In an interview Tuesday, Turner, a Dayton Republican, said current arrangements penalize borrowers who went to school during eras of higher interest rates — like now.
“Forgiving (debt) principal is the Biden administration’s goal, but the killer in students loans is the accrual of interest that happens in the future. Many times the interest can be crippling over the life of the loans,” Turner said.
The act of refinancing in the private market loses the benefits of the federal program, he said.
Nearly 43 million people — about one in every six adult Americans — hold federal student loan debt, Turner’s office said.
Turner reintroduced the Student Loan Refinancing Act with fellow members of Congress from New Jersey, Pennsylvania and Texas. The legislation would amend the Higher Education Act of 1965 by creating a pathway for federal student loan holders to refinance loans while still remaining public borrowers.
“The student debt crisis in this country continues to worsen, and it is time for Congress to provide common-sense, reliable solutions to this problem,” Turner said in a release. “Individuals should be able to keep their loans within the federal system while also taking advantage of lowered federal interest rates. This bipartisan legislation provides flexibility for borrowers by creating a mechanism to refinance their public student loans to a given year’s interest rates, thus easing the burden of student loans on federal borrowers.”
According to the White House in February, 1,079,000 Ohio residents applied or were deemed automatically eligible for student loan relief. The White House also said 702,000 fully-approved applications for relief from Ohio residents were sent to loan servicers for discharge, the White House said.
But the Biden administration’s debt forgiveness program has been on hold, even for those approved, while the Supreme Court considers a legal challenge. The court is expected to rule on that program before the end of the month — less than two weeks away.
If the justices approve the program, borrowers could see up to $20,000 of their student debt cancelled.
In all, some 14 million people might be affected, reports have said.
Paul Pomeroy, a computer consultant who lives near Springboro, thinks the debt forgiveness idea is a bad one.
“I disagree that this is a good idea,” he said Tuesday. “I think people should be aware of the loans that they commit to, and they should pay those loans.”
Pomeroy said he worked through college, and he and his wife paid off his wife’s college debt.
The Student Loan Refinancing Act introduced by Turner and his colleagues ensures that refinancing loans does not reset a borrower’s monthly payment count and is only available to federal student loan holders. The legislation also caps the number of times a borrower can refinance in a given time period.
Turner acknowledged there are a number of legislative proposals for student loan borrowers at the moment. “Everyone agrees that student loan debt is a problem,” he told this news outlet. “It needs to be reformed.”
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