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Gillibrand pushes for bill to cut student loan rates

Ryan Delaney
Sen. Kirsten Gilibrand, D-N.Y. (file photo)

As the debt load of recent college graduates continues to rise, New York's junior senator is stumping for a new bill that will cut the interest rate on federal student loans by nearly half.

Sen. Kirsten Gillibrand (D-N.Y.) is one of about two dozen Democrats backing a bill that will reduce the loan rate on undergraduate loans to about 3.8 percent, from the nearly seven percent they sit at now. The bill would also bring down the interest rates for graduate school loans.

Gillibrand has written a similar bill that would reduce interest rates to 4 percent, but she says this one, written by Sen. Elizabeth Warren (D-Mass.), is broader.

It would save the average college graduate $10,000 in interest paid on their loans, she noted in a conference call with reporters, citing numbers from the Center for American Progress.

The average debt load of $27,000 for college graduates in New York is upsetting to them, she said.

"They just feel such a heavy burden. And at the time that they’re supposed to be starting their lives and graduating from college or graduate school, they feel very much like they’re already under water," she said.

On average across the state, one-in-ten recent graduates are behind on their loan payments, according to the CAP numbers.

Gillibrand says graduates need the money to start their lives.

"Without that investment, you’re not going to see a growing middle class, because all those jobs that are related to the economy in terms of housing, or apartments, or TVs or cars, that’s not growing. So you’re not growing the middle class overall. It’s a huge drag on the economy," she said.

Gillibrand told reporters the bill will likely come up on the Senate floor next month, but it currently lacks any Republican backers, so coming up for a vote seems unlikely.

"We'll see," Gillibrand said.