Elizabeth Warren (D-MA) has been working on behalf of Americans with student loan debt since she took office in 2012.
The first bill the freshman senator ever filed, back in May 2013, was designed to offer new, shockingly-low student loan interest rates at a time when, barring Congressional action, the rate on federally backed Stafford loans was set to double from 3.4 percent to 6.8 percent.
That original bill, the Bank on Student Loans Fairness Act, went nowhere.
In May 2014 Warren was back with the Bank on Students Emergency Loan Refinancing Act. The bill would amend the Higher Education Act of 1965 in order to allow refinancing of certain existing federal student loans at lower interest rates.
Student loan borrowers could lower interest rates on old loans, which range from almost 7 percent to 9 percent or higher, to match those that the government offers to new buyers today: 3.86 percent for undergraduate loans, 5.41 percent for graduate loans and 6.41 percent for PLUS loans.
The bill affects millions of Americans. Some 40 million, to be more precise. Collectively they owe $1.3 trillion in student loan debt. It is now the second-largest form of consumer debt after home mortgages.
— Senate Democrats (@SenateDems) June 9, 2014
“From 2004 to 2012, the average student loan balance increased by 70 percent. Millions of young people are struggling to keep up with their student loan payments,” Warren and Congressman John Tierney (D-MA) recently wrote. “This is an emergency. Student loan debt is crushing our young people and weighing down our economy.”
Last week Obama threw his support behind the bill.
It is also endorsed by student groups as well as organizations like the Massachusetts Mortgage Bankers Association.
— Rep. John Tierney (@RepTierney) June 9, 2014
As Warren and Tierney point out, “[e]very day, student loan debt stops more and more 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.”
The bill’s opponents argue that it doesn’t address rising college costs:
“This bill doesn’t make college more affordable, reduce the amount of money students will have to borrow, or do anything about the lack of jobs grads face in the Obama economy,” Senate Minority Leader Mitch McConnell (R-KY) said in a statement.
But Warren is moving forward with her campaign in spite of detractors.
— Elizabeth Warren (@SenWarren) June 10, 2014
On Monday President Obama signed an executive order that would make as many as 5 million borrowers eligible to cap their student loan repayments at 10% of their monthly income.
On Wednesday Warren’s bill will go up for vote on the Senate floor. Many doubt it can generate the 60 votes needed to prevent a filibuster in the Senate, much less pass the Republican-controlled House of Representatives.
— The Democrats (@TheDemocrats) June 10, 2014
Regardless of Wednesday’s outcome, Democrats are using it as part of their Fair Shot Agenda, a slate of bills “designed to contrast Democratic values with those of the GOP by daring Republicans to reject poll-tested legislation.”
Image via YouTube, Senator Elizabeth Warren