Student loan debt relief

We favor allowing student loan debts to be converted to interest-free loans, refinanced through the federal government.

To the best of our knowledge, no legislation that would do this has been introduced in Congress.

Major party platforms on this issue:

The Democratic Party platform:

“As we make college affordable for future students, we will not forget about the millions of borrowers with unsustainable levels of student debt, who need help right now. Democrats will allow those who currently have student debt to refinance their loans at the lowest rates possible.

We will simplify and expand access to income-based repayment so that no student loan borrowers ever have to pay more than they can afford. And we will significantly cut interest rates for future undergraduates because we believe that making college more affordable is more important than the federal government making billions of dollars in profit off those loans.

Democrats will also fight for a student borrower bill of rights to ensure borrowers get adequate information about options to avoid or get out of delinquency or default. We will hold lenders and loan servicers to high standards to help borrowers in default rehabilitate and repay their debts. We will continue the important Public Service Loan Forgiveness and loan discharge programs begun by the Obama Administration.

Finally, Democrats will restore the prior standard in bankruptcy law to allow borrowers with student loans to be able to discharge their debts in bankruptcy as a measure of last resort. To make progress toward these goals, the government should offer a moratorium on student loan payments to all federal loan borrowers so they have the time and get the resources they need to consolidate their loans, enroll in income-based repayment programs, and take advantage of opportunities to reduce monthly payments and fees.”

The Republican Party platform makes no mention of this kind of relief for student loan debt.

Rationale

There is no justification for the federal government and private lenders to be profiting at the expense of people who are struggling with enormous debt from student loans. Offering relief from interest on student loans will enable former students to spend the money saved in other ways, stimulating the economy in the process.

Polling on this issue:

Extending the same low interest rates that the federal government gave big Wall Street firms in the wake of the crash of 2008, to college students who receive government loans for their education, was supported by 78% of voters, with 10% opposed and 10% neutral. This included 86% of Democratic voters, with 4% opposed and 10% neutral; 76% of independent voters, with 13% opposed and 9% neutral; and 71% of Republican voters, with 15% opposed and 11% neutral. (From a poll by GBA Strategies.)