commercial purpose without our prior written permission. Consumer Reports will take all steps open to it to prevent unauthorized commercial use of its content and trademarks.