In a recent Op-Ed, two-term Minnesota Senator Al Franken shared his views on student loans and some legislation that he thought would improve things.
Not only did Senator Franken share the fact that he felt that student debt had an enormous negative impact on the economy, but he also recognized the hypocrisy in the advice that we give young people today.
According to Franken:
“Students are coming out of college with crippling debt that holds them back. Yet we keep telling young people that they need to go to college in order to aspire to the middle class.”
He also noted how students today have a much more difficult time paying for college than they did when he and his wife were students.
Senator Franken highlighted three pieces of legislation that he was sponsoring to help address these issues.
Consolidating at lower interest rates
With many borrowers sitting on loans with interest rates above 10%, Franken mentioned the importance of the Bank on Students Emergency Loan Refinancing Act. This legislation, co-sponsored by Elizabeth Warren of Massachusetts, would allow students to consolidate their debt with the federal government at lower interest rates. While this legislation has potential, the way it is currently written leaves us with mixed feelings.
Truth in College Costs
Franken also shared information on a bipartisan bill that he is sponsoring with Senator Chuck Grassley of Iowa. The bill, called the Net Price Calculator Improvement Act, helps potential students better understand the true cost of education. It would make tools available to families to estimate the cost at various schools before they choose to apply.
This is legislation that clearly doesn’t help borrowers already overwhelmed with student loans. That being said, it is a simple tweak to the current system that could help a number of students. It seems hard to conceive a reason to be opposed to this simple common sense solution.
Truth in Borrowing
Along the same lines, the bipartisan team of Franken and Grassley, are proposing legislation to help students make more informed decisions on borrowing. This additional bill would create a universal financial aid letter. Presently, schools are able to design their financial aid letters however they want. As a result, many students are often confused between the student loans that they must pay back and the grant money that need not be repaid.
The better informed students are about their borrowing, the less student loan confusion we will have. Once again, this is legislation that merely offers a minor tweak to a very troubled system. Even though it won’t fix many of the issues of student loans, it could help many, so it is definitely worth pursuing.
For the full Franken Op-Ed, click here.