May 18, 2017
WASHINGTON, D.C. – Today, U.S. Senators Angus King (I-Maine) and Richard Burr (R-N.C.), along with Senators Rob Portman (R-Ohio), Mark Warner (D-Va.), Roger Wicker (R-Miss.), Joe Manchin (D-W.Va.), Susan Collins (R-Maine), and Jeanne Shaheen (D-N.H.), today reintroduced legislation to reform federal student loan repayment programs.
The Repay Act, which Senators King and Burr originally introduced in 2014, would simplify the complex maze of federal student loan repayment programs by consolidating many of the benefits of current repayment programs into two plans: a fixed repayment plan, based on a 10-year period, and a single, simplified income-driven repayment option.
“The federal government’s student loan repayment programs, although well-intentioned, have grown to be complicated and confusing and no longer serve the best interests of America’s students or the taxpayers,” Senator King said. “The government should be making it easier for students to pursue their dreams after graduation – not saddle them with the added anxiety of wading through perplexing government paperwork. This bipartisan proposal simplifies loan repayment by consolidating many of the benefits of the existing plans, making it easier for students to decide which option best fits their needs, and lowering the chance they will default on their payments.”
“The current student loan repayment programs are too complicated and too expensive,” said Senator Burr. “The Repay Act has two very simple goals: first, give students straightforward options on how to repay their student loan debt; and second, limit the excessive taxpayer-funded subsides that are incentivizing families and students to borrow too much. We have made a lot of progress in reducing student loan interest rates. The Repay Act is an important next step toward improving higher education financing options for students and families.”
“With student loan debt at record levels and tuition more than doubling in just a decade, a lot of talented kids feel like college is financially out of reach,” Senator Portman said. “The Repay Act would ensure that they would never have to pay more than 15 percent of their disposable income in student loans. That would help them manage their day-to-day expenses, so that they wouldn’t have to put off milestones like buying a house. This legislation would benefit all of us because it would help our economy. More importantly, it would give millions of American families stability and peace of mind.”
“Higher education is the key to opportunity and the best way to keep the United States competitive in the global marketplace, and to keep the best and brightest in West Virginia. But, burdening our students with trillions in student loan debt only hinders our progress as a nation,” Senator Manchin said. “I’m glad to join my colleagues on this bipartisan legislation that will simplify loan repayments for students and families so they can focus on getting the best education they can and being a productive member of society.”
“The Repay Act streamlines the federal loan program and ensures that graduates have affordable payment options in a way that is simple and intuitive,” Senator Warner said. “This bill incorporates several of the concepts from legislation I have introduced with Senator Rubio, and I am encouraged to join this bipartisan group of colleagues in advocating for these much-needed reforms. Virginia students, graduates, and families are looking for student loan reforms that allow them to meet their obligations while also providing necessary protections.”
“Today, thousands of Granite Staters are struggling with the increasing costs of higher education, which is why we need to do everything we can to make college more affordable and accessible,” said Senator Shaheen. “The Repay Act is a bipartisan effort to streamline the complicated maze of federal student loan repayment and help students manage their debt and save money on their loans. Students should be able to pursue higher education with the confidence that they can effectively manage and repay their loans.”
“Education plays a vital role in opening the doors of opportunity to all Americans. Having worked at Husson University in Bangor, I know firsthand how critical financial aid is to students and their families,” said Senator Collins. “By simplifying the government’s student loan repayment programs, our legislation will help students and their families determine which options work best for them when making important decisions about borrowing for college.”
Current graduates face a maze of federal student loan repayment programs from which to choose that often leave students confused about which program best fits their needs. In addition, due to years of changing eligibility terms and the introduction of new programs, little has been done to ensure that taxpayer dollars are not misdirected in subsidizing borrowers who do not need additional assistance.
The Repay Act addresses those issues to make loan repayment more affordable for the middle class by eliminating duplicative repayment options, streamlining eligibility terms, and ensuring that borrowers will never direct more than 15 percent of their discretionary income to their loan payments. The proposal also ends the disproportionate federal subsidization of loan payments for high income borrowers and sets parameters for the amount of debt that can be forgiven over certain periods of time.
This legislation is estimated to save taxpayers hundreds of millions of dollars over the next decade.