June 11, 2014

Cloture vote fails on student loan refi bill

June 12, 2014 – A motion for cloture on S. 2432, a student loan refinancing bill introduced by Sen. Elizabeth Warren, D-Mass., failed in the Senate Tuesday with a final vote of 56-38.

Warren's legislation would allow current holders of private student loan debt to refinance through a government program at the lower interest rate available to students taking out new loans under last year's Bipartisan Student Loan Certainty Act.

NAFCU is monitoring next developments on this bill and others affecting student loan debt. With efforts to address various student lending issues ramping up, NAFCU continues to oppose any attempts to allow student loans to be discharged through the bankruptcy process.

On Tuesday, Sen. Robert Menendez, D-N.J., introduced the "Christopher Bryski Student Loan Protection Act" aimed at ensuring co-signors aren't saddled with surprise loan defaults if the primary borrower dies. CFPB recently put out a report warning about surprise defaults due to the death or bankruptcy of a co-signer.

Cosponsored by Sens. Cory Booker, D-N.J., and Sherrod Brown, D-Ohio, Menendez's bill is named for a college student who died from a severe traumatic brain injury. "Middle class families like Christopher's should not have to endure the devastating loss of a child only to learn they must also face the financial hardship of a huge student loan debt," Menendez said.

In related news, President Barack Obama announced Monday that his administration would expand a federal program that aims to reduce payments for federal student-loan borrowers – opening the program to 5 million more federal student loan borrowers.