On Monday, U.S. Sen. On Saturday, Obama dedicated his weekly address to the topic, hinting that he would take some sort of action to provide relief in the coming week. (AP Photo/Stephan Savoia)
WASHINGTON – With President Barack Obama set to officially endorse Sen. Elizabeth Warren’s Bank on Students Emergency Loan Refinancing Act on Monday, the commander in chief dedicated his weekly address to highlighting the bill and the problem of college debt dragging down the next generation.
“In a 21st century economy, the surest pathway into the middle class is some form of higher education. The unemployment rate for workers with a bachelor’s degree is just 3.3 percent about half what it is for high school graduates,” Obama said in his weekly address. “The typical graduate of a four-year college earns $15,000 more per year than someone with just a high school degree. But at a time when college has never been more important, it’s also never been more expensive.”
College debt in the United States has topped $1.2 trillion, making it the number one source of debt, surpassing credit cards.
Elizabeth Warren is scheduled to join President Barack Obama in the East Room of the White House when he discusses her Bank on Students Emergency Loan Refinancing Act and the issue of crushing college debt
“This is $66 billion on just the loans issued during that period. That is insane,” Warren previously told MassLive. “This (bill) brings that down. Instead of taxing students who can’t afford to pay for college up front, it says we are investing in those students.”
The bill would be paid for by increasing the tax rate paid by the wealthiest Americans by enacting the so-called Buffett Rule.
On Saturday, Obama indicated he was indeed supporting the measure, and alluded that he will be taking action on his own to provide relief sometime this week.
“Just like you can refinance your mortgage at a lower interest rate, this bill would let you refinance your student loans. And we’d pay for it by closing loopholes that allow some millionaires to pay a lower tax rate than the middle class,” Obama said. “That’s the choice that your representatives in Congress will make in the coming weeks protect young people from crushing debt, or protect tax breaks for millionaires. And while Congress decides what it’s going to do, I will keep doing whatever I can without Congress to help responsible young people pay off their loans including new action I will take this week.”
On Monday, Warren and U.S. Congressman John Tierney, D-Mass., are set to join Obama in the East Room of the White House when he discusses the bill and the issue of crushing college debt. Tierney has introduced to the U.S. House a companion bill to Warren’s legislation, and this week, dozens of organizations came out in support of the measure.
“The promise of a college education shouldn’t be accompanied by the hopelessness from overwhelming debt,” Markey said in a statement. “I thank Senator Warren for her leadership on this important issue, and will work with her and all of my Senate colleagues to support greater access to higher education and to make college more affordable.”
Without Republican support, which the legislation currently lacks, the chances of the bill avoiding a filibuster in the Senate or passing in the House are indeed slim. But with mid-term elections coming in November, this week’s scheduled vote gives Democrats an opportunity to place Republicans on the unpopular side of an issue.
In proposing the bill, Warren pointed to a report released by the Government Accountability Office in January which determined that based on the student loans issued between 2007 and 2012, the federal government stood to profit to the tune of $66 billion from the interest alone
When asked upon intoducing the bill if the political nature of how the mass refinancing would be paid for hurts the bill’s chances of becoming law, Warren said that she crafted the legislation using the same interest rates Republicans voted to approve in the summer of 2013, so a choice would have to be made.
“I start with the fact that nearly all of the Republicans voted to reduce the interest rate on new loans last summer. This bill picks up exactly the same (interest rate) numbers they voted for and says let’s use this to refinance all loans. The Republicans have already voted to say an interest rate above the current lending rate is too high, so what about the cash loan payday Wyoming $1.2 trillion that is outstanding?” Warren said. “If the Republicans feel like it’s more important to keep the tax loopholes open, then they are making their values very clear, and that will be a sharp difference between the two parties.”
