As predicted earlier, Elizabeth Warren’s student loan bill failed to garner enough votes to pass. The 56-38 vote on the refinancing proposal was close but lacked the 60 votes needed to overcome a Republican filibuster.
The bill would have allowed borrowers with higher rates to refinance at the lower current rate of 3.84 percent available to current borrowers.
On Monday, June 9, 2014, President Obama announced his support for this bill. Although it did not pass, we’re left with Obama’s executive orders which also he announced on Monday. That means students will still receive new student loan benefits, including:
1. Expansion of the Pay-As-You-Earn (PAYE) repayment program. Caps payments at 10% of a borrower’s income and extends the repayment period to 20 years. 5 million borrowers expected to benefit.
2. Renegotiation of contracts with private loan servicers “to make it clear that these companies are in the business of helping students.”
3. Enhanced awareness campaigns so borrowers know about the federal student loan repayment options available.