Congresswoman Shelley Moore speaking at the 2013 Conservative Political Action Conference in Maryland.
Senators Shelley Moore Capito and Gary Peters reintroduced the Federal Adjustment in Reporting (FAIR) Student Credit Act, bipartisan legislation that aims to assist private student loan borrowers who default on their loans, according to a press release from Gary Peters.
Unlike federal loans, which can be rehabilitated one at a time to repair a borrower’s credit, there are currently no options available for private student loan borrowers in default. FAIR, which was previously introduced in 2015, would allow a borrower who has steadily completed a series of on-time payments to remove a student loan default mark from his or her credit report.
With around $8 billion in total private student loans in the United States, lawmakers want to find a way to help these borrowers get on track with their debt and also wipe it off of their credit reports so they can achieve other personal and financial goals in the future.
While private student debtors have fewer options in default, federal student loan borrowers are still having difficulty paying back their debt. The U.S. Department of Education reported that close to 600,000 federal student loan borrowers defaulted for the first time in 2016, amounting to an 11.3 percent default rate.
Assisting student borrowers makes sense, not just to help them but also the economy and its taxpayers as a whole. In addition to the efforts of Senators Capito and Peters, other politicians have stepped up to the plate in the past to take a swing at the fastball that is higher education debt.
At the beginning of last year, Senator Blumenthal (D-CT) introduced legislation that would have implemented federal student loan refinancing according to The Student Loan Report, but the effort did not succeed.
In a similar move during 2015, Senator Brown (D-OH) introduced legislation that would have accomplished the same thing as Blumenthal's initiative, but the bill did not gain traction in Congress.
Image Copyright © Gage Skidmore