30 Sep Student Loan Reform – Ten Things You Should Know
Student Loan Reform – The Next Chapter
Senator Warren is now blazing a path as a student financial aid advocate. Her biggest goal – refinance the student loans of 25 million borrowers and pay for it with a tax increase on millionaires. Not all student loan borrowers will be candidates for President Obama’s initiatives which is where Senator Warren stepped in and proposed legislation to allow borrowers with older loans to refinance at today’s lower interest rates. This concept would save older student loan borrowers thousands over the life of their loans and lower monthly payments. Naturally, the Democrat/Republican he said, she said began. Republicans accused Democrats of using the student loan debate as a November election tactic, and the Democrats accused Republicans of ignoring students in favor of the wealthy. If BRAVO is looking for a new reality show, it may have found its next cast.
Who will come to the aid of Senator Warren? It appears President Obama has her back and wants current students, graduates, and parents to watch how steadfastly Republicans oppose the Warren legislation. Republican lawmakers’ actions support wealthy Americans and corporations yet not middle-class students working hard to get an education. Mr. Obama urges American citizens to pay close attention to how senators vote on the Warren financial aid reform bill and allow that behavior to dictate mid-term election voting in November. President Obama drew a clear line that either senators will vote in favor of lower tax bills for millionaires or lower student loan bills for the middle class. He feels it should be a “no-brainer.”
Millionaires, 1 – Students, 0
In 2013 Congress and the president were able to find common ground when lowering future student loan interest rates to 3.86%, so why not come together again and allow previous cash-strapped college graduates to refinance to the same interest rate? It comes down to political self-interest and, more specifically, money. Republican candidates are often backed by big business and the conservative wealthy. Voting in favor of the Warren legislation would mean biting the hands that feed Republican candidates just months before the November mid-term elections. And so the gauntlet was thrown.
“With this vote, we show the American people who we work for in the United States Senate: billionaires or students,” Elizabeth Warren said on the Senate floor before voting began on June 11th 2014.
Once votes were cast, the Warren legislation died at 56-38 failing to get the 60 votes it needed to move forward. While simply a political battle on the surface, this entire student debt reformation signals some very concerning deeper issues – namely a struggling economy. With college graduates left unemployed and burdened by over one trillion dollars in student loan debt, there is no argument that future economic growth in the United States will be hindered.
The Warren bill was a longshot, but the good news is that the political conversation is turning to the issue of student loan debt and is shining a spotlight into who truly benefits from current legislation. To the credit of the Republican Party, Warren’s bill did nothing to lower the skyrocketing costs of getting a higher education in the first place. The conservative claim that Democrats were using the bill to fuel mid-term voter goodwill may also not be too far off.
Elizabeth Warren is not giving up on this bill and plans to reintroduce it again in the future. She hopes for more bipartisan support in the future but with only three Republicans voting to support it in the last vote, she may have a lot of ground to gain.