Thursday, May 9, 2013

Lawmaker: Nation Should Bank More on Students, Less on Banks

Posted By on Thu, May 9, 2013 at 10:02 AM

While a new crop of soon-to-be high school graduates nervously anticipates the financial burden of college, one U.S. Senator, Democrat Elizabeth Warren of Massachusetts, thinks students taking out government loans for college should pay the same rock-bottom rate as the nation's biggest banks.

In something called the Bank on Students Loan Fairness Act, Warren said her proposal would allow the low-rate loans one year to give Congress some time to figure out a long-term solution to interest rates. Right now, federal loan rates for new students are set to double on Monday, July 1, to 6.9 percent.

"In other words, the federal government’s going to charge interest rates nine times higher than the rates they charge the biggest banks," Warren said on the floor of the U.S. Senate. "[These are] the same banks that destroyed millions of jobs and nearly broke the economy."

Warren's bill would cut student loan rates to that same 0.75 percent for the next year.

Progressive think-tank the Campaign for America's Future endorsed the proposal as a way to end the student loan crisis instead of "kicking students when they are down."

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