Edwardsville Intelligencer - The Issue of Student Loans

News Article

By Steve Horrell

Students should be able to refinance their college loans to take advantage of lower interest rates, according to U.S. Sen. Dick Durbin and Ann Callis, a Democrat from Edwardsville who is challenging incumbent Republican Rodney Davis for a seat in the 13th Congressional District.

The pair spoke recently during an appearance on the quad at SIUE They touted legislation that Durbin plans to introduce the second week of September that would allow students to renegotiate and refinance their student loans to a lower level of interest. Such a move would reduce the borrower's principle and thereby result in lower monthly payments, according to Durbin.

"Many of the students who are incurring this debt are finding it very, very difficult, later in life, to pay it off," he said. Unlike other types of debt, student loan debt is not dischargeable in bankruptcy court. "You should go in with your eyes wide open," said Durbin, "because it means you will have this debt until you pay it off. If your parents co-signed, they have joined you in an obligation until it is satisfied."

Durbin doubts that he would have ever finished his undergraduate degree or law school studies without loans, which he said he has since paid back. Rather than discouraging students from taking out loans, Durbin said he wants to make sure that such loans are affordable.

The reason for the bill, he said, is to ensure that after graduation they have a debt that is manageable and can be paid back without undue hardship.

The bill will be introduced in Washington, D.C., the second week of September. Durbin is co-sponsoring it along with Sen. Elizabeth Warren, a fellow Democrat, from Massachusetts.

"You can refinance your home. You can refinance your car. You should be able to refinance your student loan," Durbin said.

Andrew Flach, spokesperson for Davis' campaign, said that they will study the bill if it passes the Senate. In the past, he noted, the bill has been introduced in the Senate but failed to advance. Davis, Flach said, was pleased last summer that the House and Senate were able to prevent a drastic increase in the student loan rate by agreeing to "permanently take Congress out of the business of setting loan rates and move student loans to a market-based interest rate." The agreement, he said, "provides some much-needed, long-term certainty to students and their families who no longer have to rely on Congress to arbitrarily set rates."

In an emailed statement, Flach noted that the House has overwhelmingly approved the bipartisan "Empowering Students through Enhanced Financial Counseling Act." The bill ensures that students receive annual financial counseling "to understand their options, exactly how much they owe, and what that means for monthly payments before they sign on that dotted line."

The intent, Flach said, is to empower students "to make better decisions and prevent over-borrowing."

Callis spoke of a public defender she met who faced having to repay $250,000 in student loans. Because of her low income, she was able to defer them during her working years but faced substantial debt when she approached retirement, Callis said.

Near the end of her brief talk, Callis had to raise her voice above several protesters who began marching in front of her waving signs and shouting "Clueless Callis!" until staffers managed to steer them aside.

When Durbin spoke again he noted that the students had a First Amendment right to speak though he "would have liked a little bit of courtesy to go with it."
The event's organizers held a brief voter registration drive for SIUE students. The Nov. 4 general election, Durbin predicted, will be decided primarily by those who don't vote. "If students stay home and don't participate, someone else will make the decision about whether or not you can refinance your loan. We're asking for your help."

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