Unless Congress acts by July 1, 2013 student loan rates will double from 3.4% to 6.8%. Meanwhile banks borrow money from the US Government at only .75%. Senator Elizabeth Warren of Massachusetts has filed a bill to give students the same loan rate as banks for a year. Why should taxpayers be supporting banks – a private interest over a public interest – helping students to complete college.
In a Huffington Post article entitled Elizabeth Warren: Student Loans Should Have Same Rate Big Banks Get and in an article by Joan McCarter on Daily Kos entitled Elizabeth Warren: Students should get the same loan rate as big banks a video is included of Warren’s statement before the US Senate:
“Some people say that we can’t afford to help our kids through school by keeping student loan interest rates low,” said Senator Warren. “But right now, as I speak, the federal government offers far lower interest rates on loans, every single day–they just don’t do it for everyone. Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about 0.75%. But this summer a student who is trying to get a loan to go to college will pay almost 7%. In other words, the federal government is going to charge students interest rates that are nine times higher than the rates for the biggest banks–the same banks that destroyed millions of jobs and nearly broke this economy. That isn’t right. And that is why I’m introducing legislation today to give students the same deal that we give to the big banks.”
“Big banks get a great deal when they borrow money from the Fed,” Senator Warren continued. “In effect, the American taxpayer is investing in those banks. We should make the same kind of investment in our young people who are trying to get an education. Lend them the money and make them to pay it back, but give our kids a break on the interest they pay. Let’s Bank on Students… Unlike the big banks, students don’t have armies of lobbyists and lawyers. They have only their voices. And they call on us to do what is right.”
Daily Kos, joined by the Center for American Progress goes a step beyond just reporting the story and posting the video by including a link to urge people help push this legislation by urging their Senators to co-sponsor this legislation. Click on this link to tell the Senate to give students the same low interest rates the big banks get
Please help build support for this bill by joining in this effort.
Contrary to Republican goals of doing nothing, Democrats in Congress are moving forward addressing the nation’s problems without Republicans. As part of the recently passed Health Care Reform Legislation, Democrats added a rider to also reform the student-loan program. This is a major reform that will lower the interest rate college students pay, extend their repayment time and save $67 billion according to an column by Froma Harrop in the Seattle Times entitled “Student-loan companies don’t need welfare”
As Harrop notes, “…when corporations get taxpayer handouts, that’s not welfare in the GOP book of rhetoric. Take away a company’s subsidy, and you have a “government takeover”. Such is the Republican stance on Democratic plans to remove the corporate middleman from the federal student-loan program, included in the recently passed House health care reform bill”
President Obama’s weeekly address on March 27, 2010 addressed the student loan issue. The White House press release notes that “These reforms save the taxpayers $68 billion over the next decade by ending the subsidies given to banks and middlemen who handle student loans. The money saved will help expand and strengthen the federal Pell Grant program. The reforms will also cap college graduates’ annual student loan repayments at 10% of their income, revitalize community colleges, and increase support for Minority Serving Institutions.
You can read his full comments by clicking on the link above, hear audio or watch video.
The Democrats are acting to address our nation’s future. The Republican’s are gungho to go back to our past. They are continuing to try to obstruct Congress and the President from passing needed legislation.
If the public has any reason to be upset at Congress, it is because of the Republican Party of No has made a concerted coordinated effort to prevent Congress from moving forward and addressing our nations critical concerns in a constructive and meaningful way. It’s time to boot the obstructionist Republicans out of office.
Democrats need to re-engage in the political process and work to turn our voters out in the coming elections. It’s not enough to just about bemoan and complain about the Republicans negative and obstructionist tactics and point fingers.
No one ever said change would be easy. The big mistake many of those wanting change made was assuming that electing Obama was the end of their need to stay engaged. It’s time to re-energize and get back to work.
Sorry students of America but if you hope to get financial aid from the US government, don’t hold your breath for a better deal down the line. The newly elected House Majority leader(sic) doesn’t support the government helping you out. He instead supports his moneyed supporters – for profit colleges and trade schools and private school lenders.
As reported in Sunday’s Washington Post Boehner runs the Freedom PAC which over the last 10 years has given $2.9 million dollars to GOP lawmakers.
In the most recent election cycle, 2003-2004, the Freedom Project received $572,719 from individuals, according to records filed with the Federal Election Commission and analyzed by PoliticalMoneyLine. More than half of that, $292,570, came from employees and lobbyists for private student lending companies and for-profit academic institutions.
Individuals affiliated with the private student-loan industry gave the PAC $220,020, including $52,670 from officers of Sallie Mae. Sallie Mae was established in 1972 as a government-sponsored organization that over the past decade has become privatized, and is now a Fortune 500 company specializing in student loans.
Boehner’s PAC received $72,550 in donations from employees and lobbyists from for-profit colleges and trade schools.
So is it any surprise that Boehner has sponsored legislation that would restrict the ability of the US Dept of Education to cut fees to make government loans less expensive.
During the current congressional session, Boehner’s committee endorsed his legislation to allow the for-profit colleges and trade schools to gain millions of dollars in federal subsidies.
The measure would eliminate 1992 regulations designed to prevent the for-profits from signing up unqualified students and collecting student loans for tuition. Boehner would bar traditional colleges from denying credits earned at for-profits on the grounds that the for-profits are not accredited.
I find that last statement particularly interesting in the light of trying to increase academic excellence and learning. It seems to say that you can go to an unaccredited college and force accredited colleges to accept the course work. You mean I can get a loan to take a course on the Internet and the University of Washington must accept it toward graduation even though the program is not accredited. And all just because I got a loan from a private lending source.
So this is the Republican agenda to support education. Support for profit colleges even if not accredited and support private school loans over US government loans.