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The Maryland Public Interest Research Group supports HB1015, a bill that will allow for the study of a state body to refinance student loans. The bill is sponsored by Delegate Anne Kaiser.
The rising cost of college increasingly puts a higher education out of reach for many Marylanders, and the need to increase access to educational financing continues to be a salient issue in public policy. This bill will set up a state study of the viability of a state student loan refinancing body, which may have the potential to make college more affordable for Maryland students.
Between 1980-2014, the cost of college increased 260%, more than double the rate of inflation. Further, over the past few decades, the importance of attaining a higher education for economic and career success has risen significantly. These combined trends have resulted in 58% of 2014 graduates from a nonprofit, four-year institutions in Maryland owing an average of $27,457. The problem with such sizable debts is noted in how long it takes the average bachelor’s degree holder to pay of his or her loans: 21 years.
Around seventy-percent of students take out loans in order to afford their college tuition, making loan interest rates and the ability to refinance of extreme importance for thousands of students. It is a simple fact that higher interest rates vastly contribute to economic hardship for graduating students, especially in a time of economic insecurity. Maryland PIRG enthusiastically supports initiatives that will help keep interest rates low and keep repayment manageable for students.
Lastly, the the we are excited by the possibility of a public loan provider, given the predatory nature of private markets. Predatory practices by the private sector have been extensively documented, and regressively victimize the most vulnerable students. Further, loan financing through public outlets often include improved safety net repayment programs and lower interest rates.
For these reasons, we urge Members of the Maryland General Assembly to support a bill that would allow for further research and testing on the creation of a state body to refinance student loans.
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