Like many college bound students, you took out a federal student loan to help cover the costs of your college education. You may have recently learned, these federal student loans are not eligible for refinance. If that sounds absurd to you, consider Sen. Elizabeth Warren’s idea to make up the lost revenue from student loan refinancing by making sure millionaires do not pay a lower tax rate than their assistants.
The dilemma now is that the soaring cost of a higher education is weighing down an entire generation. The simple solution would be to let Americans with federal student loans refinance at today’s low rate. But the reason why Congress hesitates to act is that the U.S. government is making a very large profit off these high-interest loans. Keeping Americans locked into interest rates of 6.8% would earn the government about $184 billion over the next 10 years.
Even though Sen. Warren is not the first to propose refinancing for federal student loans, she is campaigning strongly so that Americans can save thousands of dollars and put money back in the pockets of families who invested in education, simply by allowing people to refinance federal student loans.