State Senator Greg Clausen’s legislation to allow Minnesota students to refinance their college loans through the Office of Higher Education was included in the Higher Education Committee’s Supplemental Budget bill. The loans can be taken out for a four year degree, two year degree or certificate program.
Minnesota students have the third highest college debt in the nation and the fifth highest total number of students who leave college with student loan debt. According to Sen. Clausen, 18 states have started loan-refinance programs in an attempt to alleviate student debt. He argues it is time for Minnesota to do the same.
Sen. Clausen’s bill would guarantee lower interest rates for all Minnesota students graduating from a Minnesota school – either public or private. Under the Clausen proposal, students could refinance their high interest loans, that range as high as nine to 12 percent, down to three or four percent.
“This is a significant savings for students and one way we can help reduce student loan debt,” Sen. Clausen said. “In addition, reducing student debt will stimulate the economy by putting more money back into the hands of our college graduates so they can use the savings to purchase a car or their first home.”
Sen. Clausen’s Week in Review which includes a clip on the student loan refinancing proposal: