Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

News & Politics News & Politics

Offer college students the same interest rates as banks

Posted by on May. 8, 2013 at 11:10 PM
  • 29 Replies
1 mom liked this


Sen. Elizabeth Warren (D-MA) introduced a bill on Wednesday that would give college students the same interest rates on their federal student loans as banks do when borrowing from the Federal Reserve.

“If the Federal Reserve can float trillions of dollars to large financial institutions at low interest rates to grow the economy, surely they can float the Department of Education the money to fund our students, keep us competitive, and grow our middle class,” Warren said.

According to The Hill, the Students Loan Fairness Act would call for the Fed to “float the money” to the department for one year, giving Congress enough time to enact a long-term agreement on student loan rates.



“Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about .75 percent,” Warren said. “But this summer a student who is trying to get a loan to go to college will pay almost 7 percent. In other words, the federal government is going to charge students interest rates that are nine times higher than the rates for the biggest banks–the same banks that destroyed millions of jobs and nearly broke this economy. That isn’t right.”

On July 1, Federal Stafford subsidized loan rates for incoming students will double to 6.8 percent, which she said would only increase pressure on them.

“Keep in mind, these young people didn’t go to the mall and run up charges on a credit card,” Warren said. “They worked hard, they stayed in class, they learned new skills and they borrowed what they needed to pay for an education.”

Watch Warren make her proposal, as posted on her official YouTube channel on Wednesday, below.

by on May. 8, 2013 at 11:10 PM
Add your quick reply below:
You must be a member to reply to this post.
Replies (1-10):
autodidact
by Silver Member on May. 9, 2013 at 1:36 AM

nanaofsix531
by Platinum Member on May. 9, 2013 at 9:16 AM

Banks own the congress.I doubt it will ever happen.

jcrew6
by Jenney on May. 9, 2013 at 9:34 AM
2 moms liked this

Did you all even read this? It's only for a  year.  Hmmmmm, I'm think a politician is looking to boost the college student vote for their party.   This isn't a long term fix.  It's buying votes.  

JanuaryBaby06
by on May. 9, 2013 at 2:27 PM
Not a long term fix but it would be a great help to many for as long as they are able to use it :D
itsmesteph11
by Silver Member on May. 9, 2013 at 2:37 PM
2 moms liked this

 Peachy, that's great for a few but unfortunately that isn't going to solve the problem.   The cost of a college education is what needs to change. The system needs to change not the interest rate. People should be up in arms at how much Professors and others running these colleges get paid and how the whole system is run. They are probably worse than wallstreet and definately just as enwtined with the government. 

itsmesteph11
by Silver Member on May. 9, 2013 at 2:40 PM
2 moms liked this

 Banks have nothing to do with this. While they may be administered by certain banks all loans go through the government now.  Most of these loans now belong to Sally Mae Government.

Quoting nanaofsix531:

Banks own the congress.I doubt it will ever happen.

 

MsDenuninani
by Bronze Member on May. 9, 2013 at 2:46 PM

While I love the idea of making it easier for students to pay for college, I'm also worried that low interest student loans will just increase tuition at these schools.

If students are able to borrow money virtually interest free to pay for it, there will be even fewer incentives for colleges to lower their costs.

Clairwil
by Gold Member on May. 9, 2013 at 3:43 PM
Quoting -Celestial-:

But this summer a student who is trying to get a loan to go to college will pay almost 7 percent.

My immediate thought was, in this financial climate: "what a rip off"

But then I had a second thought: what's the rate of people defaulting and not paying back their student loans?

pj2becca21
by Bronze Member on May. 9, 2013 at 3:54 PM

And that is why I stopped going!!! or try my hardest to get into a big name university! I work on paying bills and not being homeless 

grandmab125
by on May. 9, 2013 at 5:11 PM
1 mom liked this

 Student loans.....the new "housing bubble", that will leave the taxpayers on the hook for loans people can't pay back.....Every time the gov't makes more money available for upper ed through grants and loans, colleges raise their tuition, housing, etc.  Then they build outrageously huge sports stadiums, spas so those poor over worked kids can relax, etc.

Add your quick reply below:
You must be a member to reply to this post.
Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)