U.S. Sen. Elizabeth Warren, D-Mass., plans in 2015 to continue her focus on student loan debt and the potential long-term problems it poses to the economy despite now facing a Republican-controlled Congress.
Warren's push for a bill to allow people to refinance student loans at the current low rates failed last year in the Senate. The Bank on Students Emergency Loan Refinancing Act would have let people with federal and private loans issued before 2010 to refinance at 3.86% - the interest rate that Congress set for federal student loans in 2013. The vote was 56-38.
The Obama administration estimated that the bill could have helped 25 million borrowers save $2,000 over the lifetime of their loans.
Now, with personnel changes in Congress, the challenge is greater.
But Warren said she simply will push harder to explain how rising student loan debt affects everyone, even if they don't carry outstanding student loans. She discussed her plans recently with a group of media members in Massachusetts.
Warren said the Federal Reserve, Consumer Financial Protection Bureau and FDIC all have conducted reports showing that young people with student loan debts are not pushing the economy forward as a result of the burden. That presumably includes delaying home purchases.
"I talk about student loan debt every chance I get. I talked with the folks at Staples and they said a big part of their business is start-ups because a lot of them do purchases through Staples. They talked about how during the recession that was a real problem as less people were starting businesses," Warren said, according to MassLive.com. "I talked to them about the data that showed young people are not starting businesses at the rate we anticipate and a big reason was the student loan debt. They were interested and I want them to be interested. They can help us make change. This affects us all. This affects housing values. The home builders get this. The realtors get this. And the more people who get it, the better off we'll be."
She said another issue related to education and the rising cost of college involves the federal government taking a more active role to make sure the institutions benefiting from billions in government tuition grants act properly to take care of students. While the government shells out a great amount of grant money each year, she said it does little to require that colleges and universities, especially for-profit institutions, keep costs down and ensure a quality education.
"[Many people] get preyed on by these for-profit universities," she said. "These students get saddled with tens of thousands of dollars in debt and no diploma. In the end, many have wasted time and money here. This highlights the failure of the federal government to keep college affordable."
It's unclear when any revised student loan legislation will return to Congress.
When Warren's bill was defeated last year, Mitch McConnell (R-Ky), on the Senate floor, stated, "The Senate Democrats' bill isn't really about students at all. It's really all about Senate Democrats. They want an issue to campaign on to save their own hides this November."
The bill called for the creation of a new tax on millionaires to offset the cost of lowering interest rates. Warren said Democrats are open to alternative plans to pay for the rate reduction, but added that her GOP colleagues have not offered any.