U.S. Sen. Chris Murphy mentioned his own lingering college debt Thursday in support of legislation Senate Democrats hope to pass in June, which would allow former college students to refinance their own loans.
“Young families all across this state are feeling the squeeze of paying back prior indebtedness and saving for their children’s education. I’m no different,” he said. “While my wife and I don’t complain about the amount of money we make, we’re still paying back our student loans as well as saving for our kids’ college.”
It doesn’t seem like a stretch for the first-term Democrat who is often ranked as among the “poorest” of the 100 senators and whose finances were discussed during the 2012 campaign when a brush with foreclosure in 2007 became widely publicized.
But the statement caught the attention of the National Journal this month, when the Washington D.C.-based magazine questioned why Murphy does not pay off the lingering debt when he has recently reported having saved more than $100,000 in a joint bank account with his wife.
Senators must report their assets and liabilities within bracketed ranges in financial disclosure reports. On May 15, Murphy reported a joint savings account containing between $100,001 and $250,000. Meanwhile, the senator and his wife both have outstanding student loans ranging between $15,001 and $50,000.
Asked Thursday why he hadn’t used savings to pay off the loans, Murphy said his family is not unusual in that they struggle to balance their savings with the money they owe.
“Many of us have both assets and liabilities and I wish I had all of the money necessary to pay back the various loans my family has taken out to pay for college and to buy and own a house but that’s not the case. So every family manages the money that they have in the bank and the savings they need to take care of their family versus paying back their loans,” he said.
According to his disclosure report, Murphy’s family has created two savings accounts for his kids as well as retirement plans for his wife. They’re also paying a mortgage of $250,001 to $500,000. Both the senator and his wife are paying more than 5 percent interest rates on their student loans.
Murphy and U.S. Sen. Richard Blumenthal held the Thursday press conference to shore up support for legislation which would allow people paying high interest rates on existing student loans to refinance their debt at current student loan rates which were lowered by legislation passed last year.
“Right now if you’re taking out new student loans you can get new student loans at about 3.5 percent. But if you have existing student loans you are largely stuck paying 5, 6, 7, 8, 9, or 10 percent,” Murphy said.
Blumenthal said the bill will come up for a floor vote in the Senate sometime in mid-June. But it’s expected to see opposition from Republicans in both chambers because it relies on the elimination of tax breaks for some upper income households in order to fill the revenue hole that would be created by lower-than-expected returns.
Both senators called the proposal a good alternative to the current situation, in which the federal government is actually making a profit off the high interest rates of some former college students.
Blumenthal said the government is making about $66 billion a year from student loans. He called the number “abhorrent.”
“The federal government is making $66 billion a year off the backs of students. It should be investing in students not using them as a source of profit or revenue,” Blumenthal said.
Murphy agreed, saying the government should do no better than “break even” on the deal.
“We think that that’s just a matter of fairness. In order to allow for thousands of middle class families to pay back their loans at a more reasonable rate, we should ask the wealthiest amongst us to pay their fair share in taxes,” Murphy said. “That is a way of explaining why this is not going to be an easy lift in the House of Representatives or our Republican colleagues in the Senate.”