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The Whole System Stinks

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opednews.com Headlined to H2 7/23/13

Source: ElizabethWarren.com


I've spent years fighting back against credit card companies that put out zero-interest teaser rate cards, planning to jack up the price later and make all their profits in the fine print.

I also fought back against teaser rate mortgages that promised low payments in the first few years, but then shot up to rates that pushed millions of families into foreclosure.

So it's shocking to me that the United States Senate would offer its own teaser rate for our student loan system -- a system that is scheduled to make more than $184 billion in profits over the next ten years. That's not the business the United States government should be in.

We had a majority in the Senate to keep student interest rates low, but because of Republican filibusters, the interest rate on federally subsidized student loans jumped from 3.4% to 6.8% on July 1st. Instead of restoring that 3.4% rate, a new so-called "compromise" plan on the table raises the interest rate on those loans this year to 3.86% for undergraduate students, and 5.41% for graduate students in 2013.

And then it gets worse. The plan is set up to collect higher interest rates in future years. After just 24 months, the rate jumps above 6.8% for graduate students. Within a few years, rates for all loans will be higher than if Congress does nothing -- and some could climb as high as 10.5%. Even worse, with the federal government already making billions in profits off these programs, the "compromise" plan is set up to actually increase those profits by hundreds of millions of dollars more.

I can't support a proposal that squeezes even more profits out of our kids, while millionaires and billionaires still don't pay their fair share. This is a bad deal.

Senator Jack Reed has offered an amendment that is a true compromise: let rates move with the market, but set a cap on student loan interest rates at their current rates. I am proud to cosponsor that amendment. It's the only way to ensure that students don't end up paying more than they would if Congress does nothing.

In the end, this is a simple math problem.

If Republicans insist that we continue to make the same $184 billion in profit off of the student loan program, that just means that students in future years will have to pay higher rates to make up the difference.

I don't believe in pitting our kids against each other. In fact, I think this whole system stinks.

We should not go along with any plan that demands that our students continue to produce huge profits for our government. Making billions and billions in profits off the backs of students is obscene.

Senator Jack Reed's amendment is the only plan on the table right now that guarantees student loan interest rates won't skyrocket above their current levels. We need to pass this amendment for our kids and grandkids.

I appreciate the hard work that my colleagues have done to try to defeat the Republican filibuster so that we can keep student loan rates low.

But our students are drowning under a trillion dollars in student loan debt. We need to start now with one basic principle: cut government profits on student loans. I can't support a deal that actually increases those profits

 

Elizabeth Warren was assistant to the president and a special adviser to the Treasury secretary on the Consumer Financial Protection Bureau. She single-handedly set us this bureau, putting in place the building blocks for an agency that will make (more...)
 

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Support Ending Their Federal Reserve System An Exc... by Lance Ciepiela on Tuesday, Jul 23, 2013 at 6:46:13 PM
How can we possibly get the bankers to behave, whe... by Tom Harner on Tuesday, Jul 23, 2013 at 8:35:21 PM
Firstly, it increases the income and wealth dispar... by Paul Repstock on Tuesday, Jul 23, 2013 at 8:35:32 PM
it all. She would have never gotten elected to any... by Ad Du on Wednesday, Jul 24, 2013 at 3:11:48 PM
I understand why you are fighting to keep interest... by E. J. N. on Tuesday, Jul 23, 2013 at 8:42:49 PM
Organized greed is indeed the problem.... by Bob Gormley on Tuesday, Jul 23, 2013 at 8:56:03 PM
It's important to take note of who is blocking suc... by Philip Zack on Tuesday, Jul 23, 2013 at 9:09:55 PM
what the hell is our country doing about the futur... by Dean Libey on Tuesday, Jul 23, 2013 at 9:12:53 PM
Lies, Lies and More Lies by unk... by Deborah Dills on Tuesday, Jul 23, 2013 at 10:08:41 PM
Yes, all true. But worse is th... by Herbert Calhoun on Wednesday, Jul 24, 2013 at 8:34:37 AM
It's called REVOLUTION, put it the way you put it ... by Guglielmo Tell on Wednesday, Jul 24, 2013 at 11:22:20 AM