US Sen. Kirsten Gillibrand is renewing a call for legislation that would allow student borrowers to refinance their federal student loans at lower interest rates, urging President Barack Obama to push the effort in his State of the Union speech Tuesday.
The New York Democrat said there's currently about $1.2 trillion in student loan debt nationwide — and the average New York graduate owes more than $27,000.
"We must strengthen our middle class families instead of forcing New Yorkers deeper into debt," she said in a statement. "Keeping a high-quality education in New York affordable is the right thing to do."
Last May, Gillibrand introduced the Federal Student Loan Refinancing Act, legislation she said could affect nearly nine in 10 federal student loans by allowing borrowers who have a higher interest rate to refinance at a fixed rate of 4 percent. Most rates for federal student debt are higher than 6 percent, she said.
There are 40 million borrowers nationwide, and 2.7 million in New York, Gillibrand said.
Gillibrand planned a news conference on the issue for Sunday afternoon. Kevin Stump, the higher education program coordinator at the New York Public Interest Research Group, was to join Gillibrand in urging the president to commit to the legislation.
Refinancing legislation would increase disposable income, allowing students and recent graduates to spend money in ways that could boost the economy, Gillibrand said.
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