In introducing the legislation last week, Sen. Elizabeth Warren, D-Mass., said it had twin goals of driving down the $1.2 trillion in student loan debt, and shrinking the profits the federal government pulls in from the interest payments on those loans.
"College affordability is about economics and about our values," Warren said. "We want to offer the same opportunity for those who got an education, but right now the law works for billionaires."
She was joined by Sens. Tammy Baldwin of Wisconsin, Chuck Schumer of New York, Al Franken of Minnesota, Richard Blumenthal of Connecticut and Jack Reed of Rhode Island, five of the bill's 27 co-sponsors.
"We need to let students refinance their loans like others do with their homes," Franken said. Added Reed: "We need to give people a fair shot at a better life, a better America."
If passed, the measure would allow borrowers holding current loan debt to refinance their interest rates down to the same rate available to new borrowers -- 3.68 percent, a figure passed by Congress last year -- the same way a home or car loan can be refinanced if interest rates drop.
"We have a crisis in student loan debt today," Warren said. "And the consequences of this student loan debt impact households throughout the country."
A study released Wednesday by the Pew Research Center supports her assertion.
The study found that Americans under 40 who graduated without student loan debt have a net worth nearly seven times of those who do hold debt. It also found that people with student loan debt are more likely to have other debts as well.
Richard Fry, who authored the analysis on the Pew survey, said the correlation could be because holding student loan debt means it's harder for young people to gain financial traction.