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JEFFERSON CITY - Students could soon have another option for taking out loans for higher education.

Rep. Kip Kendrick, D-Columbia introduced HB 1273, which gives the Missouri Higher Education Loan Authority (MOHELA) the ability to issue loans to students to refinance their private or federal loans. 

Kendrick said the bill establishes a program that allows students to refinance at lower interest rates and spread out the life of the loans, to up to 25 years, rather than the current 10. He said the program intends to ensure graduates don't have to repay loans "when their earning potential is the least and their job security is fairly low" right out of school. 

"I don’t necessarily think were at a debt crisis level yet. However, I do think it's more of a repayment crisis we're currently seeing," Kendrick said.

As of now, there isn't a way to receive student loans from the state. MOHELA currently only services existing federal student loans and deals with repayment plans. The proposed program would be an option for MOHELA to adopt.

"MOHELA would be buying the loans from the federal government for particular individuals they're going to refinance. It would take students out of a federal loan and put them into a MOHELA loan that would refinance it at a lower rate," Kendrick said. 

While this program would shift students out of federal loans and into state loans, Kendrick said the bill contains protections against risky student borrowers. 

"I wanted to make sure that the state wasn't going to refinance individuals that were risky of default or delinquency. That doesn't necessarily do any good for us," Kendrick said. "There's no reason for us to shift a risky borrower from the federal government to the state government."

As part of the program, anyone looking to refinance their loans must have graduated from an accredited institution with an associate's degree or higher. 

Brandon Henderson is a student at the University of Missouri-Kansas City and spoke in support of the bill as a representative for the Associated Students of the University of Missouri. 

Henderson said the proposed bill acts as a "life preserver" for students to help ease the burden of student debt. 

"Many students my age, including myself, crave the same opportunities that many generations before us received. And I know sometimes hard work is not enough," Henderson said. "This bill is an investment in students and students are an investment in the state of Missouri."

Kendrick said this program his bill proposes is "not a fix-all" for student loan debt, but that it is a step in the right direction.

"It will help a significant amount of people. There's only a limited amount of things we can do. This is one of them," Kendrick said.