Gillibrand’s bill would cap college loan interest rates
SCHENECTADY Antwuan Sims’ college education lasted only as long as his savings.
He got through his freshman year at the State University of New York at Buffalo without issue and was a quarter of the way through earning an undergraduate degree in business. But when he found that he could no longer afford college and left halfway through his sophomore year, his student loans came due.
That was in 2005. Sims owes more than $11,000 in student loans, which are now accruing 6.7 percent interest annually.
The debt all but ensures that Sims, now 28, will remain a worker at the Madison Theater in the foreseeable future. Any money he saves up for completing his degree simply goes toward paying off the interest of his student loans.
“I’ve got to save up to go back,” he said Tuesday. “To do that plus pay down the debt, I’m struggling.”
Sims’ modest debt is part of the estimated $1.2 trillion owed by students nationally. This level of debt has now surpassed money owed on auto loans and credit cards, according to U.S. Sen. Kirstin Gillibrand.
“More graduates and middle-class families are burdened by student loans than ever before and are struggling to repay a higher debt than ever before,” she said in a new release Tuesday.
Gillibrand is now pushing federal legislation that would help students cap the interest rates of their student loans at 4 percent. The so-called Federal Student Loan Refinancing Act would enable individuals with an interest rate over 4 percent to refinance their federal loans at the lower fixed rate.
Gillibrand said her legislation would affect about 2.7 million borrowers in New York and 40 million people across the nation. She said her bill would lower interest rates for nearly nine in 10 federal student loans across the country.
“Our young people should be able to refinance in the same way that our businesses and homeowners do,” she said. “We must strengthen our middle-class families instead of forcing New Yorkers deeper into debt.”
Gillibrand was scheduled to appear with local politicians and dignitaries at the main branch of the Schenectady County Public Library downtown Tuesday afternoon. Snow and poor weather, however, prevented her flight from landing at the Albany International Airport .
Still, the legislation pitched by the state’s junior senator drew accolades from those gathered to welcome her at the library. Kevin Stump, the New York Public Interest Research Group’s higher education program coordinator, said the bill is the first part of solving the fiscal conundrum many college students and graduates are facing these days.
“It’s a refreshing idea,” he said. Stump said the ultimate goal is to prevent additional debt from accruing. But he said the already existing debt — the $1.2 trillion cited by Gillibrand — is also something that needs to be addressed. “The crisis continues to loom.” he said.