Elizabeth Warren: Students should get the same loan rate as big banks

Sen. Elizabeth Warren introduced her first bill, a simple proposal to give students the same loan rates as the nation's biggest banks. Her proposal would allow the cut-rate loans for students for one year, to give Congress the time to come to agreement on a long-term solution to interest rates. Federal Stafford subsidized loan rates for new students are set to double on July 1 to 6.8 percent.

Here's a snippet from her floor speech introducing the bill.

“Some people say that we can’t afford to help our kids through school by keeping student loan interest rates low,” said Senator Warren. “But right now, as I speak, the federal government offers far lower interest rates on loans, every single day–they just don’t do it for everyone. Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about 0.75%. But this summer a student who is trying to get a loan to go to college will pay almost 7%. 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. That isn’t right. And that is why I’m introducing legislation today to give students the same deal that we give to the big banks.”

“Big banks get a great deal when they borrow money from the Fed,” Senator Warren continued. “In effect, the American taxpayer is investing in those banks. We should make the same kind of investment in our young people who are trying to get an education. Lend them the money and make them to pay it back, but give our kids a break on the interest they pay. Let’s Bank on Students… Unlike the big banks, students don’t have armies of lobbyists and lawyers. They have only their voices. And they call on us to do what is right.”

Sen. Warren is selling herself a little short, there. Students don't just have their voices. They have Elizabeth Warren's voice, too. That's a damned good thing.