College students taking out new loans in the fall are going to see interest rates double what they were yesterday. Republicans outright refusal to work with Democrats is disconcerting. Elizabeth Warren proposed the Bank on Students Loan Fairness Act. Republicans say the low rates given to banks are different than Student Loans.
Subsidized Stafford Loans went from 3.4% to 6.8%. Government profits from Student Loans range anywhere from $5.5 billion to $36 billion or $.42 cents per dollar loaned, to a little over $.05 cents per every dollar loaned. Either way this was before the increase. Different papers are downplaying the significance, but these loans are typically paid over a long period and put our college students in a hole for quite a few years. Banks pay much lower rates, even after decimating our economy, refusing to give loans and the dirty mortgage practices that come out almost daily, yet Republican lawmakers defend the banks vociferously.
During last years Presidential race both parties vowed to take action on this issue. President Obama wants to offer it at the 10 year treasury rate plus .93% and students can cap their payment at 10% of income. House Republicans want to give a superlow rate and then it would adjust at a later date up to 8.5%, effectively 2 and 1/2 times more than now. Senate Republicans are at about 6.5% and Senate Democrats are offering the governments short term lending rate plus an additional percentage suggested by the Department of Education. Elizabeth Warren’s plan would lend at .75% short term loan rate that banks pay the Federal Reserve. It is only a year long fix.
The real issue here is that Republicans are willing to run students over the coals, while refusing to raise taxes on the wealth and refusing to take measures against banks predatory practices. The hypocrisy of the Republican party comes to the forefront again. Elizabeth Warren was trying to get this done several months ago, apparently Congress can only work on one issue at a time. I guess one issue at a time makes it harder to get a bill to help the people through. Republicans, the party of the wealthy for the wealthy.