Phil Bredesen met in Knoxville on Tuesday afternoon to discuss his plan to help current and future college students as well as graduates manage student loan debt.
Bredesen, a former Tennessee Governor and 2018 Tennessee Democratic U.S. Senate candidate, visited following the announcement he made on Monday night at the Rotary Club of Nashville to reform the current student loan system.
Bredesen’s proposal rejected the traditional model of student loan repayment, and suggested consolidating student loans into one repayment program overseen by the federal government and educational institutions.
Bredesen explained his vision for a new student loan program is designed to streamline the repayment process of student loans.
“I think the loan program we have today has a lot of failures,” Bredesen said. When gathering funding for college Bredesen said, “student loans are the biggest purchases new students will make. Therefore, I think that making the loan system as clear as possible is, in fact, a responsibility.”
Bredesen presented his idea for a loan program that combines loan debts up to a third of the cost of a student’s institution into one payment plan with obligatory payments for the next 30 years. Bredesen also recommended that the program not be means tested, allowing every student to take advantage of the opportunity.
“I just want to simplify the process… that makes the application very simple,” Bredesen said.
Bredesen described the benefits that a government-controlled student loan program could have.
“Today people typically end up with a multitude of loans, but it is technically possible to combine those, Bredesen said. “There is a huge industry out there making money off students. If we had a unitary consolidation of loans with a low interest rate and stretched out to as long as 30 years to repay the debt, nobody is going to beat that. That’s going to be the best deal you’re going to get.”
Bredesen expressed hopes of a more flexible, long-lasting student loan program that would parallel students’ benefit from education.
“Letting students stretch out their loan payments a bit so that it corresponds more fully to the amount of time that students are going to benefit from the education makes a lot of sense,” Bredesen said.
The timing of Bredesen’s plan to reform the student loan program is a direct response to Congress’s failure to reauthorize the Higher Education Act of 1965. Though the act was scheduled to be reauthorized in 2014, it has still not been reauthorized since 2008.
“I think that the whole student loan program is likely to come up again because it is now four years overdue. I believe the time is right to introduce these changes,” said Bredesen.
When asked if he would consider his plans to be retroactive in order to assist current college students and graduates, Bredesen replied, “I would love to see my plan in action. I want to give every student the option to roll their debt into this plan.”
