Beacon News - Despite Block in Senate, Foster Pushes House Bill to Help Students Get Lower Loan Rates

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By Kalyn Belsha

U.S. Rep. Bill Foster (D-Naperville) stopped by Aurora University a few days ago to promote a House bill that would allow student loan holders to get lower interest rates on their federal loans.

Under the legislation, students who took out federal loans before 2013 could refinance those loans at the lower interest rates offered to students last year. For undergraduates, that rate was 3.86 percent and for graduate students that rate was 5.41 percent.

The reductions would be paid for by increasing taxes on individuals with annual incomes over $1 million, often known as the "Buffett rule."

"For families that I talk to, it's a huge issue," Foster said.

Foster said he recently hosted a telephone town hall and was "startled" by the amount of interest, particularly from parents, about discussing the issue of student loan debt.

The Office of Management and Budget has estimated the legislation could benefit up to 25 million Americans and save the typical borrower $2,000 over the life of a loan.

The president has said he strongly supports the legislation, known as the Bank on Students Emergency Loan Refinancing Act. He recently issued an executive order that will allow more students to cap their monthly federal loan payments at 10 percent of their discretionary income by the end of 2015.

Foster is one of 137 co-sponsors of the House bill, which was introduced in May.

The bill is identical to legislation introduced in the Senate by Elizabeth Warren (D-Mass.) that failed to overcome a Republican-led filibuster in mid-June -- Warren was four votes shy of the 60 she needed.

Senate Republicans have criticized the bill for failing to reduce borrowing or lower the cost of higher education, and accused Democrats of using the issue to gain support before the upcoming midterm elections. The bill in its current form is unlikely to garner Republican support because it relies on a new tax to offset costs.

Megan Jacobs, a spokeswoman for Foster, said though the bill didn't succeed in the recent Senate vote, House Democrats are still pushing to pass the legislation. They consider it a key piece of legislation aimed at helping strengthen the middle class, she said.

Foster acknowledged that trying to alleviate student loan debt could become like the ongoing debate over immigration, in which members of Congress worked to build bipartisan support only to find the legislation blocked by party leaders.

"I hope this doesn't fall into that," he said.

Foster said the legislation has two hurdles: the government has to give up income from students who would be repaying less loan debt and the Buffett rule "is difficult to sell both parties on."

"There may be another way of paying for this legislation, I'm very open to it," Foster said, "because the student debt problem is huge for families in my district and I believe across the country."

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