Virginia Democrats Seek to Help Ease Student Loan Debt
Democrat lawmakers are introducing bills aimed at lowering interest rates, and having Virginia play a role in issuing new loans to help reduce the burden of student loans.
RICHMOND, Va. (WVIR) - Virginia Democrats are rolling out a plan to tackle the heavy burden of student loan debt.
Lawmakers are introducing bills aimed at lowering interest rates, and having the commonwealth play a role in issuing new loans.
Democrats argue Virginia's economy is being held back because graduates are unable to invest much in the economy. Legislators believe they are delaying buying homes, as well as starting their own families or business because of their debt.
"We cannot move forward with a new Virginia economy when our next generation of leaders come out of school crippled with debt," said 95th District Delegate Marcia Price (D).
The Virginia House Democratic Caucus would like to resurrect the Virginia Education Loan Authority, which would allow students to refinance their loans in a way similar to a home mortgage.
"What we'd like to propose is a very robust, new Virginia student loan authority that has the power to make new loans for incoming students, as well as refinancing the loans of folks who've been out of school for a while," 53rd District Delegate Marcus Simon (D) said.
Democrats estimate Virginians collectively owe more than $30 billion in student loan debt.
Del. Simon says the commonwealth could look to states like Rhode Island, Connecticut and North Dakota for reform. "We're not the first ones to think of this, and we're not the first ones to try it," the delegate said.
The plan would take some money in the state budget to get the new infrastructure off the ground, but Simon then expects a loan authority to show a return on investment for the state.
"It's a good business for the commonwealth to be in for a variety of reasons, not just because it generates money but because it really helps out Virginia students and Virginia professionals who've been through school and need some relief so that they can really fully participate in the economy," Simon said.
Although Del. Simon says he doesn't think these proposals would be expensive, he admits there is a hurdle given the state is currently facing a budget shortfall. He doesn't have an estimate for how much the loan authority would cost initially, but says they're doing everything to reduce the price tag.
The 2017 General Assembly session opens on Wednesday, January 11.