June 07, 2013

Sen. Warren Calls for Action to Prevent Student Loan Interest Rates from Doubling

Criticizes Republicans for Blocking Sensible Legislation to Help Our Students

- In a speech delivered Thursday on the floor of the United States Senate, Senator Elizabeth Warren (D-MA) called on Congress to take action immediately to prevent interest rates on federally subsidized Stafford Loans from doubling on July 1st. Yesterday, Republicans blocked legislation sponsored by Senator Jack Reed (D-RI) and Senator Tom Harkin (D-IA) to maintain interest rates at 3.4 percent for two years, despite a majority of Senators voting in favor of the bill. Video of Senator Warren’s floor speech is available here. The text of her remarks may be found here

“This really is about our values,” said Senator Warren. “Have we become a people who will support our big banks with nearly-free loans, while we crush our kids who are trying to get an education? The student loan program makes obscene profits on the backs of our students. This is morally wrong, and we must put a stop to it.”

Following Republicans' vote to block this sensible legislation, a group of college students joined Senators Warren, Harkin, Reed, and Al Franken (D-MN) at a press conference to talk about how rising interest rates affect young people working hard to get an education. The Senators reiterated their commitment to providing immediate relief for college students and finding a long-term solution to make higher education more affordable for students and families. 

Video of Senator Warren’s remarks at yesterday's press conference is available here.

Last month, Senator Warren introduced the Bank on Students Loan Fairness Act, which would stop student loan interest rates from doubling and allow students to pay the same interest rate on their government loans as big banks. Currently, banks can borrow from the Federal Reserve at the low rate of approximately 0.75 percent. The interest rate on subsidized Stafford Loans is currently 3.4 percent, and will double to 6.8 percent for new loans if Congress fails to act by the end of this month. More than one million people have signed online petitions in support of Senator Warren’s proposal.