Elizabeth Warren and Student Loan Reform

Elizabeth Warren and Student Loan Reform

On Wednesday Senator (D-Mass) Elizabeth Warren introduced her bill, The Student Loan Fairness Act.  As a result of astronomically rising college tuition costs and rising interest rates, Warren’s bill would seek to lower Federal Student Loans from 6.8% to 0.75%.  The 0.75% is currently the interest rate the government gives to banks.  Without question, I can say I would thoroughly support an action of this caliber.

I work in a private college’s admissions office, and consult/console parents and students on a regular basis about tuition costs.  The amount of money that families are grappling with paying to afford the one thing we’ve told them they cannot live without is disgusting.  I have seen parents and children make sacrifices I never even dreamed of, to make the possibility of college possible.  Mostly I have seen this issue effect the middle class families most.  If you are poor, you get the Pell Grants and other grants thrown at you.  If you are rich, you don’t have to worry about paying for college, but those people in the middle are getting squeezed out. Luckily I graduated from college 7 years ago when tuitions were almost half what they are today, so the very little in loans that I took out, has not effected me to any great degree.

Interest rates are going from 3.4% to 6.8% on Federal Direct Subsidized Stafford Loans starting July 1st.  When you stop and think about it, that increase over a 4 year span does not seem like a helluva lot, but it will likely be an increase of $5,000 over the life of the loan’s disbursement.  We can not afford to keep squeezing out our youth like that.  We have set up this country such that if you get a college degree, you get a job, but now it seems like the newly graduated, can only get entry level, nothing jobs, that help them to pay off the loans of their criminally exorbitant college tuitions.  If we are serious about real economic reform, we should be serious about making it possible for our youth to actually pick themselves up and be fully independent contributors to society when they graduate.  Lowering these interest rates would not fix everything, but I can tell you, I have seen the difference of a few thousand dollars mean a lot to families when deciding where to send their children.

Elizabeth Warren was able to attend college on the G.I. Bill and look at her now.  As a country we should be prepared to make a similar investment in our youth’s education. How we ever expect recently graduated students to be able to take out a home or small business loan, much less pay for graduate school is beyond me.  By keeping tuitions and interest rates high, we’ve ensured that our youth (which technically I count towards) will never be able to earn more than the generation before us.  We can still fix this, but I’m happy people are at least talking about it now.

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