With graduation season winding down, there is a renewed emphasis on student loans as graduates gear up to start paying back their debt.
New York Senator Kirsten Gillibrand (D) introduced legislation that would allow students to refinance their student loan debt. This bill was introduced back in May, but it would allow for the refinancing of undergraduate loans at 3.86 percent and graduate loans at 5.14 percent.
Another bill introduced by North Carolina Senator Kay Hagan (D) would help veterans with their student loans by lowering their interest rates and provide extra support to veterans.
According to the Fayetteville Observer:
“Hagan said her bill would simplify the process for troops to lower their interest rates and would extend those interest rate protections to one year after active duty to allow veterans time to find jobs.
It also would require the Department of Defense, the VA and the Department of Education to work together to automatically discharge loans for veterans who are found to be 100 percent disabled, and would require the Department of Education and the IRS to work together to ensure that troops in combat do not accrue interest on their loans while deployed.
Deployed troops already are protected from interest accruing, Hagan said, but few receive the benefit.
Since 2008, when the benefit was first signed into law, it has been used only 633 times, Hagan said.
The bill also would extend some protections to military spouses, creating a deferment program that would allow spouses 180 days to find a job and get settled following permanent change of station moves.
The legislation would direct the secretary of education to create a single enrollment form for service members to invoke existing military-specific protections, cutting down on paperwork and bureaucratic red tape, Hagan said, while also establishing clear definitions for military terms as they relate to student loan programs.
It also would require the Department of Education to incorporate the military and veteran status of borrowers into the National Student Loan Data System and would create a cross-agency working group to ensure veterans have the best resources and tools to help decide on a school.”
This comes at a time when more people are making the connection between student loan debt and the housing recovery. According to a recent report, 2012 was the first year where student loan borrowers had lower home ownership rates than young people who did not have student loan debt. It’s being reported that President Obama will soon unveil plans to deal with student loan debt.