Sen. Elizabeth Warren wants to give college students the opportunity to borrow money at the same low interest rate enjoyed by the nation's biggest banks.
On Wednesday, May 8, Warren introduced her first standalone piece of legislation, a bill that would allow students who are eligible for federally subsidized Stafford loans to borrow at the same rate that banks get from the Federal Reserve.
With the interest rate on federal student loans set to double to 6.8% this summer, Warren said it's unfair that big banks can borrow money at 0.75% from the Federal Reserve.
The following is an excerpt from a statement made by Warren concerning her proposed legislation:
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.
That isn't right.
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.
MSNBC reports that student loan debt in America has skyrocketed to more than $1 trillion, and experts warn that long-term economic recovery may be in jeopardy if nothing is done to offer student borrowers some relief. Experts worry deep debt may hinder students and former students from investing in homes or cars, starting businesses, or even saving for retirement.