With students less than a week into the academic year, U.S. Rep. Mark Pocan, D-Wis., addressed college affordability at a press conference Tuesday at Memorial Union, where he introduced a federal bill that would allow students to refinance their federal student loans.
Under the new bill, students in the United States would have the opportunity to refinance their federal student loans to the lowest current interest rate, much like a home or car loan.
“While I know a lot of people are thinking about the new school year, I think a lot of people are also thinking about how they’re going to afford college,” Pocan said.
The average student loan debt is $26,000 dollars, and 67 percent of students graduate with debt, according to Pocan.
Pocan said that although Congress dealt “partially” with the issue of the Stafford loan rate expiring at the end of June, college affordability is a major issue for students and college graduates in the United States.
President Obama signed a bill into law that lowered the undergraduate student loan interest rate to 3.86 percent. The law also tied the interest rate for graduate and professional school loans to a 10-year economic cycle.
Pocan said if interest rates go up and a student’s interest rate is tied to the economic cycle, his or her rate could double, which is why the student loan refinancing bill is important.
People who refinanced their loan could pay back their loans more quickly, according to Pocan. They could also stimulate the economy with more expensive purchases.
During the press conference, a group of University of Wisconsin-Madison students from the Young Progressives held signs indicating support for Pocan’s bill, including a sign which read, “Don’t balance the budget on the backs of students.”
UW-Madison junior Gabbie Stasson said although she is fortunate she will have only a small amount of student loan debt, many of her friends have had to pay for school entirely on their own and they are worried.
“They have no idea what they are going to do,” Stasson said.