Warren, Tierney rally for lower student loan rates

At a campus event on Monday morning, U.S. Sen. Eliz­a­beth Warren said that a looming hike to fed­eral stu­dent loan rates would squeeze bor­rowers nation­wide, and she urged col­lege stu­dents to press Con­gress into action to avoid the rate increase.

On July 1, the interest rate on fed­er­ally sub­si­dized Stafford stu­dent loans is set to double from 3.4 per­cent to 6.8 per­cent, and Democrats and Repub­li­cans are still at odds over the right course of action. Among the pieces of leg­is­la­tion being dis­cussed is Warren and U.S. Rep. John Tierney’s Bank on Stu­dent Loan Fair­ness Act, a bill that would allow stu­dents to take out Stafford loans for one year at an interest rate of less than 1 percent—the same rate at which they say finan­cial insti­tu­tions can borrow from the Federal Reserve.

Warren under­scored the need for leg­is­la­tion by pointing out that there is approx­i­mately $1 tril­lion in out­standing stu­dent loan debt in the United States today.  What’s more, she said the gov­ern­ment hauls in $51 bil­lion in profits off stu­dent debt.

“We need to get our student-​​loan problem under con­trol,” Warren told stu­dents at the event, held in West Vil­lage F. “It’s weighing down our stu­dents, it’s weighing down their fam­i­lies, and it’s weighing down the economy.”

Pres­i­dent Joseph E. Aoun intro­duced Warren and Tierney at Monday’s event. In his opening remarks, Aoun said North­eastern will provide $204 mil­lion in insti­tu­tional grant aid for 2013–2014, the largest financial-​​aid invest­ment in the university’s his­tory. The increase rep­re­sents a 9 per­cent rise from the pre­vious aca­d­emic year and aligns with Northeastern’s strategy to increase finan­cial aid at double the rate of tuition and fees—a goal the uni­ver­sity has met each of the last six years.

Aoun has long taken a lead­er­ship role in tack­ling crit­ical issues in higher edu­ca­tion on a national stage, ranging from finan­cial aid to national secu­rity to reg­u­la­tion of unpaid intern­ships at the fed­eral level. On Monday, he said the U.S. has the best higher edu­ca­tion system in the world, in part because of the part­ner­ship between gov­ern­ment and the public and pri­vate sectors.

“We want to keep col­lege afford­able and acces­sible,” he said. “Higher edu­ca­tion has a role to play to pro­vide access and out­comes. We have to pre­pare stu­dents for the job market. This is a pri­ority, and pro­viding stu­dents with finan­cial aid is the first step.”


U.S. Sen. Elizabeth Warren urged college students to press Congress into action to avoid a looming hike to federal student loan rates. Photo by Brooks Canaday.

Warren also hailed Northeastern’s experiential-​​learning model, including the university’s sig­na­ture co-​​op pro­gram. More than 7,000 stu­dents par­tic­i­pate in co-​​op each year at more than 2,900 employers world­wide. Stu­dents do co-​​op, study abroad, faculty-​​led study abroad, and research in 92 coun­tries and on all con­ti­nents. In addi­tion, more than 90 per­cent of grad­u­ates from 2006 to 2011 were employed or enrolled in grad­uate school nine months after graduation.

“I love to come here because North­eastern has a vision for how to edu­cate people, and it’s not the same vision as every other university,” Warren said. “To see it in place, to see it hap­pening, is what excites me every time I come here.”

Warren urged stu­dents to join their peers nation­wide in pressing Con­gress into action to avoid the looming rate increase. She said avoiding this rate hike would serve as “a foot in the door” to later address two larger higher-​​education issues: the rising costs of college and refi­nancing the nation’s col­lec­tive out­standing stu­dent loan debt.

“We cannot as a country say it’s crit­ical to get a post-​​high school education…and then say you’re on your own to get it,” Warren said.

For his part, Tierney, who is a member of the House Com­mittee on Edu­ca­tion and the Work­force, decried the notion that stu­dent loans should be a “profit-​​making enterprise.”

“Stu­dent loans are meant to give people access to higher edu­ca­tion in an afford­able way so they can have great oppor­tu­nity and contribute to society,” Tierney said.

Read more about this topic in The Boston Globe article, Warren, Tierney urge students to fight rate hike.