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A group of 24 Senate Democrats, led by Sen. Elizabeth Warren (D-Mass.), introduced legislation Tuesday that would allow borrowers with outstanding student loans to refinance at the lower interest rates offered to new borrowers.

The Bank on Students Emergency Loan Refinancing Act calls for undergraduate student loan borrowers to be able to refinance at the current 3.86% interest rate, though that rate will mostly likely increase in July. The act would not only help federal loan borrowers but also consumers with private student loans, given their loans are in good standing. Refinancing would also give private student loan borrowers the protections and benefits that come with federal loans.

Refinancing is a common action for borrowers — the U.S. is emerging from a huge mortgage refinancing boom after interest rates dropped to historic lows in the past few years — but there’s no refinancing option for federal student loan borrowers. Private loan borrowers have some access to refinancing but often trade some consumer protections for the lower interest rates.

Outstanding student loans account for $1.2 trillion of consumer debt in the U.S., second only to outstanding mortgage debt. Economists and politicians have pointed to growing student loan debt as a serious drag on economic development. Lower interest rates would allow consumers to save money, which they would potentially spend, fueling economic growth. Many of the co-sponsoring senators made this point in a news release about the proposed legislation.

Student loans have a huge impact on borrowers’ credit, too. Most people have multiple loans, so missing one month of student loan payments could result in several delinquencies on your credit report. Roughly one in seven federal student loan borrowers defaults within three years of entering repayment, and that default rate has been on the rise. Education is often crucial to financial success, but trashing your credit because of student loans will make life pretty difficult, because your credit standing affects how much you pay for necessities such as a car.

Because credit is so intertwined in our society, it’s helpful to know where you stand. You can use free tools like those offered by Credit.com to check your credit scores for free and make a plan to improve them.

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