Sen. Warren Joins Colleagues to Address College Affordability
Urges Congress to Refinance Student Loan Debt in Floor Speech
Washington, DC - In a floor speech this morning, United States Senator Elizabeth Warren joined Senators Dick Durbin (D-Ill.), Jack Reed (D-R.I.), and Kirsten Gillibrand (D-N.Y.) on the floor of the Senate to address college affordability. Senator Warren spoke about her plan to introduce legislation that would allow student borrowers to refinance their old, high-interest rate loans at the lower rates that are being offered to new student loan borrowers this year under the new Bipartisan Student Loan Certainty Act of 2013.
A graduate who took out an unsubsidized loan before July 1 of last year is locked into an interest rate of nearly 7 percent. Older loans run 8%, 9% and higher. "Refinancing those old loans would lower interest rates to 3.86% for undergraduate loans," Senator Warren said. "This is real money back in the pockets of people who invested in their education. Real money that will help young people find a little more financial stability as they work hard to build their futures. Real money that says that America invests in those who work to get an education."
The senator discussed how the government could pay for refinancing by closing tax loopholes for the wealthiest individuals and corporations. "Right now, this country essentially taxes students - by charging high interest rates that bring money into the government - while at the same time we give away far more money through a tax code riddled with loopholes and let the wealthiest individuals and corporations avoid paying a fair share," Senator Warren said. "We can close those loopholes and put the money directly into refinancing student loans."
"We can start with the Buffett Rule-a rule that would limit tax loopholes for the wealthy and ensure that billionaires pay at least as much as their secretaries. For every new dollar we bring in by stitching up this loophole, it can go directly to lowering the cost of student loans."
Senator Warren highlighted the $1.2 trillion in total national student loan debt that is burying graduates, preventing young people from buying homes and cars, and putting a drag on economic growth. "Tying students to a lifetime of financial servitude as a condition of getting an education does not reflect our values," she said. "These students didn't go to the mall and run up charges on a credit card. They worked hard and learned new skills that will benefit this country and help us build a stronger middle class and a stronger America. They deserve our support. They don't deserve to be buried in debt."