90.9 WBUR - Boston's NPR news station
Top Stories:
PLEDGE NOW
Sen. Elizabeth Warren: ‘Student Loan Debt Is Dragging Down The Whole Economy’
Sen. Elizabeth Warren, D-Mass., center, joined by other women of the Senate, prepares for a news conference on her bill, the Bank on Students Emergency Loan Refinancing Act, that would allow people with outstanding student loan debt to refinance at the lower interest rates currently offered to new borrowers, at the Capitol in Washington, Wednesday, June 4, 2014. (AP)

Sen. Elizabeth Warren, D-Mass., center, joined by other women of the Senate, prepares for a news conference on her bill, the Bank on Students Emergency Loan Refinancing Act, that would allow people with outstanding student loan debt to refinance at the lower interest rates currently offered to new borrowers, at the Capitol in Washington, Wednesday, June 4, 2014. (AP)

As President Barack Obama weighs in on college costs in a first-ever Presidential Tumblr chat Tuesday afternoon, U.S. Senator Elizabeth Warren (D-MA) is trying to push a new bill that supporters argue would change the scale and shape of student loan debt in America.

She joined us Tuesday morning to explain her bill, her choice of interest rates and why the politics of the proposal shouldn’t be in question.

“It’s a pretty simple proposal,” Sen. Warren told us. “It says that for all those people who have outstanding student loan debt — some of it’s at six percent, eight percent and even higher, depending on when you took those loans out — we propose to refinance it down to the current rates for new borrowers, that’s 3.86% for undergraduate loans…and basically do for student loan borrowers what homeowners have all done: refinance down in a current interest rate environment.”

Sen. Warren plans to pay for the loan adjustment process by putting in what she calls a “minimum tax.”

“People who are earning more than a million dollars a year in adjusted income would have to pay a minimum tax of about 30%,” Sen. Warren said.

And the rate adjustment continues to allow student loans to provide a profit source for the Federal Government, Sen. Warren said.

“Even at 3.86%, the United States government will still make a profit on student loans” Sen. Warren. “It will just be much, much smaller than the profit it makes now…I think it is obscene that the United States government is making billions of dollars off the backs of people who just tried to get an education and who weren’t fortunate to be born into families were daddy could write a check for the cost of college but had to borrow money in order to get their education.”

Plus, the Senator noted, as the economic debate on Capitol Hill continues to swirl around different proposals for a larger economic boost, changing the student loan system to benefit loan recipients could dramatically shift larger economic concerns the nation over.

“Student loan debt is dragging down the whole economy,” Sen. Warren said. “Young people can’t buy homes, can’t start small businesses, can’t buy cars, can’t take the economic steps that are not just good for themselves individually but good for the economy overall.”

What do you think of Sen. Warren’s proposal? Is it the right way to tweak the student loan problem in America? Or does more need to be done to help students both afford college and afford to pay off their loans after the fact?

Let us know in the comments below, or on Facebook, Tumblr and @OnPointRadio.

 

Please follow our community rules when engaging in comment discussion on this site.
  • frankgado

    Warren is proposing to convert contracts entered into under fixed rates now provide for flexible rates. Would the proposed alteration hold when/if the cost to the government of borrowing money (from the Chinese, no doubt) rises, consequent to the riskiness to the dollar resulting from unsustainable national debt?

    The current problem is the result of good intentions, insufficiently analyzed as to future effects under variable circumstances. Federal largesse in the area of student grants and loans has been a principal cause of accelerating the cost, and eroding the quality,m of college education.

  • Duras

    Student loans are a way of taxing working Americans. This is how republicans tax working people: interest rates on student loans. This is a backward attempt at funding the government. It promotes unequal opportunity and a nation of debtors.

    In fact, socialism is industry by government, and republicans have turned the university system into a for-profit industry for the government. If you tax the wealthy and provide a free college education, you are promoting equal opportunity and establishing the necessary public institutions Adam Smith advised in “Wealth of Nations.”

ONPOINT
TODAY
Jul 31, 2014
Russian President Vladimir Putin heads the Cabinet meeting in the Novo-Ogaryovo residence, outside Moscow, Russia, Wednesday, July 30, 2014.  (AP)

The US and Europe face off against Russia. Are we looking at Cold War II? Something hotter?

Jul 31, 2014
A comical sign suggest the modern workplace is anything but collegial . (KW Reinsch / Flickr)

When the boss is a bad apple. How some pretty dark traits can push some to the top.

RECENT
SHOWS
Jul 30, 2014
Janitta Swain, Writer/Exec. Producer/Co-Director Dinesh D'Souza, John Koopman, Caroline Granger and Don Taylor seen at the World Premiere of 'America: Imagine The World Without Her' at Regal Cinemas LA Live on Monday, June 30, 2014, in Los Angeles, CA. (AP)

Conservative firebrand Dinesh D’Souza says he wants an America without apologies. He’s also facing jail time. We’ll hear him out.

 
Jul 30, 2014
Smoke and fire from the explosion of an Israeli strike rises over Gaza City, Tuesday, July 29, 2014. Israel escalated its military campaign against Hamas on Tuesday, striking symbols of the group's control in Gaza and firing tank shells that shut down the strip's only power plant in the heaviest bombardment in the fighting so far. (AP)

Social media is changing how the world sees and talks about Israel and Gaza, Israelis and Palestinians. We’ll look at the impact.

On Point Blog
On Point Blog
Criticism, Conservatism And Dinesh D’Souza
Thursday, Jul 31, 2014

Best-selling conservative author and filmmaker Dinesh D’Souza and On Point host Tom Ashbrook disagree about what makes America great…or do they?

More »
1 Comment
 
This 15-Year-Old Caller Is Really Disappointed With Congress
Tuesday, Jul 29, 2014

In which a 15-year-old caller from Nashville expertly and elegantly analyzes our bickering, mostly ineffective 113th Congress.

More »
6 Comments
 
Our Week In The Web: July 25, 2014
Friday, Jul 25, 2014

Why the key to web victory is often taking a break and looking around, and more pie for your viewing (not eating) pleasure.

More »
Comment