Durbin and Duckworth Introduce Bipartisan Servicemember Student Loan Affordability Act
[WASHINGTON, DC] – U.S. Senator Dick Durbin (D-IL) and Congresswoman Tammy Duckworth (IL-08) introduced the bipartisan Servicemember Student Loan Affordability Act. Duckworth introduced the bill with Congressman Gus Bilirakis (R-FL) in the House and Durbin introduced the bill with U.S. Senators Richard Blumenthal (D-CT), Sherrod Brown (D-OH), Ed Markey (D-MA), Patty Murray (D-WA), Jon Tester (D-MT) and Sheldon Whitehouse (D-RI) in the Senate.
The legislation would fix a provision in the Servicemembers Civil Relief Act (SCRA) – created in 1940 – that unintentionally discourages members of the military from consolidating or refinancing pre-service student loans. A provision in the SCRA protects servicemembers from high interest rates by capping interest rates at 6% on loans that they took out before entering active duty military service. However, if a servicemember consolidates or refinances their student loans that new loan is no longer eligible for this protection, preventing them from taking advantage of both the Public Service Loan Forgiveness program and the interest rate cap.
“Loan refinancing and consolidation is a practical, effective way to manage student loan debt,” said Durbin. “Taking advantage of today’s historically low interest rates is a smart financial decision that could save borrowers thousands of dollars over the life of the loan. With the Servicemember Civil Relief Act and the Public Service Loan Forgiveness Program, Congress did not intend to force servicemembers to give up the 6% interest rate cap today for a chance to earn loan forgiveness in the future. The bill I introduced with Representatives Duckworth and Bilirakis and my colleagues in the Senate is a common sense fix that will empower servicemembers to use every available tool to better manage their student loan debt.”
“Our Service men and women are willing to give their lives for this country and it is imperative that we support them in every way possible,” Duckworth said. “This legislation would allow servicemembers to keep a 6% interest rate on their loans while also being eligible for loan forgiveness in the future. I am proud to work with Senator Durbin on this crucial issue, and introduce this legislation in the House with Congressman Bilirakis. Together we can make higher education more affordable for our nation’s heroes.”
The Durbin-Duckworth Servicemember Student Loan Affordability Act would allow pre-service private or federal student loan debt to be consolidated or refinanced, while retaining the 6% rate cap under SCRA. This enables servicemembers with Federal Family Education Loans or Perkins student loans to enroll in the Public Service Loan Forgiveness program while they are serving and still take advantage of the 6% rate cap under SCRA.
With average student loan debt for active-duty servicemembers reaching more than $25,000, this is a widespread issue for military families. This bill has support from the American Legion, Veteran Education Success, NEA, AFT, SEIU, Young Invincible, Center for Responsible Lending, National Consumer Law Center, Consumer Federation of America, Education Trust, Consumers Union, The Institute of College Access and Success, Association of the United States Navy and the National Guard Association of the United States.
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