As a recent study indicates that college and universities are giving financial aid to rich students at the expense of poor ones Senator Elizabeth Warren is offering a bill to bring student debt relief. Warren says students should get the same rates as Wall Street.
Sen. Elizabeth Warren introduced her first standalone piece of legislation Wednesday, calling for the government to give student borrowers the same deal it gives big banks when they need a loan.
The measure would allow students who are eligible for federally subsidized Stafford loans to borrow at the same rate that banks get from the Federal Reserve when they need a short-term infusion of cash from the central bank’s discount window.
Warren’s bill, the Bank on Students Loan Fairness Act, would allow students in need of loans to receive the same favorable rate that the bailed out banks receive.
“If the Federal Reserve can float trillions of dollars to large financial institutions at low interest rates to grow the economy, surely they can float the Department of Education the money to fund our students, keep us competitive, and grow our middle class,” Warren (D-Mass.) said on the floor of the Senate Wednesday…
She noted that large banks can currently borrow from the Fed’s discount window at a rate of about 0.75 percent, but if the rate for new Stafford loans increases — as it is set to do on July 1 — a student borrower seeking a loan this summer will pay almost 7 percent.
“In other words, the federal government is going to charge students interest rates that are nine times higher than the rates for the biggest banks — the same banks that destroyed millions of jobs and nearly broke this economy,” she said. “That isn’t right.”
And given that Wall Street mostly engages in “socially useless activity” in stewing in its corrupt vortex of gambling and rentier capitalism it would seem that if anyone should be getting preferential loans from the government it should be students not banksters. In any case, it is good (if not surprising) to see someone in Washington thinking about the 99%.
Let’s keep track of this bill, the votes will be revealing.