by Colleen Flaherty
U.S. Senator Elizabeth Warren has a simple message for Congress: we need to support college students who need a loan as much as we support big banks.
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Last week, Warren introduced the Bank on Students Loan Fairness Act in the Senate. The bill would cut the federal student interest rate to 0.75 percent, the same rate offered to banks by the Federal Reserve.
“If the Federal Reserve can float trillions of dollars to large financial institutions at low interest rates to grow the economy, surely they can float the Department of Education the money to fund our students, keep us competitive and grow our middle class,” Warren said on the Senate floor.
The bill is a proposed solution to the scheduled doubling of the student loan interest rate this summer. As it stands, if Congress doesn’t act before July 1, the rate for students will increase to 6.8 percent from the current 3.4 percent.
“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,” said Warren. “That isn’t right.”
The public is behind her. More than 300,000 people have signed her MoveOn.org petition in support of Bank on Students. Not shocking considering tuition at four-year public colleges has risen 27 percent since 2008 while the median household income has fallen 8 percent in the last six years.
David Tjaden, a recent University of Iowa graduate and chairman of the NEA Student Program, stands with Warren in her fight for college affordability.
“When we talk about the rising cost of tuition and the student loan rates doubling, we’re talk about students who might have to set aside that college acceptance letter, because college is just not affordable at this point. As a nation built on public education, that should never be the case,” said Tjaden.
According to Tjaden, these rising costs and high-interest loans could prevent people from attaining higher education when our economy needs it the most.
“We know that as we move forward, degrees are becoming more and more important in order for us to stay globally competitive. Shouldn’t we be doing everything we can to make sure we’re competitive? A very simple way to do that is to allow students to borrow for college at a low interest rate.
“Not to mention, the reason we have to let the banks borrow at a low rate is so it doesn’t hinder the economy. Look at the massive amount in student loan debt. If we’re talking about a hindrance on the economy, there is a big one.”
In 2012, student loan debt surpassed $1 trillion — an amount greater than the nation’s total credit card debt — and recent research suggests the growing debt is hurting economic recovery. But for Tjaden and the future educators he works with, the most important thing is that higher education is attainable for anyone who wants to attend.
“Our student members are very passionate about this. If there’s one thing that we can help control in this inflation of college affordability, at least don’t penalize us for taking out massive loans to get that education. For the senior in high school who wants to go to college and be a teacher to change lives, this could make all the difference in the world.”