Having millionaires help with student debt

Sen. Elizabeth Warren (D-MA) laid out a new plan that would tax millionaires and use that revenue to help students

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refinance their student loans, as reported by ThinkProgress

“Delivering the keynote address at the Higher Ed Not Debt Campaign launch event on Thursday at the Center For American Progress, Warren argued that America faces a choice: “Do we invest in students, or millionaires?” Warren plans to introduce a bill that would create an “America that invests in those who get an education” by revising the tax code and enacting the Buffet rule.

“The Buffet rule is named after billionaire Warren Buffet and would establish a minimum tax on income in excess of $1 million. The measure, which never got out of Congress, raises approximately $50 billion in revenue and ensures that millionaires do not pay lower tax rates than middle-class families.

“Congress acted to lower the federal unsubsidized student loan interest rate to 3.86 percent for undergraduates for the 2012-2013 academic school year. But unless it acts again, the $1.2 trillion in outstanding student loan debt will continue to grow.

“Warren’s plan would allow students with outstanding student loans to refinance at lower rates. The cost of the change would be covered by a “dollar for dollar” effort where for “every dollar the Buffet rule brings in, we use that dollar to refinance student loan debt,” she explained. She estimated that recent graduates who borrowed the maximum in undergraduate loans could see their payments drop by $1,000 a year and total interest paid over the life of the loan could be cut nearly in half. Continue reading “Having millionaires help with student debt”

Let’s actually talk about student loans

There is more student loan debt outstanding — $1 Trillion — than credit card debt! And the government is making a huge profit on it — an estimated 36 percent profit margin, reports the Huffington Postimages-1

“Here’s the real shame: The government gets to borrow for 10 years paying less than 2 percent interest on U.S. Treasury notes, while students must pay 6.8 percent interest on the loans they get from the government!

“The government is ripping off college students, leaving them with a burden of debt that averages $27,000, and for many exceeds $100,000, while they are forced to pay above-market interest rates.

“Students will spend so much time and pay so much interest getting out of student loan debt that most will never be able to afford to buy a home. Today’s homebuyers can get a 3.5 percent, 30-year fixed-rate mortgage. But today’s students may never get to take advantage of today’s low mortgage rates, because the government demands twice that rate to pay off their student loan debt. Continue reading “Let’s actually talk about student loans”

Seniors in debt over kids’ school loans

“The early-morning calls from debt collectors continued even after her massive stroke, waking Bella Logan to daily reminders that she owed $75,000 in student loans. Logan is 94.” This is from today’s Columbus Dispatch, and the story is a grim recessionary tale:

Light at the End of the Road

“The federal government garnisheed $200 a month from Robert Austin’s Social Security checks for years for student-loan debt, leaving Austin without money he needed for medications. He is 83. After Ray Stockman’s wife died, he wanted to move but was turned down three times Continue reading “Seniors in debt over kids’ school loans”