Washington, DC – Tuesday, at an event at the University of California, Berkeley, Congressman Mark DeSaulnier (CA-11) announced the introduction of the “Student Borrower Fairness Act” (H.R. 3675). This bill decreases student loan interest rates by allowing borrowers to refinance their interest rates at the rate offered to banks by the Federal Reserve. The costs are offset by increasing corporate tax rates on companies that pay their CEO or highest paid employee more than 100 times the median compensation of all employees.
“It is patently unfair that the same big banks that toppled our economy borrow from the federal government at extremely low interest rates while student borrowers are struggling to pay back their loans. Meanwhile, people of all ages are buried in student loan debt which holds them back from being able to buy a car, purchase a home, save for retirement, or start a family. This bill is a first step toward making sure our students can emerge from under their piles of crippling debt and enter tomorrow’s highly-trained workforce,” said Congressman DeSaulnier.
“College students and their families depend on student loans to access higher education. At Berkeley, we are proud that 61% of our undergraduates graduate without debt and the average debt of students who do borrow is only $17,584, much lower than the national average. This legislation would benefit all borrowers because it will help them manage their debt and repayment. I applaud Congressman DeSaulnier for working on behalf of all students,” said UC Berkeley Chancellor Dirks.
“Saint Mary’s College of California is built on the idea that education has the power to transform lives. The Student Borrower Fairness Act will provide opportunities for all students to pursue their dreams of a higher education, and ultimately highly successful lives. Student loan debt is a national issue and reducing it must be a national priority,” said Saint Mary’s College of California President James Donahue.
The scale of this problem cannot be overlooked. Outstanding student loans now total more than $1.3 trillion, surpassing total credit card debt. More than 37 million Americans have outstanding student loan debt, with an average outstanding balance of $29,400 for those who borrowed to get a bachelor’s degree. From 2004 to 2012, student loan debt rose an average of 14 percent per year.
In 2013, Congress acted on the issue of student loan rates, but the changes only applied to new borrowers. Congressman DeSaulnier introduced a similar bill addressing CEO pay when he served in the California State Senate.
