WASHINGTON, D.C. – On Wednesday, Congressman John Garamendi (D-Fairfield, CA) announced that he is co-sponsoring the Bank on Students Emergency Loan Refinancing Act of 2015.

The bill was introduced Wednesday by Congressman Joe Courtney (D-CT) in the House of Representatives and by Sen. Elizabeth Warren (D-MA) in the Senate.

“If the Bank on Students Emergency Loan Refinancing Act became law, a typical borrower would save about $2,000 over the course of a student loan. An estimated 2.3 million Californians would see savings,” said Garamendi, a former University of California Regent and California State University Trustee. “It’s unfair that millions of hardworking borrowers are currently denied the ability to refinance their student loans at lower interest rates that are now available. At the same time, many big banks are borrowing at a 0.75 percent rate. This bill simply makes paying off student loans a little more affordable, and it deserves a fair hearing in Congress.”

The bill comes after the House Republican budget introduced this week freezes the maximum Pell Grant award at the current $5,775 for the next ten years. This comes only months after the UC Regents voted to raise tuition 27.6 percent over five years.

The Department of Education estimates that nationwide 25 million borrowers would benefit from the Bank on Students Emergency Loan Refinancing Act, including an estimated 2,328,000 borrowers in California. Under the bill, a typical participating borrower would save $2,000 over the life of his or her loan.

The Bank on Students Emergency Loan Refinancing Act would allow borrowers with high interest rates on their existing student loans (public and private) to refinance these existing loans to lower interest rates, similar to those available to new student loan borrowers.

Currently, some student loan borrowers are stuck with interest rates as high as 8 percent on their existing loans.

The bill would allow borrowers with existing undergraduate student loans issued prior to July 1st, 2015 to refinance those loans to a 3.86 percent annual interest rate. Graduate school loans could be refinanced to 5.41 percent, and parent loans for a child’s education to 6.41 percent.

According to estimates from the nonpartisan Congressional Budget Office, half of the outstanding loan volume for federal student loans – about $460 billion – would be refinanced under this bill.

Unfortunately, in the last Congress, the Republican Caucus voted to block bringing up this critically important student loan refinancing bill in the House and filibustered the bill in the Senate.

Student loan debt is greater than $1 trillion. Student loans are America’s second largest source of household consumer debt, behind only mortgage debt.