Elizabeth Warren Blasts Republicans for Letting Student Loan Interest Rates Double

Rates on subsidized Stafford loans doubled on July 1.

July 17, 2013— -- Senator Elizabeth Warren (D-Mass.) blasted Republicans for "filibustering" attempts to keep student loan interest rates from rising at the Center for American Progress youth summit on Wednesday morning.

"It is wrong," she said, "to make a bigger investment in our banks than in our students."

Interest rates on subsidized Stafford loans doubled to 6.8 percent on July 1. Congress can undo that by passing a bill that would retroactively prevent the increase, but they can't agree on a plan.

Warren has backed a plan that would let students borrow from the government at the same rate as big banks for a year. The government lets banks borrow money at less than one percent interest. Students, she said, should be able to do the same.

Lawmakers should try "to help former students deal with a trillion dollars in existing student loan debt by helping them refinance their loans at fair and reasonable rates," she said.

She criticized the fact that the government makes a profit on student loans.

"That is wrong," she said. "It is more than wrong. That is obscene. The government should not be making profits off the backs of our students, period."

Warren pointed out that young people are buying houses at lower rates, more are moving back in with their parents after graduation, and everything from marriage to saving for retirement is delayed as young people try to pay off their debt.

Don't blame Congress for the problem, though, she said. Blame Republicans for trying to "make money off of students."

Both Republicans and Democrats said they wanted to prevent interest loan rates from doubling. Democrats proposed closing tax loopholes for big corporations and keeping interest rates at 3.4 percent. They've also both proposed, at various times, letting the market determine interest rates, a plan the president supported. But President Obama threatened to veto a plan passed by the Republican-controlled House because it didn't lock in interest rates over the life of each loan.

In other words, they have the same end goal - avoid a straight 6.4 percent interest rate for Stafford loans - but they can't agree on how to get there.

"People say it's just too expensive," Warren said. "I think that's just completely wrong."

The government needs to invest in students, she said, because it will help them get an education, get good jobs and grow the economy.

"Your education strengthens our economy," she said.

It's going to be difficult, she acknowledged, because young people don't have the "army of lawyers" that big banks and corporations have to lobby the government. But that doesn't mean students should sit by and be complacent.

"We have us," she said. "We have our voices, we have our energy, we have or willingness to get out there and fight."

"Because this is what it takes," she continued. "If we want to make progress, we have to get out there and fight."