NEW: Brown, Warren Tackle Student Loan Interest Hike

Monday, May 07, 2012

GoLocalWorcester News Team

U.S. Sen. Scott Brown, D-MA, and his Democratic challenger, Harvard law professor Elizabeth Warren, want interest rates level on Stafford Loans.

The current interest rate of 3.4 percent will double on July 1 if Congress does not act. Both Brown and Warren have seized the controversial issue as a rallying cry for reform aimed at protecting students and their families.

'Working together'

“It’s time to stop playing politics and get to work on a real bipartisan compromise to preserve current student loan rate,” Brown said in a recent press release. “The job market is dismal and the cost of getting a college education is out of control. We should be working together on a solution that prevents these rates from skyrocketing in July.”

In an op-ed on the Blue Mass Group Website, Warren said, “The rising price tag for an education is swamping more and more families. After adjusting for inflation, a student paying for tuition and fees at a public university today will pay more than 350 percent of what her parents paid 30 years ago. The costs of private schools are even higher. Fewer and fewer families can manage those costs without turning to debt. It is no surprise that the combined national student debt is now more than $1 trillion.”

Brown also introduced a reform package of two bills calling, in part, for a one-year extension of the 3.4-percent interest rate for Stafford Loans and a requirement for colleges and universities to post tax forms online detailing faculty and administrative salaries and benefits. According to Brown, the extension would be paid for by reducing improper payments made by the federal government, including payments sent to the wrong recipient, incorrect amounts sent to the right recipients and money used in an improper manner.

Greater transparency on the part of higher learning institutions will give parents and students another tool to use in making the right decisions on where to send the child to college, Brown said.

“Parents and students deserve to have a clear picture of what they’re buying and why the cost of education is so high,” he said. “When tuition rises, students should be able to know what their money is being spent on.”

Priorities are reflected

In her op-ed, Warren took a shot at Congress, repeating her frequent criticism of tax breaks for the rich.

“Investments in education cost money, and where we spend our money reflects our deepest priorities as a country,” she wrote. “In the past few weeks, Congress voted to protect subsidies for oil companies and special tax breaks for billionaires. That money could have been invested in our public colleges and universities, in advanced technical training programs, or in stronger grant programs. It is time for Washington’s priorities to line up with the students and their families who are working hard to build a real future.”

Congress, Warren continued, has a responsibility to guarantee affordable education.

“A generation of young people already faces a mountain of student debt,” she wrote. “Congress must act quickly to ensure that student loan interest rates stay at a reasonable level. Over time, we need to make consistent, thoughtful, and well-planned investments in education. Our children, our families, and our future depend on it.”