Legislation to lower students' interest rate on college debt doesn't see light of day

Sen. Alexander dismisses Democrat's proposal as 'political stunt'

photo Students walk across campus Thursday at the University of Tennessee at Chattanooga.

Adara Joiner is one of the lucky ones.

The education major at the University of Tennessee at Chattanooga expects to graduate next year without student loan debt. And Joiner's glad she's avoided it through such cost-cutting measures as living at her parents' home during some of her undergraduate years.

"A lot of my friends that have graduated are starting to get smacked in the face by the amount of debt they've racked up," Joiner said.

Legislation that would have let students refinance their loans at a reduced interest rate didn't get the 60 votes it needed Tuesday to be heard in the U.S. Senate. Massachusetts Sen. Elizabeth Warren's Bank on Students Emergency Loan Refinancing Act would have allowed more than 25 million people to refinance their student loans to today's lower interest rates of less than 4 percent, according to The Hill, a Washington, D.C., newspaper.

Warren proposed funding the cost through the "Buffet Rule" -- a minimum 30 percent income tax payment from people who earn between $1 million and $2 million, The Hill said.

Chattanooga Mayor Andy Berke weighed in the day the Senate vote was scheduled. Berke, a Democrat, participated in a press call along with former U.S. Rep. Lincoln Davis, a Democrat from Tennessee's 4th District who was succeeded by Republican Scott DesJarlais.

"We know that if we want our young people to have true opportunity, they need to be free from the crushing student debt they often face," Berke said.

Nearly 793,000 Tennesseans have student loan debt, making the total student loan debt in the state more than $20 billion, said Generation Progress, Center for American Progress, the left-leaning public policy group that organized Tuesday's press call with Berke and Davis.

College students nationwide have racked up an estimated $1.2 trillion in debt.

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The average UTC student had $21,274 in debt at graduation in the 2013 academic year, said Dianne Cox, UTC's director of the Office of Financial Aid.

That's about how much debt UTC senior Trevor Jackson said he'll have when he's done earning a marketing and finance degree.

"It's kind of this thing in the background that nobody ever talks about," Jackson said of student debt. "I think I can have it paid off by the time I'm 30."

This isn't the first time that Warren, a possible presidential contender, has tried to get her student debt legislation heard. She failed to get the 60 votes she needed in June.

Sen. Bob Corker, R-Chattanooga, was one of three Republicans who voted then to debate Warren's plan.

"While I think the underlying policy is problematic and would not support passage of the current version of the bill, I think we should at least allow debate on ways to address the rising price of education and help students weigh the cost of undertaking debt with the value of the investment they are making in their future," Corker said then.

Tennessee's other U.S. senator, Lamar Alexander, last week dismissed the Democrats' student loan refinancing bill as a "political stunt" before the November elections.

"This is not a serious proposal. It's not going to help people," Alexander said. "College graduates don't need a $1-a-day subsidy to pay off their $27,000 loan, which is the average for a four-year degree. They need a job."

Alexander, a former U.S. secretary of education and former president of the University of Tennessee, as well as former governor of Tennessee, said he helped put together last year's bipartisan agreement to reduce interest rates on new student loans.

Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com or www.facebook.com/tim.omarzu or twitter.com/TimOmarzu or 423-757-6651.

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