(Credit: Tim Pierce, original photo)
Sen. Elizabeth Warren is once again taking on college affordability. Her latest effort would allow students to refinance their college loans the same way you might refinance your mortgage or car payments.
Many young adults are paying as much as 7 percent interest on those government loans that helped them pay for college. And their total debt often runs in the tens of thousands of dollars. Warren continues to focus on the problem and this week proposed legislation to address it.
“Legislation that will allow eligible borrowers with high-interest loans to refinance at interest rates that are at least as low as those currently being offered to new borrowers in the federal student loan program,” she said.
Those new borrowers, who got their loans after July 1, are only paying 4 percent after Congress lowered the rate last year. But those who borrowed before that deadline are stuck paying more.
And on Boston Public Radio Thursday, Warren urged Congress to fix that and give students and their families a break.
"We’ve got a problem here and basically the response of many in Congress right now is, ‘La, la, la, I can't hear you, I don't want to talk about this problem.’" she said. "And you know why?"
The answer, says Warren, is that the government makes a lot of money off student debt. To cover the difference, she says Congress should enact the so-called "Buffet Rule," which would eliminate tax loopholes for the wealthy.
“Every penny that comes in from that goes directly to reducing the interest and cost on our student loan debt,” she said.
With Congress gridlocked on the tax loophole issue, though, it may be unrealistic to think that Warren’s bill will draw enough support to pass any time soon.