Student Loan Debt

Floor Speech

BREAK IN TRANSCRIPT

Ms. WARREN. I thank the Senator from Illinois.

It starts with the premise right where the Senator was, and that is the Federal Government, once upon a time, lent money to our students. My colleague remembers the NDEA loans that went out at 3 percent. The Federal Government was subsidizing those loans, making it easier for students to be able to borrow.

Where we have ended up today is that instead of there, we have students with outstanding student loan debt at 6 percent, at 7 percent, at 8 percent, at 9 percent, and even higher. So this isn't just to cover the cost of the loans. This is double, in some cases, what it takes, triple, in some cases, what it takes to cover the cost of the loans. That means the administrative costs, the bad debt costs--the costs of borrowing the money.

So last summer, we were looking at new student loans that were coming through--the interest rates were about to double--and Congress, Democrats and Republicans, said if the interest rate doubles up to 7 percent, that is too high. So Congress said that for all new borrowers in 2013, the interest rate would be 3.86 percent on undergraduate loans, 5.41 percent on graduate loans, and 6.41 percent for PLUS loans. Make no mistake, the government still makes money--not a lot but the government still makes money on those loans.

What we propose is to take all of the outstanding student loan debt and refinance it at those interest rates--exactly the same rates that virtually every Republican agreed to last summer, many Democrats agreed to last summer, and to say we are going to finance it down. So kids who are trapped in loans at 8 percent, at 9 percent, and even higher will be able to get these lower interest rates on their loans. It will save some people hundreds of dollars a year, it will save some thousands of dollars a year.

We propose to pay for that by enacting the Buffet rule--closing some tax loopholes on millionaires and billionaires--so we can bring down the interest rate for our students.

I yield the floor.

Source