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President Obama supports Senator Elizabeth Warren's student reform bill which could come up for a vote as early as next Wednesday writes Alexandra Jaffe, of The Hill, in Obama rallies behind student loan relief. In his weekly address, President Obama's weekly address: Supporting America's Students (full video and transcript)  our President "outlined the myriad ways in which college prices and student loan debt have risen over the past three decades."  

“…At a time when college has never been more important, it’s also never been more expensive,” Obama said.

As he pointed to Senator Elizabeth Warren's bill as a solution.  

“The good news is that Senate Democrats are working on a bill that would help more young people save money. 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,” he 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.”

Warren's bill would allow graduates with existing federal loans to refinance them at lower interest rates.

Republicans oppose the Democratic plan to pay for this bill with a new tax on top earners, and apparently have enough vote in the Senate to filibuster the bill, however, Democrats believe it is worth putting them on record and firing up students by letting them know the Republican obstructionists are choosing to saddle students with a life time of burdensome debt in order to protect millionaires from paying their fair share.

Holy smokes, its almost as if Democrats suddenly have discovered the gift of political insight, and have developed "fire in our bellies." Senator Warren is a godsend to the Democratic Party.

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Jaffe tells us the Congressional Budget Office says the bill would "increase federal spending by $51 billion from 2014 to 2024.

I thought her plan was to pay for this with the same mechanism we give to banks for expanding the money supply? Why do we let banks borrow as much money as they like, at the Federal discount rate, allowing them to make incredible profits, without insisting this be "paid for" in the federal budget, but we can not do the same for students? I have to go back and take a look at Senator Warren's plan and description, I've heard her say his before. Maybe she's "throttling back at bit" to get the President and other Democrats on board?

Jaffe reports President Obama is expected to "fully endorse" Warren's bill at the White House on Monday.  


"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," Obama said.

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Sam Stein and Shahien Nasirpour of the Huffington Post wrote late last night Obama To Endorse Elizabeth Warren's Student Loan Proposal

The Obama administration initially was hesitant to fully embrace the bill because of disagreements over how to pay for it. But with mounting pressure from advocacy groups, and with a renewed political focus on issues confronting working families, the president has softened his opposition. Obama’s endorsement would be the latest recognition to date of the ascendance of Warren-style populism within the Democratic Party.

Student groups and other organizations focusing on younger Americans enthusiastically support Warren’s bill, under which new interest rates would range from 3.86 percent for loans taken out by borrowers when they were undergraduates to 6.41 percent for parents who took out loans for their children's college tuition, as well as for borrowers who took out loans to pay for graduate school.

 photo EW1_zps5413265c.jpgPhoto credit: Tim Pierce at Tim Pierce - Flicker

The financial industry, perhaps not surprisingly, is less enamored with the proposal. The bill would allow borrowers to refinance loans owned by the private sector into new loans made by the Education Department. Paying off loans early deprives lenders of future interest income, causing paper losses.

Republicans are expected to strongly oppose the bill because Democrats propose paying for the "loss of future federal revenue by increasing taxes on the wealthy." Again, why don't we just let students borrow at the same overnight rate that banks do?  

Stein and Nasirpour say this is part of the "Senate Democrats’ so-called “Fair Shot” agenda in advance of November’s elections" designed to inspire out base. "Thirty-five other senators are co-sponsoring the measure."

Great job Senator Elizabeth Warren. Thank you for looking our for out students.

5:13 AM PT: Here's a video of Senator Warren holding Senate Hearings a few days ago on her student loan proposal. Banking Hearing on Student Loan Servicing




5:20 AM PT: LIndsey Holst of the WhiteHouse.gov site write Weekly Address: Supporting America's Students



In this week's address, President Obama underscored the importance of helping to lift the burden of crushing student loan debt faced by too many Americans and highlighted the efforts he’s taken to ensure we uphold America's commitment to provide a quality education for all who are willing to work for it. While the President will continue to take action on his own, he urged Congress to do its part and commended Senate Democrats for working on a bill that would help more young people save money.




For Immediate Release June 07, 2014

Weekly Address: Supporting America’s Students



WASHINGTON, DC -- In this week’s address, President Obama underscored the importance of helping to lift the burden of crushing student loan debt faced by too many Americans and highlighted the efforts he’s taken to ensure we uphold America’s commitment to provide a quality education for all who are willing to work for it. While the President will continue to take action on his own, he urged Congress to do its part and commended Senate Democrats for working on a bill that would help more young people save money.

Remarks of President Barack Obama

Weekly Address

The White House

June 7, 2014

Hi, everybody.  This is commencement season, a time for graduates and their families to celebrate one of the greatest achievements of a young person’s life. But for many graduates, it also means feeling trapped by a whole lot of student loan debt.  And we’ve got to do more to lift that burden.

See, 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.  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.

That’s why, since I took office, I’ve worked to make college more affordable.  We reformed a student loan system that gave away billions of taxpayer dollars to big banks and invested that money where it makes a bigger bang – in helping more young people afford a higher education.

But over the past three decades, the average tuition at a public four-year college has more than tripled.  The average undergraduate student who borrows for college now graduates owing almost $30,000. And I’ve heard from too many young people who are frustrated that they’ve done everything they were supposed to do – and now they’re paying the price.

I’ve taken action on my own to offer millions of students the opportunity to cap their monthly student loan payments to 10% of their income.  But Congress needs to do its part. The good news is that Senate Democrats are working on a bill that would help more young people save money.  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.

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.

This country has always made a commitment to put a good education within the reach of all who are willing to work for it.  That’s what made us an economic superpower.  That’s what makes us special.  And as long as I hold this office, I’ll keep fighting to give more young people the chance to earn their own piece of the American

Originally posted to HoundDog on Sat Jun 07, 2014 at 04:06 AM PDT.

Also republished by Massachusetts Kosmopolitans.

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Comment Preferences

  •  Tip Jar (22+ / 0-)

    Humor Alert! No statement from this UID is intended to be true, including this one. Intended for recreational purposes only. Unauthorized interpretations may lead to unexpected results. This waiver void where prohibited. Artistic License - 420420

    by HoundDog on Sat Jun 07, 2014 at 04:06:34 AM PDT

  •  Populist Optics (5+ / 0-)

    Wow. Closing loopholes on the wealthy in order to help new entrants to the work force who get introduced rudely into the modern day economy where they have to rely on the financial industry like people in neighborhoods dominated by the mafia have to rely on loan sharks to survive. more of this please. I wonder if people are going to side with the struggling young or the rich? What a bold risk for Democratic policymakers.

    •  A humorist, eh? Well Leo, this is difficult call, (6+ / 0-)

      we will have to wait and see what the polls say.

      You may be right, some Democrats may fear betting on students facing a lifetime of crushing debt to think that maybe we should close tax loopholes for obscenely rich millionaires is too much of a risk.

      But, this energetic, self-confident, and smart Elizabeth Warren seems to have a populist intuition about these students and regular people. Maybe we should give her a chance and see if she can fire up voters frozen in this miasma of discouragement that our political leaders and government will get off their butt do some thing for regular and middle class Americans?

      I know it seems a little radical - the idea of doing something really helpful to students just starting off in life - after all - its not like they have enough money to donate a lot to political candidates - but they have a lot of energy. (Snark alert.)

      Maybe this kind of "boldness," can-do spirit, and fresh ideas Elizabeth Warren seems to have so much of is exactly what American needs right now.  

      She reminds me of that saying Martin Luther King, Jr. used to say -- what was it - oh yes, "the fierce urgency of now."  Maybe if we positively advance a progressive agenda and a series of quick actions with a populist theme we could get people "fired up" and ready to go?

      Like filling them with hope for a better future, or something along that theme and energy?

      She seems to have the right stuff. and comes across as young, energetic, sparky, passionate,  patriotic, attractive, charismatic, brilliants, compassionate, wise, and dedicated to regular Americans.

      She seems like a rising star whose promise filled future and best days are ahead of her. Almost like a fresh start and burst of new energy we haven't seen for a while.

      Plus, she's a woman, and we need more woman leaders and role models in high level leadership positions.

      So I am encouraged, despite the "riskiness" of trying to actually do something for regular people.  

      Humor Alert! No statement from this UID is intended to be true, including this one. Intended for recreational purposes only. Unauthorized interpretations may lead to unexpected results. This waiver void where prohibited. Artistic License - 420420

      by HoundDog on Sat Jun 07, 2014 at 05:07:51 AM PDT

      [ Parent ]

  •  Student loan debt is hurting the housing market. (10+ / 0-)

    Sales for entry level housing are hurting due this debt.  Numerous economists have written  about it recently.   The overall economy is suffering due to a weak housing market.

    •  I was just reading about this. Crushing student (4+ / 0-)
      Recommended by:
      Gooserock, bluenick, nzanne, chuck utzman

      loan debt could take these current and future generations right out of the American dream.

      Humor Alert! No statement from this UID is intended to be true, including this one. Intended for recreational purposes only. Unauthorized interpretations may lead to unexpected results. This waiver void where prohibited. Artistic License - 420420

      by HoundDog on Sat Jun 07, 2014 at 05:22:12 AM PDT

      [ Parent ]

      •  All the Economic Issues of Our Time Have to Be (0+ / 0-)

        approached through the nobility, this being an oligarchy which won't represent the people on anything where ownership objects.

        This is why we need more Catholics in the party, they grow up with a world view of patrons and intercessors. The rest of us are coming in late to the game.

        The obvious patronage for the student loan relief would indeed be the real estate market, and a secondary approach would be to reach out to those sectors of financial markets that wouldn't be so impacted by the loss in student loans, but would benefit from having young adults grow into lifetime investors.

        But seriously. LOW interest? We make the kids pay ruinous costs for the education itself to the point that most of the population the state universities were built for can no longer apply. Let's at least make the interest free, eh?

        We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

        by Gooserock on Sat Jun 07, 2014 at 05:31:25 AM PDT

        [ Parent ]

        •  Free interest will just increase tuition (1+ / 0-)
          Recommended by:
          River Rover

          Colleges will typically charge as much as they can get away with. No interest means the student can "afford" more base tuition. Gotta pay those $350k administrator salaries somehow.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sat Jun 07, 2014 at 05:57:25 AM PDT

          [ Parent ]

    •  Interest on student loans relative to mortgage (1+ / 0-)
      Recommended by:
      chuck utzman

      interest has quadrupled in just 11 years.  In 2003 I was able to consolidate my grad school loans at half my mortgage rate (3% when mortgage interest was 6%); last year my parental loans were at 8% when mortgage interest was at about 4%.  [so my logic is clear, student loan interest has gone from being half as high as mortgage interest, to twice as high as mortgage interest.]

      This doesn't just hurt the housing market, it consolidates wealth in the wealthiest.  Parents who have home equity and can refinance can help their kids get a lower interest rate, those who can't do that are probably less well off overall.  

      I wish Warren had gone further with this, and also demanded that student loan interest be fully deductible, the way that mortgage interest is.  It's capped at $2,500, which at 8% is the interest on only about $32K.  

  •  Other Nations Make College Free. Why Can't We (5+ / 0-)
    Recommended by:
    jrand, Mary Mike, SGA, a2nite, chuck utzman

    make the paltry offering, in our greatest 3rd world society ever, of at least making the interest free?

    I know, I know. Better that all kids should have hundred thousand dollar loans than even any education to use it on, that's the answer to what they can do for their country.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sat Jun 07, 2014 at 05:26:12 AM PDT

  •  Excellent! (1+ / 0-)
    Recommended by:
    Mary Mike
  •  Re (1+ / 0-)
    Recommended by:
    shrike
    Republicans are expected to strongly oppose the bill because Democrats propose paying for the "loss of future federal revenue by increasing taxes on the wealthy." Again, why don't we just let students borrow at the same overnight rate that banks do?  
    Because they're not borrowing "overnight", they are borrowing over the course of years and with a comparatively high default rate.

    If the Democrats were serious about student loan reform, they would make student loans dischargeable in bankruptcy and devolve most lending to the private sector. That would end the worst of the abuses because the private sector will not lend to people who are unlikely to pay their loans back.

    As it is, the situation is unsustainable and band-aids like Warren's bill will only serve to increase tuition in the medium term. You'll get a lower interest rate but your base tuition will be $15k more. What a deal.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Sat Jun 07, 2014 at 05:55:01 AM PDT

  •  Two things (1+ / 0-)
    Recommended by:
    thestructureguy

    1) we just refinanced my wife's student loans, it took two phone calls and a form we had to notarize.  We did it through the fed loan program so how is it that people can't do that today when we did it two months ago?  Did we fall into some special group to qualify for this?

    2) I would point out that ALL debt harms the housing market.  Car loans, credit card loans, short term loans, etc all remove the ability of someone to take on the massive debt a house purchase represents. No, student loans don't help either.

    Part of the problem with student loans is they are a response to the increasing cost of college which is being driven up by State colleges forcing more of the expense of running a state college on to students.  As well as crazy things like colleges pushing students to stretch out the course load to five years for a four year degree, advocating living on campus in college owned dorms, eating on college provided meal plans, and a large number of non-major specific courses you have to take to graduate.

    People are also not saving up for college, are not applying for scholarships, and out of hand reject military service with its offer of free college education.

    I say the last because between the loan repayment program and GI Bill, it cost me $2,500 for my degree from a State University in Ohio that is not known for a plant or sports ball.

    Stupid question hour starts now and ends in five minutes.

    by DrillSgtK on Sat Jun 07, 2014 at 06:13:07 AM PDT

    •  I checked on this less than a year ago, and they (0+ / 0-)

      could be consolidated into one loan, with the interest rate set at the weighted average of all of the loans.  It would make repayment more convenient, but would have saved me $Zero.  

  •  This and.. (0+ / 0-)

    making student loan payments tax deductible would be a great way to eliminate the student loan problem in America.

    Sadly, I doubt the Democrats will fight for it.

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