Senator Elizabeth Warren
The Senate could vote as early as today on a bill that would allow student loan interest rates to rise sharply within a few years.
Negotiations are underway after the interest rate on federally-subsidized loans rose on July 1 from 3.4 percent to 6.8 percent. Some lawmakers have been urging action to bring that interest rate back down to 3.4 percent. In a statement on the Senate floor on July 19, Senator Elizabeth Warren (D- MA), noted that the federal government stands to make $184 billion in profit on student loans over the next decade; Senator Warren charged that this profit-making "on the backs of students" is "obscene." She laid out three goals for future legislation on this issue: (1) eliminate government profits on student loans; (2) refinance existing student debt; and (3) bring down the cost of a college education in this country.
Senator Warren's Republican colleagues take a very different view; a Republican-sponsored bill, she noted, would add an additional $16 billion in government profit to the already-projected $184 billion in profit over the next decade.
Lawmakers may vote today on legislation that would lower interest rates in the near term but allow them to rise in the future – to as high as 8.25 percent for undergraduates and 9.5 percent for graduate students, based on changes in market interest rates. Got something to say about what lawmakers should do? Contact your senators and tell them what you think, and leave a comment on our Facebook page.