Sen. Elizabeth Warren Pushes For Student Loan Reform

During a roundtable discussion with students and higher education policy-makers, she called for lowering interest rates for one year.

Photo via Steve Annear.

Photo via Steve Annear.

Senator Elizabeth Warren said long before she ever pictured herself in her current role, she worked with members of Congress to address the student loan issues in the country. Now, as a representative of Massachusetts, Warren is trying to push legislation forward to fix the financial problem college students face.

On Monday, during a roundtable discussion in Boston, Warren and Congressman John Tierney continued talks about the “Bank on Students Loan Fairness Act,” a proposal that would drastically slash the student loan interest rate for one year while elected officials look for a long-term approach to helping coeds get an affordable education, making sure they can afford their loan payments in the future.

According to Warren, on July 1, student interest rates are set to double, rising from 3.4 to 6.8 percent. Meanwhile, she says, large financial institutions like banks can borrow from the Federal Reserve’s “discount window” at a rate of 0.75 percent. She said there is an “imminent” deadline to act on this proposal in the best interest of the economy. “Keep in mind, every time the Federal Reserve opens its window to let the largest banks borrow at [point seven-five percent] it’s not even scored on the budget—they are getting a subsidy. They get away with it, and it’s a subsidy that remains entirely hidden in the federal budget. But [for some reason] there is a resistance to give our kids some kind of break. Surely we care about our kids as much as our banks,” Warren said.

Warren said the proposed legislation doesn’t change the eligibility requirements for student loans, and doesn’t increase the amount available for them. “What it does do is keep the costs down for our kids,” she said.

Both Warren and Tierney argued Monday that the burden of high student loan debt is a threat to economic recovery, because students can’t afford to move out of their parents’ houses, buy cars, or search for a home of their own, based on the financial weight they carry on their shoulders once they graduate. “Families are crushed by student loan debt which means they can’t support an economic recovery,” said Warren. “In the short term, with rates about to double, what we need to do to invest in our kids so they can get an education, and so they can be everything they possibly can be.”

Students present at the hearing, which included members of the state’s Board of Higher Education and officials from American Student Assistance, asked if there was a plan in place to also lower overall college fees and costs. Warren said as of now, there was not, but it would be examined once the one-year fix was in place.


  • welovetheUSA

    This has got to stop..these kids made their beds and need to take responsibility , myself and my kids all worked two jobs to get through college. There are not going to be any college jobs out there to go to for some time, given that most kids seek degrees in fields that are full up and have no demand.

  • Rick Wood

    These students need to stop voting for the Liberal politicians that are causing these problems and embrace more entrepreneurial ventures even if they are small. More government involvement is not the answer. I do think it categorically unfair for the banks to have a 0.75 loan rate that is not available to the rest of us. We also need either no income tax or a flat tax if we are going to have one at all. We have to minimize what political leaders can do to us as they are NEVER interested in doing anything for us. These Conservative politicians should stop supporting these wealthy corporations that engage in Capitalism to the point of greed that is so excessive as to destroy what it is all about. The Federal Reserve must go as well. All they are doing with Obama’s approval is supporting Wall Street that has partied while Main Street suffers with its students in debt.

  • Kathy Jankas Russo

    People who don’t have kids in college today, don’t get it. College tuition has skyrocketed. There’s NO WAY today that any young person can “work their way thru college.” Who the hell earns enough to pay for it? I’m not a liberal, but, I’m in favor of any help I can get to put my child thru college so she won’t be living paycheck to paycheck the rest of her life like me….who didn’t go to college.

  • MRobin

    Senator Warren should immediately sign on the Senator Harkin’s S 985, to restore the Glass-Steagall Act! Senator Warren should immediately sign on the Senator Harkin’s S 985, to restore the Glass-Steagall Act. If she really wants to take on the “too-big-to-fail” (what a dumb term, they all already failed) she needs to come through on her campaign promise and join the fight to sever Wall St from the real economy, cancel the bail-outs, outlaw the gambling and shut down the JP Morgans, the Goldman Sachs, and the rest of the creeps. Glass-Steagall does it! We need to free our national credit up so we can actually the necessary money into education, infrastructure, the health care system, science etc. Education should never be a for-profit-business! But the first step is to change the over-all system by putting through FDR’s Glass-Steagall standard! Remember this banking reform was part of the first 100 days which also included massive investment into building schools, educating teacher, the CCC camps, the 4 corners project etc. It really is a matter of making a political decision to bring our nation back on track and take the power away from big finance. Don’t negotiate with them, shut them down! Everybody reading this, should immediately call Senator Warren’s office, or track her down in her district, and demand she puts her name on Senator Harkin’s S. 985. Nothing but Glass-Steagall will work!

  • kobe

    It’s all over the students who are the main sufferer and has to make their own way. With the increasing rates of student loan from decade, is one of the biggest obstacle but many students are even overcoming these blocked ways and seeking towards their future. Its students who have to work in making their own way out for which they should be opting for part time job and keep on ticking off the main principal balance. This would really going to help them to reduce the loads of debt and can make a good future. Above that can also take the assistance of good loan firm: avoiding any skips of repaying back your loan.

  • Anna Willson

    I think we really need student loan reform. Yes, government must make lowering interest rates for one year. When I was in college my parents got student loan for me. So, I started to work when I was in college. My fee was very small and sometimes I had to check advance payday loan location to stay afloat. I think that the person himself needs to understand if he can afford such loan or not. Of course I understand that consumers should stay very responsible when they get approved for short term personal loan. I know that many people got into debt cycles with such kind of loans.