Salon: Elizabeth Warren Q&A: Students deserve the same break that big banks get:
"The U.S. government invests in big banks by giving them a great deal on their interest rates," freshman Sen. Elizabeth Warren said in an interview with Salon on Wednesday afternoon (the transcript of which is below). "We should make at least the same investment in our students."
Warren was discussing the first bill she has introduced in the Senate, a plan released on Wednesday to address the crisis of outstanding student debt - which topped $1 trillion this year, with over 37 million Americans owing thousands of dollars in higher education costs that could take decades to pay back.
Student debt is now the second-highest form of debt in America - behind only mortgage debt - with the number of borrowers and the average balance increasing 70 percent since 2004. Research from the New York Federal Reserve Board indicates that this has begun to have an impact on the broader economy, with young people burdened by student debt more reluctant to take out auto or home loans. And without congressional action, this will get worse: on July 1, interest rates on federally subsidized Stafford student loans will double, from 3.4 percent to 6.8 percent. This will effectively raise costs for 8 million student borrowers by $1,000.