Media Center

Yesterday, Congressman David Scott (GA-13) joined 40 of his colleagues in introducing the Coronavirus Emergency Student Loan Refinancing Act—legislation that allows student loan borrowers to take advantage of record-low yields on 10-year Treasury notes and refinance their loans down to lower rates, lowering their monthly payments as a result. Student loan borrowers are currently unable to refinance their loans, which can carry interest rates as high as seven percent on legacy undergraduate loans. With more than 44 million Americans holding student loan debt, creating a program to refinance this debt down to lower interest rates will put money back into the pockets of millions of students that will last long after this ongoing national emergency declaration.

“Throughout my time in Congress, I have supported affordable higher education- including low interest student loans – to ensure that students have an affordable and accessible route to paying for advanced learning,” Scott said. “The Coronavirus Emergency Student Loan Refinancing Act will allow borrowers to take advantage of this critical time in the market, lower their monthly loan payments, and give them a little more security during this uncertain time.”

The Coronavirus Emergency Student Loan Refinancing Act would allow all student loan borrowers – both federal and private – to refinance their loans down to lower rates. For private student loan borrowers, the federal government would pay the balance of the loan through a federal student loan, with interest rates matching those for federal borrowers. A borrower who chooses to refinance will have their loan refinanced down to a rate equal to the lowest yield of the 10-year Treasury note in the preceding six months, plus a fixed percentage rate. Using the March 9 10-year Treasury note yield of 0.54% as an example (the lowest yield in the last six months), student loan interest rates would be calculated as follows:

• Undergraduate loans: 2.59% (compared to 4.53% for the 2019-2020 school year)
• Graduate loans: 4.14% (compared to 6.08% for the 2019-2020 school year)
• PLUS loans: 5.14% (compared to 7.08% for the 2019-2020 school year)

Student loan borrowers in their 30s – including many who are starting new families now – are carrying undergraduate loans with interest rates that are as high as seven percent. For those borrowers, a refinancing proposal like the Coronavirus Emergency Student Loan Refinancing Act would significantly reduce monthly payments. The Trump Administration recently granted temporary relief on federal loan interest rates, including for homes and small businesses. With this bill we will ensure that ALL borrowers will to be able to take permanent advantage of the lowered interest rates, especially our students.