Washington, DC (CBS) - Massachusetts Sen. Elizabeth Warren introduced a bill Tuesday that for the first time would let Americans refinance student loans at lower interest rates.
U.S. debt on student loans has become an albatross for millions.
Student loans have become an economic albatross that has many Americans begging for relief.
In California, Rosemary Anderson's student loans have landed her deep in financial trouble.
"I don't even think I could've gone to a loan shark and had something like that happen," she said.
Anderson, a 57-year-old divorced mother of two, went back to school in her 30s for her bachelor's and master's degrees. Illness and financial troubles, she says, forced her to miss payments.
The $65,000 she originally borrowed has ballooned, inflated by 8 percent interest rates that she's not allowed to refinance.
"So this represents the total amount of my federal student loans I have: $123,317.35," she said.
"These are federal government loans. These are not loans I have through Wells Fargo or Bank of America. This was federal aid that was affording me to be able to get my education that are now punishing me for getting that education," Anderson said.
In the past 10 years, student debt has tripled in the United States, from $364 billion to more than $1.2 trillion. That's more than Americans owe on credit cards or auto lines.
"It's just a problem that keeps getting bigger and bigger and bigger," said Warren.
The Massachusetts Democrat introduced the legislation to allow refinancing.
"With interest rates low, homeowners have been refinancing their mortgages. But the federal government does not let people who holding student loans refinance down to the lower interest rates available. This bill would say yes, they can refinance," Warren said.
"Student loan debt is crushing people in this country," she said. "It's preventing the economy from moving forward."
"As more and more people fall into this kind of mire in student loan debt, they're putting less money into the economy. And that has a ripple effect and it's going to come around and someone's going to pay for that," Anderson said.
Thirty percent of federal student loans ore in default, forbearance or deferment. The average debt for college seniors is now $29,000.
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