May 11, 2013
To the Seniors of the Class of 2013
Make Sure Your Commencement Ceremony Helps to Pass Senator Elizabeth Warren’s Bank on Students Bill!As every college student knows, the crushing burden of student loan debt poses the single greatest obstacle to anyone seeking a good education. An undergraduate degree frequently means $30,000-$50,000 and up in debt. An advanced degree starts at twice that, and medical and law degrees can saddle the student with six figures of loans. For the nation as a whole, student loan debt is a social crisis set to exceed $1 trillion. Interest rates vary, but they are always far too high for young people starting out in life, or for anyone else. And things are scheduled to get worse, with the interest rate on one key type of student loan set to double from 3.4% to 6.8% on July 1. A whole generation of young people is being forced to put their lives on hold, prevented by high interest debt from continuing their schooling, from renting or buying a home, from getting married and having children. This is simply intolerable.
At the same time, Wall Street banks can borrow from the Federal Reserve Discount Window for a mere 0.75%. That’s right — just three quarters of 1%. Why should students be crushed when the bankers who caused the present economic crisis with their wild and irresponsible derivatives speculation get a sweetheart deal?
Fortunately, Massachusetts Senator Elizabeth Warren has now offered a bill which would force the Federal Reserve to fund federal Stafford loans through the US Department of Education at an annual interest rate of just 0.75% — the discount rate the Fed offers banks. Do the arithmetic and you can easily figure out how much interest this bill will save you every year. But this bill faces an uphill battle to become law, since it is likely to be opposed by Wall Street lobbyists, the congressional leadership of both parties, and by the Obama White House. The only hope for the Warren bill lies in a massive outpouring of support, starting with the graduation ceremonies of the class of 2013. That means a big part of your economic destiny is now in your hands.
Graduation ceremonies are often marked by boring platitudes from overpaid and cynical celebrities. But now you can use your graduation day as a springboard to cutting your monthly loan payment.