Elizabeth Warren Calls for Student Loan Changes | 05.16.13

Posted in Financial Aid, News, Stafford Loan, Student Loans By Student Loan Network Staff

Last year at this time, the big issue in the news was the impending doubling of student loan interest rates. The interest rates of Subsidized Stafford Loans were set to double from 3.4% to 6.8%. Before this could happen, Congress stepped in, temporarily lowering them for another full year.

That extra year of low rates is now coming to a close, and rates are once again set to double. This is why Senator Elizabeth Warren has introduced the Bank on Students Loan Fairness Act. This act would allow students to borrow at the same rate as banks, which is about “one-ninth the amount that students are asked to pay”.

Here is a quick list of what this bill seeks to do:

  • The bill would charge students a rate equal to the rates banks are getting from the government (for subsidized loans only)—a rate of less than 1%.
  • Loans would be funded through the federal reserve, with administration by the Department of Education

Senator Warren gives an excellent overview in her introduction of the bill to the Senate Committee. Watch it below.


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8 Responses to “Elizabeth Warren Calls for Student Loan Changes”

  1. Marlene says on June 15, 2013 at 1:15 am:

    STUDENT LOANS FROM THE GOVERNMENT AT 6-9 PERCENT IS TERRIBLE. WHERE DOES THE GOVERNMENT GET THE MONEY IN THE FIRST PLACE? THE PARENTS. IT IS RIDICULOS THAT THE GOVERNMENT IS CHARGING my
    KID TO USE MY MONEY.

    Reply To This Comment
  2. Sheri says on June 3, 2013 at 9:44 pm:

    My daughter is starting graduate school-does this bill affect the unsubsidized stafford or grad plus loan rates? The ol explained that grad school does not qualify for a subsidized stafford.

    Reply To This Comment
    • Student Loan Guru says on June 5, 2013 at 9:16 am:

      It’s unclear which direction student loan reform will take right now, as there are a few different bills being looked at. It’s possible that all federal rates will change as a result of potential legislation, but until a bill is passed, it’s unknown how different loan types will be affected.

      Reply To This Comment
  3. Enid says on May 21, 2013 at 5:28 pm:

    HI! Will the unsubsidized rate of 6.8% remain the same after July 1, 2013? Thanks!

    Reply To This Comment
  4. Santos Cervantes says on May 17, 2013 at 9:28 pm:

    I am a parent with US Department of Education loan of 37K plus. Can i transfer loan balance to a Stafford loan? I am desperate because my current rate is 7.9%. Please help!

    Reply To This Comment
    • Student Loan Guru says on May 21, 2013 at 8:16 am:

      Unfortunately, you cannot turn PLUS Loans into Stafford. At this time, there is no way to refinance the interest rate on a student loan. However, you may want to look into a consolidation loan through the Department of Education. This would not affect your interest rate, but could provide some repayment relief through other repayment plans.

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