While President Barack Obama moves to reduce the federal student loan debt burden for up to 5 million Americans, a Minnesota state senator is pointing to other steps this year by the Legislature to make college more affordable.
Specifically, the Legislature directed the state Office of Higher Education to come up with its own plan for refinancing student loans. By 2015, the goal is to give students carrying loan debt with interest rates up to 12 percent the chance to get that as low as 3 percent.
That tracks with Obama's executive order, issued Monday, that will cap federal student loan payments at 10 percent of the borrower's monthly income. It's estimated up to a half-million Minnesotans could be helped.
State Sen. Terri Bonoff, DFL-Minnetonka, called Obama's move "one way to help." But she said the Minnesota refinancing plan, along with several other legislative initiatives this year, would also bring relief to people with heavy college debt burdens.
Minnesota has the nation's fourth-highest level of average student debt, with an average debt load in 2010 at $29,800. Democrats in Washington and nationwide have recently stressed their efforts at reducing college costs, as this year's election heats up.
Bonoff, who chairs the Senate's Higher Education and Workforce Development Committee, also noted a pilot project approved by lawmakers this year that will seek companies with specific workforce needs that will help fund the education of specific students aiming for careers in those fields. Another bill lawmakers passed this year compels the Minnesota State Colleges and Universities system to be more flexible with its credit transfer policy so that fewer students who shift among institutions will be forced to pay for redundant courses.