Elizabeth Warren: Student Loans Should Have Same Rate Big Banks Get

[Cebu_4_2]

Elizabeth Warren: Student Loans Should Have Same Rate Big Banks Get Posted: 05/08/2013 6:18 pm EDT | Updated: 05/09/2013 2:27 pm EDT





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WASHINGTON -- Sen. Elizabeth Warren (D-Mass.) unveiled her first bill Wednesday, designed to set student loan interest rates at the same level the Federal Reserve offers to big banks.
With some student loan rates set to double (http://www.huffingtonpost.com/2013/03/28/student-loan-interest-rates-double-2013_n_2973536.html) on July 1 -- from 3.4 percent to 6.8 percent -- Warren's bill (http://www.warren.senate.gov/documents/BankonStudentsBillText.pdf) would reduce student loan interest rates to 0.75 percent, opening the Fed's discount window to students.
"Every single day, this country invests in big banks by lending them money at near-zero rates," Warren told The Huffington Post. "We should make the same kind of investment lending money to students, who are trying to get an education."
The freshman senator said she plans to mobilize (http://boldprogressives.org/elizabeth-warren-introduces-bill-to-require-student-loan-interest-rates-to-be-same-given-to-big-banks/#.UYq-wiufHac) students -- those most affected by student loans -- to help get the bill through the Senate. "This is about their lives and if they are active in this fight, we can make this change," Warren said.
The Fed justifies loaning money essentially for free to major banks so they can maintain liquidity during emergencies. But Warren noted that student loan debt also affects the economy. Research by the Federal Reserve Bank of New York (http://libertystreeteconomics.newyorkfed.org/2013/04/young-student-loan-borrowers-retreat-from-housing-and-auto-markets.html), reported by Washington Post's Wonkblog (http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/17/student-debt-is-dragging-down-the-u-s-economy/), found that the amount of student loan debt of Americans under the age of 25 has doubled in less than a decade, from $10,649 in 2003 to $20,326 in 2012. Along with this increase in student debt comes a decrease in the likelihood someone will take out an auto loan or a home mortgage. That burden is a drag (http://www.huffingtonpost.com/2013/04/17/student-debt_n_3100940.html) on the economy.
Warren pointed to the GI Bill and National Defense Education Act loans, which funded her education. "It wasn't just soldiers that got the education, it was the whole economy that benefitted from that investment," Warren said. "Why not give students a break? Why not let them in on the same great deal that the big banks get?"
According to the Project on Student Debt (http://www.ticas.org/files/pub//Release_SDR12_101812.pdf), college students who graduated in 2011 owed more than $26,000 in student loans, which Warren said is, "crushing our young."
Warren ran for Senate promising to fight against an economic system she described (http://www.huffingtonpost.com/2012/09/05/elizabeth-warren-speech-text_n_1850597.html) as "rigged" in favor of big business. She said her legislation is intended to raise questions about why banks get a dramatically subsidized loan rate and what can be done to reduce debt burdens for students and consumers. The simple answer -- that the Fed could subsidize students instead of banks -- is an uncomfortable one and goes to a core inequality at the heart of the financial system.
Robert L. Borosage, co-director of the Campaign for America’s Future, a progressive public policy think tank, in endorsing Warren's bill, said in a press release (http://www.ourfuture.org/news-release/2013051908/senator-warren-s-bill-will-ease-tuition-burden-students) that "Instead of kicking students when they are down, we should end the student debt crisis."

[Glass]

I'm paying 18% on my student loan, which I was tricked into taking out. I got "free" education assistance when I was studying at Uni. It was paid in fortnight installments. I was tricked into swapping that assistance for a lump sum loan in one hit. Tircked in that something that I would not have to pay back became something I did have to pay back.

7th trump will like this bit: I had to register for a TAX FILE NUMBER (SSN) in order to qualify. This converted me in to a taxpayer for whom it is no longer voluntary to pay taxes. Tricks of the words of law.

The trade off was that I could do the last year full time instead of working full time + (about 60hrs a week) and studying as best I could manage which was full time as well.

Anyway. After 17 years my loan is nearly paid out.

There was a court case some 10 years ago where a female student went to the high court and had her loan quashed as it was unlawful. That case has been purged from the court records. I would have really liked to know more about that case.

[madfranks]

Interest rates need to be set by the market. Mandating interest rates at below market rates distorts the economy. You know why millions of people are going to college to get degrees that are not helping them find jobs? Because the distorted market signals of manipulated interest rates are telling people that college degrees are highly demanded, when in fact the real economy does not need this many college degrees. If less people went to college, the degrees would be more valuable.

[osoab]

Who did she plagiarize this idea from or is it a natural feeling from her Cherokee roots?

[Glass]

Interest rates need to be set by the market. Mandating interest rates at below market rates distorts the economy. You know why millions of people are going to college to get degrees that are not helping them find jobs? Because the distorted market signals of manipulated interest rates are telling people that college degrees are highly demanded, when in fact the real economy does not need this many college degrees. If less people went to college, the degrees would be more valuable.

The other aspect to this is competency. With cheap education loans and a lot of people getting an education and debt with that there is a big demand to pass the education course. I could tell the story of the head of the deptarment I studied in being suspended for 9 months after calling out about 8 asian students who all submitted the same final paper.... word for word. I had the opportunity to take a look at them. There was uproar when they were failed. He was suspended. They all passed the course. I wondered if my degree was worth anything. When I started working in that sector I realised it had little value other than the troubleshooting and research skills I had learned. Nothing else held any value in my working life.

[Serpo]

Go into this kind of debt to learn stuff they teach us....hahahahahahahhaha

Only one thing we need to learn and that is the gov are scammers