Progressive Push on Debt by Inside Higher Ed
A coalition of progressive groups on Thursday formally began a new campaign aimed at curbing rising student debt and reducing the price of college.
The group of think tanks, student organizations, consumer advocates, and unions is targeting the country’s “increasingly dysfunctional system of higher education,” said Anne Johnson, executive director of Generation Progress, the youth division of the Center for American Progress, which is an organizer of the campaign.
Speaking at the launch event Thursday, Senator Elizabeth Warren of Massachusetts, a Democrat, said the $1.2 trillion in outstanding student debt was unfairly “penalizing young people for getting an education.”
“The federal student loan program makes this problem worse,” she said, citing the billions of dollars in profit that the government makes on student loans, though the extent of that profit margin is disputed.
Warren outlined new legislation she plans to introduce that would allow all federal student loan borrowers to refinance their debt at a 3.86 percent interest rate. She proposed paying for the refinancing program by raising taxes on wealthy Americans under the so-called Buffett Rule, which would impose a new minimum tax rate on personal incomes higher than $1 million.
The refinancing effort, Warren said, would effectively cut in half the interest rate on many existing federal student loans and save borrowers with the maximum federal loan for undergraduate education about $1,000 each year.
“This is real money back in the pockets of students who invested in their education,” she said.