Senator Warner Discussses Debt
Senator Mark Warner (D-Va) discussed his new bipartisan efforts to address the rising problem of student loan debt at Old Dominion University on Sept. 2. He has worked closely with Senator Marco Rubio (R-Fl) and other senators to craft and introduce three bills that seek to help alleviate this burden.
“I hear more about student debt than any other issue,” Warner said. “It’s an issue whose time has come.”
The Dynamic Student Loan Repayment Act is an attempt to help students and graduates pay back their student loans without creating an undue financial burden.
It would set loan payment maximums at 10 percent of a graduate’s monthly income and accelerate the loan forgiveness process, wherein a graduate can have the rest of their student loan forgiven after making 25 years of payments.
“Current income-driven repayment plans are underutilized because the system is so complicated,” Senators Warner and Rubio said in a joint statement. “Our proposal… will streamline the current repayment options into a simpler, user-friendly repayment plan.”
The Employer Participation in Refinancing Act will allow employers to help pay down employees’ existing student loan debt with pre-tax dollars. Currently, employers may finance continued education for employees in this manner, but does not allow for relief on debts already incurred.
The Student Right to Know Before You Go Act seeks to increase transparency on the part of colleges and universities, updating requirements for reporting on retention, graduation rates, graduate earnings outcomes, and other relevant statistics so that students can make more informed choices.
The act would create a streamlined, easy-to-navigate website with all of this information available for every higher education institution in the country. The senator compared this hypothetical website to www.zillow.com, a real estate website that offers comprehensive information on home-buying and renting.
“On average, today’s graduates carry nearly $30,000 in student loan debt. But our current loan repayment system often turns what should be reasonable debts into crippling payments,” Warner and Rubio said.
Student loan debt in the U.S. has overtaken credit card debt as the average household’s largest financial obligation. Total numbers for the country are in excess of $1.2 trillion.
“This must be part of a broader conversation about how to make higher education more affordable,” said Warner and Rubio.
Warner spent 20 minutes outlining the five main points of his plan to ease student debt before opening up the floor to student questions and comments.
First, he emphasized the need for increased opportunities for high school students to earn college credit through dual enrollment courses. Better articulation with advanced placement credits and community colleges could also help reduce the total price of a college education by the cost of one semester.
Second, he referred to the Student Right to Know Before You Go Act, asserting that students with better information would make better choices about their education. With this information, students would be able to plan their college education to provide the highest financial return for their investment.
In response to a student comment, he also suggested the possibility that scholarships and financial aid information may be included on the website, as such information is currently fractured and difficult to reconcile.
“This shouldn’t be that hard,” Warner said. “Why can’t you just google ‘rational ways to pay for college?’”
Third, he advocated both state and federal governments working towards lowering interest rates and creating options for refinancing.
“If you can get a mortgage at 4.25 percent, why can’t you go to college at that rate?” Warner asked.
Fourth, he said that student loans should use income-based repayment options by default, which his Dynamic Student Loan Repayment Act would accomplish.
In addition to accelerated standard timelines for loan forgiveness mentioned in the act, he also suggested programs where community service and educational roles would earn accelerated loan forgiveness, similar to current programs for government service.
Finally, he discussed the potential for increased recruitment and retention of educated employees if employers were allowed to use pre-tax dollars to help pay off previously incurred student debt.
Students expressed their opinions and frustrations to the senator for the rest of the discussion. A show of hands indicated that of the nearly 100 individuals in the room, roughly 75 percent had incurred debt in the form of student loans.
According to a financial aid fact sheet distributed by representatives of the ODU Department of Public Relations, approximately 70 percent of all ODU undergraduates receive some type of financial aid.
Warner has worked across the aisle rather extensively in the past. Most notably, he co-sponsored bipartisan legislation on debt and deficit reduction as a member of the Senate’s “Gang of Six.”
However, the legislation was blocked by the leadership of both parties.
When asked what steps had been taken in order to ensure a different outcome for his current bipartisan legislation, Warner spoke on the need for growing bipartisan coalitions, and an end to bipartisan stigma on the parts of ideological purists in both parties.