MINNEAPOLIS (WCCO) — Sen. Al Franken introduced legislation in Congress that would allow the refinancing of student loans.
Sen. Franken’s proposal comes just one week after the state of Minnesota announced its own student loan refinancing program, and as college affordability has become a major topic in the presidential race.
A recent study shows Minnesotans have the 5th highest student debt load in the nation with an average of just over $31,000. At the University of Minnesota, it’s not hard find students who are worried.Freshman Maria Gleason said,
“I think college is crazy expensive,” U of M freshman Maria Gleason said. “And it’s scary being a student and not being able to work all the time.”
Mathew Britton just becaome a doctor — his total student loan debt load about $300,000.
“It’s a burden I think of every day, every time I pull out my debit card and ask if I need the food that I’m getting, or the extra layer of clothes that I’m going to buy,” he said.
Sen. Franken made refinancing student loans a central part of his 2014 re-election campaign, but the proposal failed to get enough votes in Congress. He and a group of other senators are trying again.
“Why not be able to refinance at today’s more affordable interest rates?” Sen. Franken said. “You’re able to do that on a car loan. You’re able to do it on a mortgage. You’re able to do it on a business loan. You should be able to do it on federal student loans.”
While Sen. Franken’s measure does not require a minimum credit score to refinance, a program announced last week by the Minnesota Office of Higher Education does. The new state program requires either a 720 credit score, or a 650 credit score and a co-signer with a 720 score. In just one week, more than 400 loans have already been refinanced.
Larry Pogemiller is the director of the Minnesota Office of Higher Education.
“You could be someone who has a $40,000 loan at 8 percent and you could cut off $200 dollars on your monthly payments,” he said. “Or if you speed up you payments, you could cut off $25,000 of the interest payments you have to make.”
The state Office of Higher Education also announced this week a new, free counseling service for anyone who is struggling with their student loan payments. You can find out more about it on their website, or by calling 1-888-577-2227.