June 07, 2014

Springfield Republican: With vote nearing on Sen. Elizabeth Warren's student loan debt refinancing bill, President Barack Obama offers up his support

By Robert Rizzuto

June 7, 2014

WASHINGTON - With President Barack Obama set to officially endorse Sen. Elizabeth Warren's Bank on Students Emergency Loan Refinancing Act on Monday, the commander in chief dedicated his weekly address to highlighting the bill and the problem of college debt dragging down the next generation.

"In a 21st century economy, the surest pathway into the middle class is some form of higher education. The unemployment rate for workers with a bachelor's degree is just 3.3 percent - about half what it is for high school graduates," Obama said in his weekly address. "The typical graduate of a four-year college earns $15,000 more per year than someone with just a high school degree. But at a time when college has never been more important, it's also never been more expensive."

College debt in the United States has topped $1.2 trillion, making it the number one source of debt, surpassing credit cards. The bill introduced by the Massachusetts Democrat in early May would allow people to refinance student loans under the current rates and give people with private student loans a chance to refinance them under the federal plan under much lower interest rates.

In proposing the bill, Warren pointed to a report released by the Government Accountability Office in January which determined that based on the student loans issued between 2007 and 2012, the federal government stood to profit to the tune of $66 billion from the interest alone.

"This is $66 billion on just the loans issued during that period. That is insane," Warren previously told MassLive.com. "This (bill) brings that down. Instead of taxing students who can't afford to pay for college up front, it says we are investing in those students."

The bill would be paid for by increasing the tax rate paid by the wealthiest Americans by enacting the so-called Buffett Rule.

On Saturday, Obama indicated he was indeed supporting the measure, and alluded that he will be taking action on his own to provide relief sometime this week.

"Just like you can refinance your mortgage at a lower interest rate, this bill would let you refinance your student loans. And we'd pay for it by closing loopholes that allow some millionaires to pay a lower tax rate than the middle class," Obama said. "That's the choice that your representatives in Congress will make in the coming weeks - protect young people from crushing debt, or protect tax breaks for millionaires. And while Congress decides what it's going to do, I will keep doing whatever I can without Congress to help responsible young people pay off their loans - including new action I will take this week."


"I start with the fact that nearly all of the Republicans voted to reduce the interest rate on new loans last summer. This bill picks up exactly the same (interest rate) numbers they voted for and says let's use this to refinance all loans. The Republicans have already voted to say an interest rate above the current lending rate is too high, so what about the $1.2 trillion that is outstanding?" Warren said. "If the Republicans feel like it's more important to keep the tax loopholes open, then they are making their values very clear, and that will be a sharp difference between the two parties."

Read the full article on the Springfield Republican website here