southcoasttoday.com - Senate Democrats Highlight College Debt Issue

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By Peter Urban

Americans should "feel the shame" of saddling recent college graduates with billions of dollars in high-interest student loans that are generating profits for the federal government at the expense of the general economy, said Sen. Elizabeth Warren, D-Mass.

Warren, who has proposed legislation to lower federally-mandated interest rates on student loans, spoke at a hearing organized by fellow Senate Democrats to draw attention to the college debt issue. The all-Democrat event included testimony from three recent graduates now facing high monthly loan bills.

"When we short change their education, when we yolk them to 20 years or more of debt repayment, and when we make a profit off those debts -- then we have failed as a country in one of our most important obligations. We have failed to invest in the future of our young people and we should feel the shame of that," she said.

Warren noted that nearly a million student-loan borrowers will receive their first bill in November on loans that carry inflated interest rates that make it nearly impossible for anyone just entering the workforce to save. The result, is most will likely delay purchasing a car, a home or saving for retirement.

"Congress set interest rates so high that the government is raking in billions in profits," she said. It is on target to reap $66 billion in profits from the loans it made between 2007 and 2012.

Warren blamed Republicans for blocking legislation she has proposed that would cut the interest rate in half. While the measure wouldn't cure all the problems with high college costs, it would deliver meaningful relief to recent graduates, she said.

Had her legislation been adopted, Warren said the most recent crop of student borrowers -- those who began repaying loans between the summer of 2014 and summer of 2015 -- would have saved $655 million in interest payments in one year.

"For two years now, Democrats have tried to get a bill through that would lower interest rates but as Republicans have filibustered students have paid, and paid, and paid," she said.

Three recent graduates -- from California, Minnesota and Pennsylvania -- told Warren that the lower interest rate would be welcomed.

Jess Sanchez, a fifth-grade teacher in California and single father, said that half of his income goes to repaying some $90,000 in student loans.

"I have not started saving for my retirement," Sanchez said.

Beyond that, he said, that a couple hundred dollars extra a month would allow him to splurge a little at the grocery store and treat his 10-year-old son to his favorite treat.

"I'd buy an extra pack of Oreos," he said. "Little things make the biggest difference."

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