More people have it than credit card debt.
Approximately 40 million Americans are paying student loans, according to U.S. Senator Richard Durbin, (D) Illinois, who was in the Quad Cities on Friday, May 9th, 2014.
During his visit, he spoke at Augustana College in Rock Island about a new piece of legislation that would help students dealing with education debt. The Bank on Students Emergency Refinancing Act includes three bills. The biggest allows students with higher interest rates to refinance to a lower rate.
"For some students and their families, this is the only way to escape what is an impossible burden when it comes to student loans and student debt," he told an audience of students and school leaders.
"We want to make sure that students from lower-income, middle-income, and working families have a fair shot at a higher education that they can afford," Sen. Durbin continued. "We want the college experience to be an enrichment for their lives and not shackle them to a debt that is going to drag them down for decades to come."
The other bill would create a "Student Loan Borrower Bill of Rights." Sen. Durbin says it would require colleges and universities to give students all the information they need to make an informed decision about their loans.
"A student should know the difference in the interest rate between a government loan and a private loan," he says. "The student should know the chances for consolidating loans later in life to bring them down to lower interest rates. The student should know if there's any forgiveness, because under some government loans there's forgiveness if you go into certain professions."
The final bill would make certain colleges and universities responsible if they are "sinking their students too far into debt," according to Sen. Durbin.
The legislation would help students like Cameron Onumah, who is graduating from Augustana College in two weeks.
"I had to take out a private loan this August so I could afford to continue my Augustana education and come November, it'll cost more for me to pay my student loans than it will for me to pay rent," he explained. "I'm willing to pay for my Augustana education, but I want it to be fair. I want a fair shot in this world. I want to be able to live comfortably. I want to be able to enjoy my youth. I want to be able to save to buy a home."
"I want that American dream."
The legislation would also help alum like Joshua Schipp, who says he graduated in 2010 with $80,000 in student loans.
"I've already chipped away $30,000 since graduating, but $10,000 of that alone was just in interest payments," he said. "It seems like I'll never be able to catch up.
"I should be spending my money more wisely by putting it towards a down payment on a home, saving for my retirement, planning for a family, or making larger purchases in my community. For me, this legislation would allow me to save nearly $15,000 over a lifetime of my repayment."
Schipp's interest rates are as high as 9.25%. If the bill passes, they would drop to 3.86%.
Augustana President Steven Bahls was also at today's press conference. He says loans are important, but they need to be more affordable.
"[If it weren't] for federal loans and the Pell Grant Program, 80% of students here today would not be here," President Bahls said. "For us to be accessible and provide you with the highest quality outcomes, we need to do it in a a way that you can afford affordable loans."
The cost of the legislation is controversial, though. Sen. Durbin says they want to use the "Warren Buffet Rule" to pay for it. The "rule" requires anyone who makes more than $1 million a year to pay a 30% income tax rate. Sen. Durbin says he expects Republicans to fight that idea, since it includes some to pay more in taxes.