Sen. Al Franken: Student loan debt is damaging America’s economic growth [View all]

http://www.marketwatch.com/story/sen-al-franken-student-loan-debt-is-damaging-americas-economic-growth-2015-05-28

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Things have changed a lot since my wife Franni and I went to college in the early 1970s. A full Pell Grant paid for almost 80% of a public college education. Today, it pays for less than 35%.

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Part of the reason that this debt is long term is because borrowers are paying high interest rates. Many college graduates are locked into loans with interest rates as high as 10%, which makes it all the more difficult to pay off. When interest rates are low, homeowners, businesses and even local governments regularly refinance their debts. However, the federal government – despite being the biggest student lender by far – offers no refinancing option to student borrowers. Once you graduate with high interest rates, you’re stuck with that high interest rate forever.

So I’m doing something to fix that problem. Earlier this year I joined Sen. Elizabeth Warren from Massachusetts in introducing the Bank on Student Emergency Loan Refinancing Act. Our legislation will allow borrowers to take advantage of lower interest rates and refinance their student loans. This will help millions of Americans, like Joelle, cut down their debt and keep more of their hard-earned paychecks.

I also wrote two bipartisan bills with Republican Sen. Chuck Grassley of Iowa that would help students and families better understand college costs before taking on debt. Our Net Price Calculator Improvement Act makes online cost-calculation tools more user-friendly in order to give students and their families a better estimate of college expenses before they decide where to apply. Sen. Grassley and I have another bill that will require schools to use a universal financial aid letter. Right now, these letters are confusing – they often don’t clearly explain the difference between a grant and a loan, which means students and families may take on debt that they don’t know they have to pay back. Our bill would make sure that students and their families get uniform information so they can make apples-to-apples comparisons between what the different schools are offering.