March 12, 2015

Kaine Focuses On Student Loan Debt At Aging Committee Hearing, Introduces Bill To Help Struggling Students

WASHINGTON, D.C.  – Today, U.S. Senator Tim Kaine, a member of the Senate Aging Committee, highlighted how burdensome student loan debt can hinder young people’s savings and retirement plans.

“I have three kids—25, 22 and 19—so I’m interested in this age group and savings,” said Kaine at an Aging Committee Hearing before asking witnesses how student loan debt is impacting young people’s saving habits.

“I think student loan debt is a very big problem for young adults,” said Alicia Munnell, Director of Center for Retirement Research at Boston College. “There are a lot of hurdles that you need to cross before you get to retirement savings as your primary concern. One is getting a job that gets up to a certain median…The other is dealing with this enormous student debt that you have to.”

“In our survey that we did with 20,000 low-income households—a lot of them students because we did it during the tax time—we found student debt to be a major barrier to savings,” said Michal Grinstein-Weiss, Associate Director at the Center for Social Development at Washington University in St. Louis. “People with higher student debt were less likely to save part of their refund.”

Following the hearing, Kaine joined U.S. Senator Dick Durbin and 11 of their Senate colleagues to introduce the Fairness for Struggling Students Act of 2015. This bill will allow students who borrow money from private lenders for their education to discharge their debt during bankruptcy proceedings. Currently, students who file for bankruptcy can discharge other types of private debt, but not student loans. By treating private student loans like any other form of private debt in bankruptcy court, this legislation will provide relief for students who are unable to make repayments, as well as discourage lenders from offering risky loan packages.

“College affordability is an issue that students, graduates and families are dealing with throughout the Commonwealth and across the country,” said Kaine. “By encouraging lenders to provide safer loans and providing relief to people struggling to repay their debt, this legislation both prevents and alleviates the financial hardships students encounter when trying to pay for school.”

Kaine introduced similar legislation in the 113th Congress.