The Whole System Stinks, By Elizabeth Warren
http://m.elizabethwarren.com/blog/the-whole-system-stinksThe whole system stinks
July 23, 2013 | By Elizabeth Warren
I’ve spent years fighting back against credit card companies that put out zero-interest teaser rate cards, planning to jack up the price later and make all their profits in the fine print.
I also fought back against teaser rate mortgages that promised low payments in the first few years, but then shot up to rates that pushed millions of families into foreclosure.
So it’s shocking to me that the United States Senate would offer its own teaser rate for our student loan system -- a system that is scheduled to make more than $184 billion in profits over the next ten years. That's not the business the United States government should be in.
Speak out right now to make sure the Senate doesn't pass a deal that would let federal student loans go even higher than their current 6.8% rate.
We had a majority in the Senate to keep student interest rates low, but because of Republican filibusters, the interest rate on federally subsidized student loans jumped from 3.4% to 6.8% on July 1st. Instead of restoring that 3.4% rate, a new so-called "compromise" plan on the table raises the interest rate on those loans this year to 3.86% for undergraduate students, and 5.41% for graduate students in 2013.
And then it gets worse. The plan is set up to collect higher interest rates in future years. After just 24 months, the rate jumps above 6.8% for graduate students. Within a few years, rates for all loans will be higher than if Congress does nothing -- and some could climb as high as 10.5%. Even worse, with the federal government already making billions in profits off these programs, the "compromise" plan is set up to actually increase those profits by hundreds of millions of dollars more.
I can't support a proposal that squeezes even more profits out of our kids, while millionaires and billionaires still don't pay their fair share. This is a bad deal.
Senator Jack Reed has offered an amendment that is a true compromise: let rates move with the market, but set a cap on student loan interest rates at their current rates. I am proud to cosponsor that amendment. It's the only way to ensure that students don't end up paying more than they would if Congress does nothing.
The Senate will vote on the compromise bill as early as today. Please speak out now and demand support for Senator Reed's student loan amendment.
In the end, this is a simple math problem.
If Republicans insist that we continue to make the same $184 billion in profit off of the student loan program, that just means that students in future years will have to pay higher rates to make up the difference.
I don't believe in pitting our kids against each other. In fact, I think this whole system stinks.
We should not go along with any plan that demands that our students continue to produce huge profits for our government. Making billions and billions in profits off the backs of students is obscene.
Senator Jack Reed's amendment is the only plan on the table right now that guarantees student loan interest rates won't skyrocket above their current levels. We need to pass this amendment for our kids and grandkids.
Sign up now to support Senator Reed's amendment.
http://m.jackreed2014.com/act/do-no-harm?sc=warren
I appreciate the hard work that my colleagues have done to try to defeat the Republican filibuster so that we can keep student loan rates low.
But our students are drowning under a trillion dollars in student loan debt. We need to start now with one basic principle: cut government profits on student loans. I can't support a deal that actually increases those profits.
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On the positive side...
I am so glad she is a senator.
Thank You Massachusetts!
in the New Jersey Democratic primary to be held in mid-August.
Support Rush in his underdog bid to beat "Wall St Booker" in the NJ Dem primary!
See more at: http://www.northjersey.com/news/216516931_Rush_Holt__I_d_be_a__one-of-a-kind__senator.html#sthash.WFeMPY5B.dpuf
When the Democratic Wing has to frame "Victory" as keeping interest rates on Student Loans from going even HIGHER,
then we are really screwed.
This is also Machiavellian.
Want to make people happy with 6.8%?
...just tell them its going much higher,
then step in a Save Them from 15%.
In the 50s, 60s, and 70s,
when Taxes on the RICHEST Americans were between 70% - 90% (set by a Republican),
ANYBODY could attend the State University
and graduate [font size=3]DEBT FREE[/font]
if he/she was willing to work a Part Time job.
Really frugal students could also afford to own and drive a Beater.
This was The NORM, NOT the exception.
We could have that again,
IF we had a Political Party that represented the Working Class.
Higher Education has been turned into Just Another SCAM
to enrich the 1% by the NeoLiberal "Free Market" Con Men disguised as politicians in BOTH Parties.
FDR's State of the Union Address contained a section named "The Economic Bill of Rights".
In this section, FDR specified "EDUCATION" as a Basic Human Right to be protected by our Government of the People,
[font size=3]and NOT as a Commodity to be SOLD to Americans who can afford it by For Profit Corporations!!!![/font]
There was a time, not so long ago, when voting FOR the Democrat,
was voting FOR the above Basic Human Right (Education).
Sadly, this is no longer true.
...how FAR we have fallen.
[font color=firebrick][center]"There are forces within the Democratic Party who want us to sound like kinder, gentler Republicans.
I want a party that will STAND UP for Working Americans."
---Paul Wellstone [/font][/center] [center]
[center] [/font]
[font size=1]photo by bvar22
Shortly before Sen Wellstone was killed[/center][/font]
You will know them by their [font size=3]WORKS.[/font]
The whole student loan system is completely screwed up. What is wrong with it is worthy of its own OP, and maybe I'll find time next week to share my self-perceived wisdom on the matter 
The short version is that the rules around student loans and education financing in general have created some of the mothers of all unintended consequences - runaway tuition increases. By letting students take out almost unlimited amounts of loans, and keeping the rates artificially low AND making it near impossible for those students to get out from under that debt through bankruptcy, you have opened up the floodgates of money to higher education. There is little incentive for schools to control tuition since demand is inelastic; meanwhile, the students are getting royally screwed because most of them have poor judgement when it comes to finances and all of them think that they are going to be great successes (as they should).
I'm all for fully funding education at all levels, but the way we have done it stinks to high heaven.
She has, and brings, the goods. Others pale...
I like that idea! 
