On July 1st, the interest rate on new, federally subsidized student loans is set to double from 3.4 to 6.8 percent.
The government plans to charge students 6.8%, but they lend money out every day for a whole lot less. They just don't do it for everyone.
Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about 0.75%. Those are the same big banks that destroyed millions of jobs and nearly broke our economy.
That isn't right. And that's why I introduced legislation to give students the same deal we give to the big banks. This was my very first bill in the U.S. Senate, and I'm going to fight for its passage.
And we're already starting to move: Rep. John Tierney just introduced a companion bill in the U.S. House. We're ready to go!
The Bank on Students Loan Fairness Act would allow students who are eligible for federally subsidized Stafford loans to borrow at 0.75% -- the same rate that big banks get.
For one year, the Federal Reserve would make funds available to the Department of Education to cover the loans and give students relief from high interest rates while giving Congress time to find a long-term solution.
If the government can float huge sums of money to large financial institutions at low interest rates to grow the economy, surely it can float the money necessary to fund our students, keep us competitive, and grow our middle class.
I met a young man at a campaign event last year. He held his hand out, looked me straight in the eye, and he said to me:
I did everything you all told me to do. I worked hard, I got good grades, and I got into college. I borrowed money, I worked hard, and I graduated. Now I have $54,000 in student loans. The best I can find is a part-time job. I've moved back in with my mom and dad… And I'm getting scared about whether there's a future out there for me.
The worst part of that young man's story is that he's not alone -- He's part of a whole generation drowning in student loans. Today's students carry more than $1 trillion in debt -- more than all the outstanding credit card debt in the whole country.
That young man said to me, "I'm here because I'm looking for a fighter."
I'm ready to fight.
Thank you for being a part of this,