Sen. Johnson decries Senate's failure to pass student loan reform
Americans ought to be able to refinance their student loans just as they can refinance their mortgages when interest rates dip, Sen. Tim Johnson, D-S.D., said Wednesday.
A bill that would have paved the way for this reform was blocked by Senate Republicans, who contended in national reports that the bill was merely election-year posturing by Democrats. They also complained the bill had not gone through the committee process.
But Johnson said that, as student loan debt tops $1.2 trillion and has surpassed America's collective credit card debt, reform is needed to help both individual borrowers and the nation's economy.
"South Dakota has the highest percentage of students graduating with student loan debt in the nation. Seventy-eight percent of South Dakotans must take out loans to finance their education," Johnson said. "I frequently hear from borrowers who are struggling to keep up with payments. A college education should be an opportunity to achieve the American dream, not a road to hardship."
While middle class incomes have stagnated, college costs have "soared by four times the rate of inflation" between 1985 and 2011, Johnson noted, while federal student aid has been trimmed.
The burden is felt by families but also by the economy, as workers avoid paying to obtain the skills needed in the economy and those who did borrow money defer homeownership and launching businesses due to their student debt.
"College represents one of the surest paths to the middle class, yet it has become increasingly difficult for young people and families in South Dakota and throughout the nation to afford it," Johnson said. "Our economy relies on skilled workers, and we must maintain this important pipeline. ... It makes no sense to me that there should be an argument about this."
The bill's lead sponsor, Sen. Elizabeth Warren, D-Mass., told national reporters Wednesday that she would continue to push for a vote on the bill.
Johnson said Senate Democrats are likely to push to include Warren's proposals when Congress works to reauthorize the federal Higher Education Act in the coming year.