Zeldin: New Legislation Aims to 'Replace Current Broken Student Loan System'

If it’s up to Congressman Lee Zeldin, students saddled with huge student loan repayments might soon see some relief.

Rep. Zeldin hosted a press conference today at Long Island University in Riverhead to outline his newly proposed legislation, the Earnings Contingent Education Loans, or ExCEL Act of 2015, which addresses what he deems a student loan crisis in the United States.

Zeldin urged Congress to act quickly to pass the legislation, which he said would help to address the current ”overwhelming and burdensome” student loan repayment model.

Instead, he said, the ExCEL Act would establish an affordable, income-based repayment program modeled to each person’s needs. Students would have loan repayments withheld from their paychecks; the program would allow them to repay their loans at a rate specific to individualized needs.

Monthly payments would increase only when when a borrowers salary increases, he said, something that would provide an incentive to pursue higher paying jobs without the fear of ”huge increases in student loan payments.”

According to Zeldin, a 2013 Consumer Financial Protection Bureau report stated that nearly one third of federal borrowers have either defaulted on student debt, or are in the deferment or forbearance process.

In addition, the Department of Education recently stated that nearly 12 percent of borrowers have defaulted on loan repayments from 2013 to 2015.

Currently, the United States government reports almost $800 billion in student loans outstanding on its balance sheet; and according to the nonpartisan Congressional Budget Office, due to the dangerously high rate of default, the government is expected to lose nearly $20 billion over the next 10 years, Zeldin said.

The ExCEL Act will lower the cost of student loans to the American taxpayer by dramatically decreasing default rates. The legislation contains specific prohibitions that guarantee each borrower meets his or her full financial obligation, and ensures the solvency of student loan assistance moving forward.

“I am proud to introduce the ExCEL Act in the House of Representatives to help address the student debt crisis faced by the American public, a serious and growing problem in the United States. . . Young college graduates are having difficulty securing structured loans that can help them afford to get their professional lives off the ground successfully. Under the current system, borrowers are limited to rigid mortgage-like repayment systems which offer little flexibility in terms of repayment.”

The new system would also provide additional protections for borrowers during periods of low income levels or even unemployment, he said. “We should do all that we can to help younger Americans achieve their full potential as future leaders of this great country. That goal can not materialize when new college graduates are saddled with excessive volumes of debt. The ExCEL Act must be signed into law as soon as possible so we can take the necessary steps to address this growing crisis.”

Suffolk County Legislator Al Krupski agreed. “Unmanageable student debt not only weighs down young people just starting out in life, but it is detrimental to local economies. In light of this issue, most students today have little choice but to consider the ramifications of taking on such long-term debt in their young lives. Congressman Zeldin’s bill is a positive step in addressing the student debt crisis and one which will make repayment of student loans more manageable for many individuals. I thank him for his leadership on this issue.”

Added Long Island University Dean Donna DiDonato: “All of us at LIU are here because we believe in the transformative power of higher education, and this commitment to our students includes making a college education accessible to students from all walks of life.”

New York State Senator Ken LaValle applauded Zeldin for focusing on the swelling student debt crisis. “I have worked very hard to enact measures ranging from loan forgiveness to increased tuition assistance, recognizing that student loan debt is one of the most serious financial issues facing our young people today,” he said.

A copy of the bill can be found here: https://www.congress.gov/114/bills/hr3695/BILLS-114hr3695ih.pdf.