Courtesy of Pam Martens.
Senator Elizabeth Warren Speaks at a Press Conference to Address the Crisis in Student Debt
By Pam Martens: June 14, 2013
MIT’s President is supporting the plan, but it doesn’t take rocket scientists to understand the crisis. On July 1, if Congress does nothing between now and then, the interest rate charged on subsidized Stafford loans to college students will double from 3.4 percent to 6.8 percent.
On May 8 of this year, Senator Elizabeth Warren introduced her first piece of legislation, the Bank on Students Loan Fairness Act, which would allow students to borrow at the same interest rate on their student loans from the government as big banks pay when they borrow from the Federal Reserve’s discount window – a rate currently set at .75 percent. The rate would last for one year to allow Congress to enact a long term solution. Congressman John Tierney introduced a corresponding bill in the House of Representatives.
Fifteen organizations have signed on as supporters to the plan, including the American Association of University Professors, the American Federation of Teachers, the National Organization for Women and the United States Student Association. Two organizations have received over 1 million signatures on their online petitions: the Progressive Change Campaign petition has garnered 623,595 signers as of this morning while the Move On petition has collected 442,220.
In announcing the plan, Warren called the rise in student debt, now over $1 trillion, “a risk to household spending” and a “threat to middle class stability” saying that together it was threatening economic recovery. Add a tepid job market for new graduates and the dangers broaden.
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