Ever since proposing the Bank on Students Loan Fairness Act last week, Sen. Elizabeth Warren (D-Mass.) has amassed heaps of support in only a few short days, according to The Huffington Post. A petition in support of the bill, started by MoveOn.org, has already gotten over 250,000 signatures.
The Bank on Students Loan Fairness Act is Warren’s first-ever Senate Bill and proposes a near-zero percent interest rate on student loan payments, the same rate as corporate banks. The Federal Reserve says that giving banks the low rates “is essential amid a lackluster economy.” Warren asserts that with students and recent college grads facing such incredibly high interest rates, they are less likely to consume and borrow money, thus slowing down recovery.
A report by the Federal Reserve Bank of New York indicated that “the average student loan balance among those twenty-five-year-olds with student debt grew by 91 percent over the period, from $10,649 in 2003 to $20,326 in 2012.” The study also shows that loan payment delinquencies have risen, as well.
Should Warren’s bill get passed into law, it will afford students the chance to catch up on finances and become more confident in making larger investments like homes and auto loans. It definitely has the popular support, and hopefully it will get etched into the books.
Joshua de Leon is a writer and researcher with Ring of Fire.