On May 8, Sen. Elizabeth Warren (D-Mass.) introduced her bill since becoming Senator in January to the surprise of many as it did not have a direct effect on Wall Street and big banks which she has been outspoken about since taking office.
Instead, her first bill is to improve the education system by decreasing the student loan interest rates to the levels currently offered by the Federal Reserve to big banks according to the Huffington Post.
Warren was interviewed by CNN on May 9 as the main story for CNN’s The Money Lead. The first question she was asked, was why the significance of dropping the loan to .75 percent instead of 1 percent, which would already be a major decrease from the expected 3.4 percent?
Warren responded, “Well look, the bottom line is everyday the United States government lends money to big financial institutions. They’ve been doing it for years now. They’ve been doing it at about three-quarters of one percent that’s been the interest rate. We have students who are out there who have been borrowing money to get an education, working hard. My view is if the American taxpayer is going to invest in those big financial institutions by giving them a great deal on their interest rate let’s invest in those students by giving them the same deal.”
This proposed bill could be beneficial to Indian country, as Mark Trahant has pointed out in his sequester coverage, the Bureau of Indian Education is considering a $1,700 student fee increase to help make up the funding gap left across the tribal university land scape following the sequester. As Trahant also pointed out in January, many Native students attend tribal colleges because they are often the only affordable higher education opportunity for some students. With an interest rate below one percent, options could start to appear in other areas. (Related story: Sequester Will Rip Apart Higher Education in Indian Country)
Some have said the comparison between student loans and bank loans is similar to apples to oranges. Warren addresses this issue in the video, which can be seen below.