Refinancing Isn't The Solution To Student Loan Woes

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Media Outlet: Forbes

 Kim Dancy was mentioned in Forbes about her recent report, In the Interest of Few: The Regressive Benefits of Federal Student Loan Refinancing. 

If Bill Gates distributed his $89 billion fortune equally among the world’s 7.5 billion people, everyone would receive only $12. The whole exercise would be largely pointless. The same principle applies to proposals to allow student borrowers to refinance their loans at current interest rates, according to a recent New America report by Kim Dancy and Alexander Holt.
Dancy and Holt analyze a proposal by Senator Elizabeth Warren (D-MA) to allow people with federal or private student loan debt to refinance those loans at current interest rates, which are presently near historic lows. Refinancing essentially means using a new loan to immediately repay an old one. The borrower then pays only the new loan, which may have better terms than the old: in this case, a lower interest rate.

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Kim Dancy is a senior policy analyst with the Education Policy program at New America. She works with the higher education team, where she conducts original research and data analysis on higher education issues, including federal funding for education programs.