Among its provisions, the bill would order the Department of the Treasury to eliminate inefficiencies in the private student loan market and accommodate reasonable refinancing opportunities for private student loan borrowers. It would also increase oversight over the private student loan refinancing market.

According to Brown, D-Ohio, outstanding student loan debt reached more than $1 trillion last year and 81 percent of the undergraduates with high student debt had private loans. Brown argues that such loan debt slows down the economy by preventing people from buying homes, slowing their small business startups and diverting retirement savings.

Private loans typically have higher interest rates – as much as 18 percent – and are often more difficult to refinance, he said. But many students are forced to use them because federal loan limits – up to $31,000 over the course of a student’s education – don’t meet the need. The average cost of tuition, fees and room and board was $14,133 per year in 2007-2008 for a public, four-year college. The cost averaged $24,000 per year at private institutions for tuitions and fees alone.