The amount of money Americans owe in student loan debt has tripled in the past decade — to $1.2 trillion.
Senate Democrats — led by Massachusetts' Elizabeth Warren — introduced a bill earlier this month that would let borrowers refinance their private and public student loans to take advantage of the lower rates current students are receiving from lenders.
"When interest rates drop, people can refinance their home, they can refinance their business debt. It's regarded as a smart move for any consumer or business. But student borrowers are prohibited from doing that under most programs," Warren told MassLive.com. "This bill says we're going to change that and let them refinance that down to current low rates."
Warren said the measure, which would also allow those with privately held student loan debt to refinance their debt under the Federal Direct Loan program, equals savings for the consumer, which would be funneled back into the economy. It would also take a crack at the statistic showing that one in seven borrowers defaults on their student loans within three years of beginning repayment.
More than half of millennials in a recent poll said that they're worried about repaying their student loans. On The Daily Circuit, we look at how a refinancing option would work and whether there is potential for it to become law.