The U.S. government offers very low-interest — in some cases, near-zero interest rate — loans — that is, if you are a Big Bank on Wall Street. Sen. Elizabeth Warren (D-MA) doesn’t think it’s right for the government to give a better deal to the banks than to the American people.
So she has introduced a bill that would require federal student loan interest rates to match the rates given to banks. She spoke about this bill today on the Senate floor:
WARREN: Right now as I speak the federal government offers far lower interest rates for loans every single day. They just don’t do it for everyone. Right now the Big Bank can get a loan through the Federal Reserve discount window at a rate of about three quarters of one percent. but this summer a student who’s trying to get a loan to go to college will pay almost seven percent. In other words, the fed gov is going to charge interest rates nine times higher than the rate they charge the biggest banks. The same banks that destroyed millions of jobs and nearly broke the economy. That isn’t right. And that’s why I’m introducing legislation today to give students the same deal that we give the banks.
Watch Warren’s speech:
How about the graduates with existing loans? Will they be grandfathered in at a lower interest rate?
We are drowning in debt!
I had to take my younger son out of Johns Hopkins University, where he would have studied to be an MD. Now he will not go to college! What a great loss!
My son had to drop out of Johns Hopkins university where he would have studied to be a doctor.He is so smart and serious. What a loss!
– Larry B. Wright
That would be Amazing if they grandfathered in older student loans. They have just started deducting as much as they can from my social security disability income, they believe a single mom on full disability unable to work can live on guess. $750.00 per month for me and my one year old, and then they wondeer why people need government help programs, because as soon as they give you money they take it away, vicious cycle. Hope this goes through even if it doesn’t help me.
It is the interest rate that makes the loan sometimes too large of a burden for most people. I came from welfare and wanted more for myself….I worked my way through college and went to law school where loans were a-plenty. I was encouraged to ‘take out more than I need”…with the promise if big lawyer salaries to pay them. When I hit the work world, reality was far different. Jobs hard to find, salaries low…and I was in two massive law firm layoffs…one after 9/11 and one when Lehman Brothers tanked….followed by huge periods of unemployment where a job could not be found…my loans were the burden I could never carry despite my best intentions to make something of myself…and my best intentions to pay. I watched them grow with interest (6%) in horror as I had them in forbearance (delay, whatever its called)…my hands tied with no money to pay. When working, I tried to negotiate a payment I could afford…normally it was pay the rent or pay the loan. Now I am in default, not working for last 2 years from car accident…I am stalked by Conserve a collection agency. They call my family looking for me, they call my facebook friends….I just want to die or move to another country to escape these loans. I regret ever trying to make something of myself in this country….and I resent that the Fed pays .75 and the government wants to profit so much from me….like I am big business because my parents were poor and I needed loans. My original loan of 70K has swelled to 150K….what can I ever do? Its a nightmare….and nobody is doing anything. I am happy to see this for the new students…but what about us in retrospect?
Your story touches my heart. There are similar stories in my own family, lives crippled by student debt. When will Americans return to being a land of compassionate communities, dedicated to the idea that if we all help each other we will all benefit. I am a grandmother. I would like to see a better
society for my grandchildren…less greedy, more tolerant, but above all, more filled human kindness.
I wish you well. Fight for yourself, and fight for your fellow humans. Hang in there; while people resist tyranny (which…face it…is what rule by corporations amounts to) there is hope.”
More extortion from the US Government. Need more of the peoples money, screw them into paying, and just to think that we had the Boston Tea Party, what a joke. They spend every penny and want more. Doesn’t matter if your in a small community, or large your screwed here. We need a new type of government, screw this one. A bunch of spies, and extortion artist. Served twenty years for this country and for what.
Drowning in student debt. I went back to school and got my bachelor’s degree (sigma cum laude, I might add)at 53 years old. I am a certified teacher and am only making 68 dollars a day (before taxes!) as a substitute. I have debt on my own education as well as on my children’s and they each have debt. Thank you for working hard to make it more fair!
Also, the cost of TUITION is ridiculous- especially in my home state of New Hampshire! HELP!
I’d like to add my voice to the chorus of people calling for the grandfathering-in of old loans to the bill. In my case, I graduated 28 years ago from college with $26,000 in debt. I then went to grad school to earn an MBA (in the hopes that my future income would increase enough to make the investment worthwhile) in 1999 and finished the program with a total of $68,000 in debt. Over the years, due to several layoffs and a stint of unemployment from 2009 – 2011, I had to request several forbearances and deferments due to lack of income, and once all the interest was capitalized and added to my balance, I’m now facing a $90k balance at an interest rate of 6.75%. Despite my best efforts to increase my salary, I’m still making less than I made in 2006, pulling in only $68k a year. I can’t afford the $500 monthly payments, so I send what I can each month ($200). However, due to the penalties, fees, and accruing interest, my loan balance INCREASES each month and there’s nothing I can do about it. But if my interest rate were lowered to the current Fed Funds rate of .75%(?), I’d be able to afford the full payment and even start saving for retirement again. By the way – I’m now 49 and haven’t been able to save a penny for retirement because when it comes to paying for rent and food versus saving money, paying the rent and buying food always comes first. So my future isn’t looking very bright at all. My current plan for retirement? – Hope I die early and quick.
I am down with this. How can we help make this happen?
At age 47 I finally earned my BS in Criminal Justice, unfortunately for me it was in December of 2007…right on time for the economy to swirl down the toilet. I diligently applied for 100’s of jobs, many in the CJ field and twice as many everywhere else. Nothing. The only job I have been able to get since graduation is as a part time cashier in a grocery store making $10.80/hour. My credit rating took a nose dive, which is a huge factor many employers consider in a background check. I don’t even have so much as a parking ticket in my “criminal background”, but a low credit score has proven to be as detrimental as an embezzlement conviction. My mortgage is 80K under water and serviced by a notoriously shady company. I have given up trying to work things out with them. So now that I am out of deferment options for my $35K in student loans, it infuriates me to find out that these Big Bank Thieves are getting yet another break. When does the torture end? Ms. Warren, you are just what we need and believe that your diligence will pay off. I just hope that it comes sooner than later.
First, I think that not only should the interest rate on student loans be brought down, but in addition, the interest rate the banks are paying should be brought up! Use the difference the banks pay to provide relief to those struggling to pay back their student loans. Tuition IS outrageous, the for-profit schools are greedy corporations just like the rest of them, making money hand over fist. I went back to finish my BS after taking over 10 years off school. I resisted it for the longest time because I had been able to get jobs and be successful without a degree. But I thought for sure having a degree would result in higher pay and provide more job security. Well I’m a contractor working for the DoD, and guess what, my company has decided to NOT give out rasies because our government customers are suffering through the furloughs. Now I’m saddled with that 6.8% interest on an overpriced tuition bill!
13 yrs later, most of my loans are paid off, at a huge loss to me due to the interest. I had it taken out of bank account automatically, so I could just add it into my budget instead if writhing a monthly check that made my blood boil. Over the years I would see specials on tv about wealthy not paying off their loans, I thought I should do the same, but of all the debt you will ever owe, owing the Gov is the least you should play around with because they can attach future income and there is no hiding from that unless you (a) are wealthy enough to hide your money off-shore/over-seas, and/or (b) are wealthy enough to eventually not be jailed and/or fined and can work out some deal which only wealthy and well-connected are able to do. So, if you can guarantee you will be wealthy and/or well-connected, pay off your loans no matter how hard it is. You can defer them and also show you are having “hard times” which will help in the short run, though in the long run it will cost more and take longer to pay off, so the lesser of the two 1. Being default and have them garnish your future wages, or 2. Pay as you can, as you go….number 2 is the lesser two evils unless, again, you will have guaranteed wealth, then it really doesn’t matter, because the USA has always been for “We the Wealthy and Well-connected People”. Don’t kid yourself in thinking otherwise!
PS working “under the table” is what I suggest everyone do, unless of course, again, u are wealthy enough to hide money else where, legally, thanks to your connections to politicians and law makers who make it possible for you.
Pps; great article –
Why Wealthier Students Get More College Aid
Read more at:
http://www.thefiscaltimes.com/Articles/2013/05/10/Why-Wealthier-Students-Get-More-College-Aid#page1
I chair the Sociology Department at CSU Dominguez Hills and just contacted our Sociology Club about contacting our Congressional Representative Janice Hahn to support and speak about your student loan bill at our commencement where she will be speaking this Saturday. I wish we had more time to mobilize but we will do what we can. Your efforts are deeply appreciated and we would love the opportunity to have a dialogue about this incredibly important bill.
Perhaps, an alternate solution would be for banks to pay the same rate as student loans, particularly if student loans are, in fact, increased!!!
I’m currently paying back 50k in loans. Everyone should be grandfathered in. This could boost economy spending.
I went through college, courtesy of the GI Bill. I was joined by thousands of others, most of whom would have had a very tough time unless they came from very comfortable families. I dispute anyone to tell me that our incredible rise in prosperity, following the Great Depression and WW2, wasn’t due primarily to the huge supply of educated and ambitious college graduates who contributed so much to our culture, much less the economy. I will not denigrate the contributions of the comfortable middle class students, but the gifted hungry and determined who want to get out of the inner city will provide the stimulus for the rest of them, if they aren’t stonewalled by the system.
This is fair and programs should be.expanded to include work-study programs.
I am 24 years old.
I make $16.50 an hour using my degree.
Some say at my age, that is a sign of success.
With private loan payments of $645 and federal loan payments of $380 per month ($1,025 total), I live pay check to pay check. I do not feel successful–I feel god damned lucky. How much longer will my luck last? How can I buy a house and start a family when I already pay the mortgage on my education? Grad school is out of the question at this point with just under $100,000 in student loan debt.
Let’s not let young people with so much potential feel like they are floundering for a real living.
The only good thing is that some students are going to Canada for a less expensive education. That will mean the American higher education will fall victim of its own greed to the powers of the Supply and Demand Curve. They are pricing themselves out of the market.
There needs be some forgiving of student load debt. Our country cannot move forward without an educated youth.
I sympathize with anyone who finds thyself drowning in debt. But the difference between 3.4% interest and 6.8% interest is not a substantive difference between sinking and swimming. When I went to school, I paid over 8% interest on my Stafford loans. I attended school full-time while working part time processing customer payments in a lumber yard on some days and working as a paid intern for a service company on other days. I graduated with honors. One semester I carried 19 credits. One semester, my loan check did not arrive on time. I had to pay my tuition with my food and rent money. I didn’t eat. My loan check arrived and the college was slow to process my refund. I didn’t eat. That was long ago.
I don’t agree that the world owes us anything. With that said, there is no defensible argument for a doubling of the interest rate on student loans.
I worked with a community affiliate of the Industrial Areas Foundation to pass Oregon’s EAST bill that allows for on bill financing of energy retrofits in Oregon. Three years later I’m doing energy retrofits as a union carpenter. I am a “job creator.” I have other ideas for ways to turn waste into jobs, and want to go to school for business so that I can pursue my dream of helping others as I have been helped. The thing is I have never felt that I could afford college. If this bill passes, even as a single father I will be able to go to school and help my neighbors get jobs in the green economy.
t teach system in the world – television- and we squander it on puny stories and gangsta killers. WE could all have Phd’s by now–better rates for student because they will save us someday and we want em trained well.
The banks will not save us, the students will.
THANKS SO Much for this…. Can we get some direct action Addressing SALLY MAE and their predatory lending practices… BAIL OUT AMERICA!
Couldn’t student loans be forgiven upon graduation? My children ended up folding them into their home loans –and then came the burst of the bubble!
This is a step in the right direction, but doesn’t go far enough. I have posted a “Call for Debt Cancelation” on the Peace and Freedom Party website, at: http://www.peaceandfreedom.org/home/articles/general/1062-a-call-for-debt-cancellation
Thank you so much for what you are doing. I know that if we all take the time to put the message out there, we can change the direction that we are going.
Why has nobody connected this unfairness to students to the abuses of fat cat bankers before Senator Elizabeth? Don’t everybody wish she was in the Senate when Bush and Paulson were pushing for those billions of dollars of bailout? The goverment could have paid off those “underwater mortgages” using its power of eminent domain. The homeowners would then be indebted to Uncle Sam who they could not run away from anyway. The goverment will get its money back one way or the other just like the IRS when they garnish wages, right?