Skip to main content

Are you a legal professional? Visit our professional site

Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

Two Proposed Student Loan Bills Could Help Law Grads, Won't Pass

By William Peacock, Esq. on May 09, 2013 1:26 PM

Much respect to Senator Elizabeth Warren, the first-term Congresswoman who beat incumbent Republican Scott Brown for one of Massachusetts’ seats in the Senate. According to the Los Angeles Times, a big reason for her victory was her embrace of the Occupy Wall Street movement and criticism of big banks.

And with her first bill, she may have just won a few more votes.

The Bank on Students Loan Fairness Act, which has a snowball’s chance in hell of passing, would set student loan interest rates (for one year only) at the same rate that banks get when they borrow money from the federal government: 0.75 percent. The interest rate on federal student loans is currently set to double to 6.8 percent this summer.

She isn't the only legislator helping the kids, however. Another similarly-titled bill, the Student Loan Fairness Act, introduced by Rep. Karen Bass, has other brilliant ideas for student loan reform, including:

  • A 10/10 Loan Repayment Formula (ten percent of adjusted gross income paid monthly, capped at 120 consecutive payments);
    • Forgiveness is capped at $45,520;
    • No tax penalty for loan forgiveness;

  • All new Federal Direct Loans capped at 3.4 percent interest;
  • Cutting public service loan forgiveness to five years (currently ten);
  • Refinancing private education loans for certain borrowers;
  • Anyone who makes less annually than their total private loan debt can have the feds "purchase" their private loan debt and roll it into a Federal Direct Consolidation Loan
  • Interest-free deferment of Unsubsidized Direct Loans during periods of unemployment;
  • Excluding other federal loan forgiveness programs (income-based, etc.) from taxable income.

A lot of these are intriguing for broke, unemployed and underemployed law grads. Rolling private loans into federal consolidation loans is brilliant -- especially since many banks have stopped offering private loan consolidation since the big bank bust of a few years back. Interest-free deferment during unemployment is also a pretty intriguing idea as well.

Though, according to, the latter bill also has a zero percent chance of passing and a one percent chance of getting past committee, we wouldn't rush to label the two bills empty gestures. They may not accomplish anything directly, but they serve two important purposes: reminding students that they do actually have at least one advocate in our representative system of government and they put pressure on other lawmakers to address the $1,000,000,000 problem.

Related Resources:

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

Or contact an attorney near you:
Copied to clipboard

Find a Lawyer

More Options