Sen. Elizabeth Warren (D-MA) introduced a bill on Wednesday that would give college students the same interest rates on their federal student loans as banks do when borrowing from the Federal Reserve.
“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,” Warren said.
According to The Hill, the Students Loan Fairness Act would call for the Fed to “float the money” to the department for one year, giving Congress enough time to enact a long-term agreement on student loan rates.
“Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about .75 percent,” Warren said. “But this summer a student who is trying to get a loan to go to college will pay almost 7 percent. In other words, 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.”
On July 1, Federal Stafford subsidized loan rates for incoming students will double to 6.8 percent, which she said would only increase pressure on them.
“Keep in mind, these young people didn’t go to the mall and run up charges on a credit card,” Warren said. “They worked hard, they stayed in class, they learned new skills and they borrowed what they needed to pay for an education.”
Arturo R. García is the managing editor at Racialicious.com. He is based in San Diego, California and has written for both print and broadcast media, including contributions to GlobalComment.com, The Root and Comment Is Free. Follow him on Twitter at @ABoyNamedArt
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