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 Democrats said their measure would let holders of both federal and
private undergraduate loans - some with rates of 9 percent or higher
- to refinance at 3.86 percent.
Drafted in coordination with the White House, the bill is part of
Senate Democrats' 2014 legislative agenda aimed at giving all
Americans "a fair shot" and rallying the party's liberal base in
advance of the November elections.
But like earlier rejected measures to raise the minimum wage and
renew expired long-term jobless benefits for millions of Americans,
it faces Republican opposition that could kill it.
"This bill would be hugely expensive," said Republican Senator Jeff
Flake of Arizona. "I don't think it will be seriously considered."
Democrats control the Senate, 55-45, but need 60 votes to clear
Republican procedural hurdles.
Democratic Senator Elizabeth Warren, a chief sponsor of the bill,
said she expected bipartisan support.
"Student loan debt is a real and growing crisis that is crushing
young people and dragging down our economy," Warren said.
"When interest rates are low, homeowners, businesses and even
municipalities refinance their debt. But right now the government
doesn't offer a refinancing option to students," she noted.
"Allowing students to refinance their loans would help give them a
fair shot at an affordable education."
Last year, Congress approved the Bipartisan Student Loan Certainty
Act of 2013, which set the undergraduate student loan interest rate
at 3.86 percent for the current school year.
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Democrats said the nonpartisan Congressional Budget Office will
determine the cost of their bill, which would permanently let
student-loan borrowers refinance at the going rate.
Democrats propose that the cost of their bill be offset by reducing
tax breaks for millionaires.
Democrats cited federal data showing that student-loan debt grew by
$31 billion from January to March, to total $1.1 trillion, making it
the fastest-growing household debt category.
Overall, about 40 million Americans have student loan debt,
Democrats said.
(Reporting by Thomas Ferraro; Editing by Dan Grebler and Eric Walsh)
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