Americans owe more than $1.3 trillion in student debt, according to the Federal Reserve.
While much of this debt is owed to the federal government or private companies, State Representative Kip Kendrick (Columbia-D) said he has spent the last six months trying to figure out what can be done on the state level to provide Missouri borrowers with relief.
The result is his Student Debt Relief Act, which he discussed at a news conference at the University of Missouri Student Center on Monday morning. Kendrick said the bill would allow borrowers to refinance their existing loans, consolidate debt, lower their monthly payments and extend repayment.
“The trend of cost shifts from states to students has to end,” Kendrick said, referencing repeated cuts to higher education funding from the state over the past 15 years. “Until that time, the very least we can do is offer students relief paying back their student loans.”
Kendrick’s bill would empower the Missouri Department of Higher Education to issue loans to eligible students to refinance their public or private loans. To be eligible for state refinancing, borrowers would need to have completed at least an associate’s degree and made their first payment on their loans. Kendrick said that offering refinancing to borrowers most likely to repay will help push down interest rates in the future.
Kendrick’s speech was co-sponsored by four MU student organizations: Associated Students of the University of Missouri (ASUM, Graduate Professional Council (GPC), Tigers Against Partisan Politics (TAPP) and the Missouri Students Association (MSA).
ASUM Legislative Director Steven Chaffin and GPC Communications Director Matt McCune shared their own experiences with student debt before Kendrick took the stage. McCune said he and his wife worked full time as undergraduates to avoid accruing large amounts of student debt but will still likely have more than $50,000 in combined debt when they complete their PhDs. He said graduate students in particular were frustrated with the high interest rates on federal student loans.
“That’s why we’ve gone to the state legislature and said, ‘Please, can you give us some refinancing at much lower rates?’” McCune said. “You can still profit off of us, but it would keep Missourians’ money in state.”
Polly Haun, a junior at MU, doesn’t have any student debt, but she expects to have to take out loans if she pursues a master’s degree in the future. Haun was impressed with Kendrick’s bill and hopes that she will be able to benefit from it in the future.
“I want to know that I will be able to repay my loans in the future,” Haun said.
Kendrick also announced a companion bill he plans to file that would create “loan navigators” to help students understand if the state refinancing program is right for them.
“It’s not about how many loans are ultimately refinanced,” Kendrick said. “It’s about providing options and making sure the information is available to borrowers to move them forward.”
