Posted In: Future Educators, Massachusetts, Moving in Congress

Sen. Elizabeth Warren introduces student loan refinancing bill

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by Colleen Flaherty

Student debt is erupting—more than 70 percent of America’s students borrow money to attend college, and the average student graduates from college owning nearly $30,000. Total student loan debt currently stands at a staggering $1.2 trillion, surpassing total credit card debt.

Sen. Elizabeth Warren (D-Mass), alongside several congressional colleagues, has taken an important step to combat this growing problem.

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“Exploding student loan debt is crushing young people and dragging down our economy,” said Senator Warren while introducing the bill. “These students didn’t go to the mall and run up charges on a credit card. They worked hard and learned new skills that will benefit this country and help us build a stronger middle class and a stronger America.”

The Bank on Students Emergency Loan Refinancing Act, introduced in the Senate by Warren yesterday, would provide relief to some 40 million Americans struggling with student loan debt.

Currently, rates for new borrowers are as low as 3.86 percent, while recent undergraduates borrowed at a rate of 7 percent. Older loans may have rates even higher than that. The bill would allow student loan borrowers with higher rates to refinance and pay the same low rate. This applies to students who took out a federal student loan before July 1, 2013, as well as private student loan borrowers in good standing.

“Allowing students to refinance their loans would put money back in the pockets of people who invested in their education,” said Warren.

In order to cover the cost of refinancing, the bill would implement the “Buffet Rule,” a minimum tax rate of 30 percent for individuals with incomes of $1 million or more to ensure the wealthiest pay their fair share to help the 99 percent of Americans affected by this growing debt.

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“[Student loan debt] is stopping young people from moving out of their parents’ homes, from saving for a down payment, buying homes, buying cars, starting small businesses, saving for retirement, or making purchases that grow our economy. It doesn’t have to be this way,” said Warren.

David Tjaden, a recent University of Iowa graduate and chair of the NEA Student Program, supports Warren and her efforts when it comes to relieving the burden on the middle class.

“The refinance bill really does take the money off of Wall Street to help the average citizen,” said Tjaden, who represents over 60,000 future educators nationwide. “They’re talking about something game-changing.”

Many future educators like Tjaden are worried about what stifling student loan debt will mean for the future of the teaching profession, and what that means for America’s classrooms.

“This bill will impact young educators and those who are entering the profession right now,” said Tjaden. “Every year, educators spend money out of their own pockets for their students, for their classrooms. We ask our educators to do more and more with less and less. How can they continue to do that while carrying this massive debt? What impact will it have on students?

“We have to organize. We need to let Congress know this is an important issue that affects all of us.”

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Reader Comments

  1. Christine

    I have a high loan, and how can pay $ 3000 per month? It is impossible to pay this amount monthly. I sick with a terminal disease, and remember to send an email to Nelnet, I cannot pay this amount, is more that I can gain, I need to steal a bank. It is incredible, and has to pay other things too, including my treatment, because my insurance is not covering a 100% just a 80% and bills are high. It is ridiculous, that government permits to do whatever they want.

    Reply
  2. slk

    “all those poor students”!!! that doesn’t explain why everyone who got a loan, didn’t go to school!!! it doesn’t explain, why student loanee’s have 5 year paid apartment rentals, brand new cars, state of the art electronic toys etc, etc!!! and how many that went to school..how’s a sensitivity class going to get you a job??? what’s wrong with getting a skill, thats a lot cheaper…work!!! and to think that one day, these einsteins will be running the world!!!

    Reply
  3. Kerry Hyman

    Elizabeth Warren speaks the truth for me and for you. Right wing profit protectors will necessarily need to push back and demonize her for her attempts to “tell it like it is.” The GOP and their Tea Party fringe has been very successful in formulating 30 years of policy that have:

    1) Reduced corporate taxes through a myriad of loopholes in the tax code.
    2) Granted unprecedented access to our legislature through campaign finance rules (Super PACs) that favor the well heeled and well connected over the commoners.
    3) Free Trade Agreements that have incentivized the offshoring of our magnificent manufacturing sector that once employed our unskilled labor force to sweatshops abroad to maximize the corporate profits and Wall Street returns while the USA plunges into insolvency.
    4) Tax policy that has given our top earners every advantage through a tax code that grants exemptions, lower rates for capital gains, tax deferred annuities, carried interest, etc. while the rest of us carry the burden of the gigantic USA government including our exquisite military, infrastructure, R&D, and the daily operation of the most advanced sophisticated nation on earth.

    While the top advances and the middle class declines, the only entity that can intercede as an intermediary or referee to decree justice between competing interests, namely the USA government, has been framed as the ENEMY by our Right Wing profit protectors to paralyze any intercession. BRILLIANT!!!

    Reply
    • slk

      bama “had” two years of total control, and “nothing”!!! you just love to hear him talk…no action, just talk!!! you want to know what he’ll say in ’16 state of the union, just listen to his 5 previous ones!!! six years ago, he was troubled about the va…nothing, six years ago he complained about being “unpatriotic” about raising the debt ceiling…we need nasa back to get to the debt ceiling!!! joseph would be soo proud of you!!!

      Reply
      • Kerry Hyman

        To SLK:
        When, in our nations history, have you seen anywhere near the 430 plus filibusters used to stonewall the majority in a Congress? If you want to see what I consider to be a perfect example of how money talks in our “pay to play” legislature, take a look at Bill S3816, “Creating American Jobs and Ending Offshoring Act (2010). Pay particular attention to how they voted and what organizations favored it and which ones opposed it. Telling!
        Here was a Bill that would have granted corporations large tax incentives to keep jobs home and hire USA workers, and even more generous breaks for hiring our returning Veterans. BUT… it would have curtailed or reduced the myriad of tax payer subsidies, exemptions, credits, write-offs and other loopholes that exist in our tax code that benefit and almost incentivize the offshoring of Jobs to sweatshops abroad.

        Lost in the rhetoric of today’s political stand-off between the two parties is the American consumer (demand) in the supply and demand dynamic. Some would suggest that the USA workforce concede pay, work harder and longer, and lose other workers’ rights as a concession in order to be a more attractive workforce… Some have likened this suggestion to entering our workers in a “race to the bottom.” I call it, entering them in a pissing match with a pole cat!

        Reply
        • slk

          you accidently on purpose forgot the USA has by far the highest corporate tax in the world!!! no wonder bama’s “jobs czar” (supposed to get jobs here), has sent more of his employees (general electric), over seas then here!!! jobs??? microsoft, big bama donater is laying off 18,000 people…and it’s all the gop’s fault!!! checkout harry (memory’s going)reid’s desk for all of the house bills he’s refusing!!! you keep listening to professor!!! socialism has never worked and changing the name to liberal socialism will still be the same!!!

          Reply
    • slk

      you just want them to wipe away, your mistakes!!! had you thought about the responsibilities, just a little, you may have taken a different approach!!! but it’s easier to say, “wipe it away” while i do more stupid things!!!

      Reply
  4. Piia Pehap

    I am on an income sensitive repayment plan. My IBP payment doesn’t even cover the interest and so the balance of unpaid interest is put on top of (accrued) my principle balance; in other words my principle balance grows monthly. I paid my original loan amount years ago. My current balance is more than double the original principle balance. The way my loan is set up I will never be able to pay off my debt, as an educator I will never be able to afford the payment amount that would decrease my debt. How is this legal? I’m like an indentured servant with no chance of freedom. I signed up for the 10 year public service forgiveness plan a few years ago when it became available, but I’m not sure if I’ll make it that long.

    Reply
    • Christine

      Piia,

      It is impossible to paid your student loan with a French method. I requested to Nelnet the forgiveness implemented, and they have never sent me any paper by regular mail. Education must be free, and less expensive. Why in Europe the costs are less than here, and the education is excellent.

      Reply
    • slk

      why didn’t you report the person who made you sign the contract!!! maybe next time you’ll think first!!!

      Reply
  5. Caren Leslie

    My daughter recently graduated with an art teaching degree. While attending college and living at home our household was hit hard by the great resession. Jobs are scarce in her profession at this time. And starting pay if she finds a job has decreased so much that she would not even be able to move out and pay all of her student loans

    My husband and I would like to downsize our home to our retirement home, I.e., single story home. This is not possible with an adult child living at home. Student loans are affecting 2 generations at my house.

    Please so something for these young graduates and the near future social security parents.

    Reply
    • Noel

      Hi,

      Your pain is GREAT and there is a solution to it. Many young people are going into business with very little money. There are more LLC (Limited Liability Companies) forming now than any point in history. The good news is… your daughter does not need an LLC.

      Accounting and Bookkeeping is the way to go. Every small or large business needs Accounting and Bookkeeping services. The field has no limit. Take it from me. I’m an Accountant. The demand is endless.

      A lot of people laugh at me for saying this. WE DO NOT NEED BIG Corporations. The answer to the economy is small business.

      Reply
    • slk

      art??? she should’ve had counseling before she signed!!! science or math would’ve been more profitable!!!

      Reply

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