Whitmer proposes new program to help state residents refinance student loans
Michiganders with student loan debt could see relief under a program proposed under Governor Gretchen Whitmer’s new budget.
According to the US Department of Education just under one and a half million state residents owe a total of roughly $48 billion in student loan debt.
Budget director Chris Kolb said the Governor’s new budget would offer a new program to refinance some of that debt, allowing residents to pay lower interest rates.
“Qualified individuals must be residents of the state of Michigan, must have made on time payments for the last three years, and must have attended a public or private university or college.”
Residents could refinance and pay lower interest rates on up to $50-thousand of student loan debt so long as they attended an institution of higher education in Michigan.
Chris Kolb said the proposed budget would create a $10-million revolving fund for loan repayment.
“We are not the first state to do this, 15 other states have similar programs as well,” he said.
Marilyn Kosir is with the Minnesota Office of Higher Education, which has managed a similar student loan refinancing program since 2016. She said in some cases the state has helped refinance private loans with interest rates as high as 13%.
“Right now the range of our interest rates is 4.2% to 6.75% and again our interest rates are based on fixed and variable and the repayment term so we’re not pricing it based on your credit score.”
Minnesota’s program is more expansive than Whitmer’s proposal, allowing their residents to refinance loans of up to $70-thousand, including loans that were taken for out-of-state schools.
The Minnesota program is funded through the sale of state bonds.