At least two different studies of possible ways to reduce the student loan burden of Maryland residents will move forward after lawmakers gave the proposals final approval on Monday, the last day of this year’s General Assembly session.
One bill requires Maryland officials to explore whether any state agencies could use their bonding authority to refinance student loans or whether a new state body should be created for that purpose; another bill calls for Montgomery County to explore creating a local Student Loan Refinancing Authority for the same purpose.
Both bills originated in the House and were given final approval by the Senate Monday morning.
Connecticut, Rhode Island and Minnesota have been offering low-interest student loans for decades. Those states recently expanded those programs by adding refinancing options.
Rhode Island, for example, has been offering new student loans for more than three decades and its program has earned a triple-A bond rating from Fitch Ratings and Standard & Poor’s, according to the program’s 2015 annual report.
In the first 18 months since it began offering loan refinancing services, the Rhode Island authority helped 349 people refinance debt totaling $13.6 million. The authority was able to offer interest rates as low as 4.24 percent, according to the annual report.
Fifty-eight percent of the students who graduated from nonprofit, four-year institutions in Maryland in 2014 had student debt, with an average balance of $27,457, according to the nonprofit Institute for College Access & Success.
The level of debt among new Maryland graduates grew 118 percent from 2004 to 2014, according to the institute.
A third bill, calling for Harford County officials to also explore creating a local student loan refinancing authority, passed the House earlier in the legislative session but had not moved forward in the Senate by early Monday afternoon.