Former UC Regent outlines Student Loan Refinancing and Recalculating Act of 2016
In a press conference held at the UC Davis Student Community Center on Tuesday, May 3, United States Rep. John Garamendi (D-CA) introduced a student reform bill intended to reduce the burden of current and future student debt. The Student Loan Refinancing and Recalculating Act (SLRRA) of 2016 will be formally introduced to the legislature next week.
“Student loans are actually very relevant to students here at Davis where over half of UCD students pay no tuition at all, but a lot of students take student loans,” said ASUCD President Alex Lee, who introduced Representative Garamendi at the press conference. “For the most part, loans are just a looming cloud because we work to pay one bill at a time.”
SLRRA contains four objectives that Garamendi calls the “four R’s.” The first is refinance, which would allow students to lower interest rates on current loans. Recalculate, the second objective, lowers rates for new student loans. The third objective is to reduce student loan burdens, and the fourth is to reinvest in students by eliminating the financial burden of debt.
Representative Garamendi praised the work of Sen. Elizabeth Warren (D-MA) in her work on student loan refinancing, but noted that his bill is unique in that it aims to relieve both undergraduate and graduate students’ debts. The bill would also ensure that low-income students would not accumulate debt on loans while they are in school.
Additionally, SLRRA would eliminate student loan origination fees on Federal Direct Loans, which can be up to 4.27 percent of loans. Representative Garamendi noted that these reforms would help graduates who delay marriage, buying a home, or other life events because of student loan burdens.
“When you buy a house, you can refinance your house, but you can’t refinance your student loans. I’ve always wondered what’s wrong with the American system where you can’t refinance your student loan,” Garamendi said during the press conference.
Representative Garamendi represents California’s Third Congressional District, which includes Sacramento, Yolo and Yuba Counties amongst others. He has a longstanding history of working toward student loan reform. He has experience with California’s higher education system as a former UC Regent, former CSU Trustee and graduate of UC Berkeley.
According to a statement from Representative Garamendi’s office, “while lieutenant governor, serving as a University of California Regent and California State University Trustee, Garamendi voted against every undergraduate tuition increase. Since entering Congress, he has supported multiple bills to lower student loan interest rates, accelerate loan forgiveness for students pursuing in demand public service careers and increase access and funding levels for Pell Grants and Stafford and Perkins loans.”
Members of the UC Davis community spoke in support of the legislation at the press conference. Jacqui Barkoski, external chair of the Graduate Student Association, noted that student debt can delay graduation, cause personal stress for students and act as a barrier for students considering graduate school.
“It has become very clear that graduate student debt has become an issue affecting graduate students at this campus and across the nation,” Barkoski said.
Representative Garamendi expects to receive support on the bill after its formal introduction, and he already has 23 co-sponsors in the House. However, he also said that a broader effort will be needed for it to pass.
“If this is going to happen, we need those 40 million Americans who hold those loans to say, enough already,” Garamendi said at the conference. “Let us refinance our loans. Let us have an interest rate similar to what the federal government is able to borrow. Let us participate in the economy.”
Written By: CAROLINE STAUDENRAUS – firstname.lastname@example.org