Sen. Sheldon Whitehouse (D-RI) recently introduced legislation that would allow borrowers to refinance federal student loans at zero percent interest.
The Zero-Percent Student Loan Refinancing Act aids in expediting efforts to pay down the principal on the loans while also easing the burdens carried by those with student debt.
“Big student loan interest payments can create a treadmill of debt that many Americans can’t escape,” Whitehouse said. “Those interest payments often stand between borrowers and the financial freedom to focus on the future, whether it’s buying a home, saving for retirement, or investing in their children. This bill will help people pay off their loans more quickly and get on with their lives.”
Per the legislation, all eligible federal FFEL, Direct, Perkins, and Public Health Service Act student loan borrowers could refinance the loans through Dec. 31, 2024.
Whitehouse cited a 2021 joint report by the National Consumer Law Center and the Center for Responsible Lending determining that 63 percent of student loan borrowers submitting payments during the CARES Act payment pause owe more now than they originally borrowed.
The Federal Reserve Bank of St. Louis maintains student loan borrowers owed a combined $1.75 trillion to the federal government and private lenders as of April 2022.