Warren's Loan Bill Gets Cold Shoulder as Student Rates Spike
'Most popular proposal' doesn't get a vote as student loan rates set to double Monday
Despite the groundswell of support behind Senator Elizabeth Warren's (D-Mass.) popular student loan proposal, Senate leaders have dismissed the legislation opting instead to let student interest rates double Monday as they pack their bags for a Fourth of July holiday recess.
Because of Congressional inaction, students will be left in the lurch as federal Stafford loans spike to 6.8 percent.
The Warren bill proposes to tie student loan interest rates to the same "discounted rates" given to big banks from the Federal Reserve, lowering student loan rates to 0.75 percent and saving students thousands of dollars.
"We subsidize bankers whose excesses blew up the economy, why not subsidize kids struggling to pay for the education we say they need?" writes Robert Borosage. However, he adds that the legislators "dismiss the Warren proposal out of hand."
With more support than any other proposal, petitions backing the bill have received over a million signatures and presidents from more than 25 colleges have backed the legislation. A recent poll conducted by Public Policy Polling found that 60 percent of respondents backed Warren's idea, including 56 percent of Republicans.
However, despite the widespread popularity, the bill has been systematically ignored by Congress and has not yet come up for a vote.
As the Huffington Post reports, "several other proposals from both sides of the aisle have received a vote, but they all raise the cost for borrowers over time, and many received pushback from advocates for students."
“The fundamental issue is whether the United States government should be making a profit off students,” charged Warren.
Failing to bring this option to the table, Senate Democrats Thursday effectively conceded to the rate spike and are instead hedging their bets on an upcoming July 10th vote to decide on a temporary solution to freeze interest rates for one year.
In the meantime, the low- and middle-income students who are eligible for the subsidized loans are guaranteed that their interest rates will double Monday promising roughly $2,600 more in costs every ten years, according to US Department of Education budget data.