Student loan borrowers are trying to do the responsible thing by paying off their loans but are being punished with high interest rates.
When you take out a mortgage or car loan, you can refinance the loan to get a better interest rate. With student loans, however, you’re stuck with the interest rate set by Congress, even though that rate is high enough to produce massive profit beyond the costs of operating the student loan program. And that’s just not fair.
The student loan refinance bill, sponsored by Sen. Elizabeth Warren (D-Mass.), would allow 25 million student loan borrowers to refinance the interest rates of their student loans, and those extra savings will go a long way in this economy where unemployment is still too high and wages aren’t rising fast enough.
The Senate this week is poised to take a vote on Warren’s student loan bill (S. 2432). Unfortunately, the last time the bill came up for a vote, Senate Republicans chose to stand with their wealthy campaign contributors over tens of millions of students and their families.
Thankfully, Senate Republicans will have one more chance to change their minds.
Call your senators today at 1-855-712-9375 and tell them to pass S. 2432 so student loan borrowers will no longer be punished with high interest rates.
Income inequality is a very destabilizing thing in the country, a very polarizing thing in the country. In other words, it’s responsible for the divisions in the country. Those divisions could get wider. If you can’t legislate, you can’t deal with problems. If you can’t deal with problems, you can’t drive growth, and you can’t drive the success of the country.
But he also said something else. When the show’s host pointed out that many people are speaking out against income inequality but fewer are taking action, the bank CEO agreed. “Yes, full stop. If there was a lever to pull and a button to push, we would pull it and push it.”
Technically he is correct. There is not a lever or a button. But there are very clear policy solutions that would go a long way toward alleviating the destabilizing force of income inequality:
The financial transaction tax. Also called the “Robin Hood tax,” the FTT is a small fee on stock and bond trades, derivative contracts, and swaps of other complex Wall Street instruments. It would amount to about $0.0003 per dollar, or $18 a year for the median 401(k) holder, but would produce an estimated $352 billion in revenue over 10 years. That extra revenue could be used to pay for things Congress claims we can’t afford: renewing unemployment insurance, restoring cuts to SNAP, investments in infrastructure, and assistance to state and local governments who have been forced to layoff thousands. To folks like Blankfein, who has a $2 million salary and tens of millions more in bonuses, the FTT would feel like a blip.
Raise the minimum wage. This is one you’re familiar with. Raising the minimum wage to $10.10, as proposed in the Harkin-Miller bill filibustered by Senate Republicans, would raise the wages of 27.8 million workers, grow GDP by about $22 billion, and create roughly 85,000 net new jobs. As one of the world’s most powerful bankers, Blankfein support for raising the minimum wage–and his refusal to support politicians who oppose it–would have a huge impact.
Stop attacking the CFPB. The banking lobby, of which Goldman Sachs is a large part, viciously opposed the creation of the Consumer Financial Protection Bureau in 2010 (as detailed by author and Massachusetts Senator Elizabeth Warren in her bestselling book). But since its creation, the CFPB has recouped millions of dollars for consumers from mortgage, credit card, and banking companies that were skirting or outright breaking the law. Oftentimes, the offending companies are directly scams at the most vulnerable Americans: debtors, students, veterans, low-income families and families of color. Forget outright support–if Blankfein called off his lobbying team from attacking and attempting to weaken the CFPB, the Bureau’s future and its ability to recoup losses for consumers would be more secure.
Sen. Elizabeth Warren (D-Mass.) introduced a bill today to allow borrowers to refinance their outstanding student loan debt. The Bank on Students Emergency Loan Refinancing Act is an excellent step toward easing the crushing $1.2 trillion student loan debt borne by graduates and reducing barriers to higher education for working families. Average college seniors in 2012 had a balance of $30,000 facing them as they graduated. Many borrowers find themselves making payments well after the end of the standard 10-year repayment period.
Unlike most forms of debt, student loans cannot be refinanced; the borrower is locked into an interest rate from the day he or she signs the promissory note—usually as a teenager—until the debt is paid in full. And unlike most forms of debt, borrowers are unable to take advantage of lower interest rates to reduce their monthly payments and total amount of interest paid.
The question we should be asking is why the government works so hard to carefully regulate growth with variable interest rates while allowing this massive pool of government-backed loans to remain at a fixed rate, trapping millions of workers in debt and unable to buy homes and cars?
Here’s one answer: The government is profiting from the federal student loan program. It’s raking in billions of dollars every year. The Congressional Budget Office estimates that by 2025, $127 billion in profit will be made off the backs of working families paying interest on student loans. In fact, some Republican members in the House have proposed student loan revenues be used to pay down the deficit. It shouldn’t come as a surprise that those same politicians lobbied successfully to tie student loans to market rates (which will make students loans more difficult to pay off as the economy improves). And these are the same politicians who fight to preserve massive corporate tax subsidies that make it more profitable for companies to send jobs overseas. Simply put, they are using the debt peonage of students to pay for billion-dollar corporate giveaways.
Corporations don’t need help from America’s taxpayers to boost their record profits. Fittingly, the Warren refinance bill addresses a major part of the tax giveaway to the wealthy and powerful by implementing the “Buffett Rule” to pay for the reduced profits. Under the Buffett Rule, many of the tax loopholes that let millionaire and billionaire CEOs reduce their taxes to almost nothing would be closed, requiring them to pay tax rates at least as high as their secretaries.
Congress’ decision to favor corporations over students is appalling. The Warren refinancing bill helps to undo some of the damage this decision has done to students and working families. Allowing borrowers to refinance their student loans puts them one step closer toward achieving the American Dream: They’ll be able to put a down payment on a home, fund their retirement and fund their own children’s education.
Along with increased funding on instruction and student services in order to lower the actual cost for public two- and four-year colleges and technical schools, the Warren refinance bill is a terrific step toward a comprehensive policy to make post-secondary education and training available to those who want it.
In the midst of a national debate on economic inequality, three books that speak to the ever widening class divide in this country have landed in the top five of Amazon’s best-seller list.
Thomas Piketty’s widely successful book, Capital in the 21st Century, comes in at number one, which is hardly surprising considering the splash it’s made since its release. You’ve probably heard of it, but if you haven’t here’s a quick reference guide.
Massachusetts Senator Elizabeth Warren’s memoir, A Fighting Chance, lands at number three, and Michael Lewis’ Flash Boy: A Wall Street Revolt, a book about Wall Street bankers turned morally obligated revolutionaries, comes in at number five on the list.
For Americans at least, the timing of these books is impeccable.
Part of Piketty’s success is in his ability to capitalize on all of that, painting a rather grim picture of worldwide inequality that will only get worse before it gets better and will likely resemble a dark corner of 19th century Europe, pre revolution.
But Piketty gives readers pertinent data, an almost exhaustive amount, to back up his claims. His book points fingers at those responsible and backs up claims through research and data instead of theory.
The results of Capital in the 21st Century has everyone from economic policy makers to middle class Americans talking, and wondering why “they haven’t gotten a raise in years,” according to an interesting article in Time magazine.
Similarly, Warren’s memoir aims to inspire readers. Details her life as an awkward girl from Oklahoma with a dream to help make America, especially those in the middle, a better place is a great soundtrack to the country’s current state on dissatisfaction.
Hopefully these books provide proof positive that we’re moving in the right direction, pushing to raise the minimum wage while beginning to close the income gap so that we don’t find ourselves in some 19th century dystopian version of America.
Sen. Elizabeth Warren (D-Mass.) will be appearing at the AFL-CIO’s headquarters in Washington, D.C., with AFL-CIO President Richard Trumka on May 2 to promote her new book, A Fighting Chance, which chronicles her inspiring life story. From her working-class roots in Oklahoma to her successful 2012 campaign to replace incumbent Massachusetts Sen. Scott Brown (R), Warren tells the passionate story of what drives her to fight for working people. Here are 12 key quotes from her that show why she is a champion of the 99%.
1. “There is nobody in this country who got rich on their own. Nobody. You built a factory out there—good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory….Now look. You built a factory and it turned into something terrific or a great idea—God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”—September 2011
2. “People feel like the system is rigged against them, and here is the painful part, they’re right. The system is rigged.”—September 2012
3. “Hardworking men and women who are busting their tails in full-time jobs shouldn’t be left in poverty.”—August 2013
4. “Look around. Oil companies guzzle down the billions in profits. Billionaires pay a lower tax rate than their secretaries, and Wall Street CEOs, the same ones that direct our economy and destroyed millions of jobs still strut around Congress, no shame, demanding favors, and acting like we should thank them. Does anyone here have a problem with that?”—September 2012
5. “It is critical that the American people, and not just their financial institutions, be represented at the negotiating table.”—Summer 2009
6. “Americans are fighters. We’re tough, resourceful and creative, and if we have the chance to fight on a level playing field, where everyone pays a fair share and everyone has a real shot, then no one—no one can stop us.”—September 2012
7. “And that’s how we build the economy of the future. An economy with more jobs and less debt, we root it in fairness. We grow it with opportunity. And we build it together.”—September 2012
8. “I understand the frustration, I share their frustration with what’s going on, that right now Washington is wired to work well for those on Wall Street who can hire lobbyists and lawyers and it doesn’t work very well for the rest of us.”—October 2011
9. “If you’re caught with an ounce of cocaine, the chances are good you’re going to jail….Evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night.”—March 2013
10. “Corporations are not people. People have hearts, they have kids, they get jobs, they get sick, they cry, they dance. They live, they love and they die. And that matters. That matters because we don’t run this country for corporations, we run it for people.”—September 2012
11. “If there had been a Financial Product Safety Commission in place 10 years ago, the current financial crisis would have been averted.”—Summer 2009
12. “Nobody’s safe. Health insurance? That didn’t protect 1 million Americans who were financially ruined by illness or medical bills last year.”—February 2005
Today’s jobless workers face new discriminatory barriers to finding work in a broken economy. Some employers won’t consider out-of-work applicants for job openings. And more and more employers run credit checks, leaving long-term jobless workers, who have likely fallen far behind in their bills and seen their credit scores tank, on the streets.
Today Sen. Elizabeth Warren (D-Mass.) introduced a bill to stop employers from requiring prospective employees to disclose their credit history or disqualifying applicants based on a poor credit rating. Says Warren:
Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness—let people compete on the merits, not on whether they already have enough money to pay all their bills.
Even as the economy is slowly turning around, the recession and financial crisis continue to take a toll on working families. Many of whom are hardworking, bill-paying people who have seen the credit ratings damaged when they or a family member lost a job or a small business and saw the value of their homes plummet. Savings evaporate and payments get missed. Says Warren:
Most people recognize that bad credit means they will have trouble borrowing money or they will pay more to borrow. But many don’t realize that a damaged credit rating also can block access to a job.
While at one time it was common belief that a credit history could provide insight into a perspective employee’s character, Warren says that recent research has shown that an individual’s credit rating has little or no correlation with his ability to succeed at work. A bad credit rating is far more often the result of unexpected personal crisis or economic downturn than a reflection of someone’s abilities.
She also says, “This is one more way the game is rigged against the middle class.”
A rich person who loses a job or gets divorced or faces a family illness is unlikely to suffer from a drop in his or her credit rating. But for millions of hardworking families, hard personal blow translates into a hard financial blow that will show up for years in a credit report.
People shouldn’t be denied the chance to compete for jobs because of credit reports that bear no relationship to job performance and that, according to recent reports, are often riddled with inaccuracies. Click here to become a citizen co-sponsor of The Equal Employment for All Act.
The bill is co-sponsored by Sens. Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), Patrick Leahy (D-Vt.), Edward Markey (D-Mass.), Jeanne Shaheen (D-N.H.) and Sheldon Whitehouse (D-R.I.).
We have a lot to be thankful for this year, including (in no particular order):
Union members who have volunteered their services to strengthen their communities (read more here).
All the activists—including those in Congress—working for a road map to citizenship for 11 million aspiring Americans.
Connecticut and the four localities (Portland, Ore.; New York City; Jersey City, N.J.; and SeaTac, Wash.) that now require paid sick days.
The five states and two localities that have raised the minimum wage this year (California, Connecticut, New Jersey, New York, Rhode Island, Montgomery County, Md., [measure passed yesterday, county executive confirms he will sign into law], Prince George’s County, Md., [pending county executive signature] and SeaTac, Wash. [where there may be a recount]).
The 10 states that have expanded access to the ballot (California, Colorado, Delaware, Florida, Maryland, New Hampshire, New Mexico, Oregon, Virginia and West Virginia).
Contrary to what The Washington Post and the billionaires who are trying to cut Social Security by pitting young people against seniors say, the nation does face a retirement crisis and Social Security doesn’t need to be cut. It must be—and can be—strengthened, said Sen. Elizabeth Warren (D-Mass.) in a powerful speech on the Senate floor Monday.
Just 18% of private-sector workers have traditional defined pension plans, and even with some employers providing 401(k) plans, she said that nearly half of workers lack access to those limited plans. More than 44 million workers have no retirement assistance from their employers.
With tens of millions of people more financially stressed as they approach retirement, with more and more people left out of the private retirement security system and with the economic security of our families unraveling, Social Security is rapidly becoming the only lifeline that millions of seniors have to keep their heads above water.
But instead of taking on the retirement crisis, instead of strengthening Social Security, Warren said, “some in Washington are actually fighting to cut benefits.”
So long as these problems continue to exist and so long as we are in the midst of a real and growing retirement crisis—a crisis that is shaking the foundations of what was once a vibrant and secure middle class—the absolute last thing we should be doing is talking about cutting back on Social Security. The absolute last thing we should do in 2013— at the very moment that Social Security has become the principal lifeline for millions of our seniors—is allow the program to begin to be dismantled inch by inch.
Cutting Social Security would mean cutting benefits for the two-thirds of seniors who rely on it for the majority of their income, said Warren. It would also affect the 14 million whose Social Security benefits keep them out of poverty.
While those calling to cut Social Security hid their intentions behind the claim that their “chained” CPI proposal is just a more accurate way to calculate the cost-of-living increases for seniors, Warren said:
“Chained” CPI? It’s just a fancy way of saying cut benefits…[instead] with some modest adjustments, we can keep the system solvent for many more years—and could even increase benefits.
No retirement crisis? Tell that to the millions of Americans who are facing retirement without a pension. Tell that to the millions of Americans who have nothing to fall back on except Social Security. There is a $6.6 trillion gap between what Americans under 65 are currently saving and what they will need to maintain their current standard of living when they hit retirement. $6.6 trillion, and that assumes Social Security benefits aren’t cut. Make no mistake: There is a crisis.
She also said the call to cut Social Security “has an uglier side.” The Post editorial and groups pushing Social Security cuts, like billionaire Peter Peterson’s “Fix the Debt” organization, are trying to drive a wedge between younger people and seniors by framing the debate as a choice between “more children in poverty versus more seniors in poverty.”
The suggestion that we have become a country where those living in poverty fight each other for a handful of crumbs tossed off the tables of the very wealthy is fundamentally wrong. This is about our values, and our values tell us that we don’t build a future by first deciding who among our most vulnerable will be left to starve.
Warren told the senators, “We don’t build a future for our children by cutting basic retirement benefits for their grandparents,” but instead:
We build a future for our kids by strengthening our economy, by investing in education and infrastructure and research, by rebuilding a strong and robust middle class in which every kid gets a chance and the most vulnerable have a strong safety net.
“Chained CPI is like the vampire of American politics,” Silvers said. “It keeps being shot through the heart and it keeps reviving. The reason it keeps coming back is because it has billionaires behind it.”
Naturally, the network’s anchors didn’t much like the sound of that. CNBC is one of Wall Street’s main TV mouthpieces, and it is in Wall Street’s interest that Social Security and Medicare are perceived as “entitlements” instead of the earned benefits of workers. After all, they want our politicians to balance the budget and “fix the debt” on our backs, not by raising taxes on their large incomes and investments.
The exchange Silvers had with CNBC anchor Simon Hobbs crystallized this clearly.
Damon Silvers: We’re being really clear. We’re not going to give cover to Democrats who think it’s a good idea to take away economic security from our most vulnerable citizens. We’re extremely clear about that and not embarrassed about it whatsoever. We want a really clear message out there. If you cut social security benefits or medicare benefits to our seniors, to our most vulnerable people in the country, you are going to get no support on it. It only treating them fairly there will be any progress going forward.
Simon Hobbs: Are you as clear on the reality that if you have don’t cut entitlement benefits this country may well go bankrupt?
Damon Silvers: That’s frankly not true. That’s a lie put forward by billionaires who don’t want to pay higher taxes. Social Security is the best funded aspect of our retirement system today and Medicare’s long-term issues are integrated with the long-term issues of our health care system. Neither program is overgenerous. In fact both programs are undergenerous. The only people who believe what you said are people not counting on those programs and who are worried their very large incomes will be taxed.
1. “There is nobody in this country who got rich on their own. Nobody. You built a factory out there—good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory….Now look. You built a factory and it turned into something terrific or a great idea—God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”—September 2011.
2. “People feel like the system is rigged against them, and here is the painful part, they’re right. The system is rigged.”—September 2012.
3. “Hardworking men and women who are busting their tails in full-time jobs shouldn’t be left in poverty.”—August 2013.
4. “Look around. Oil companies guzzle down the billions in profits. Billionaires pay a lower tax rate than their secretaries, and Wall Street CEOs, the same ones that direct our economy and destroyed millions of jobs still strut around Congress, no shame, demanding favors, and acting like we should thank them. Does anyone here have a problem with that?”—September, 2012.
5. “It is critical that the American people, and not just their financial institutions, be represented at the negotiating table.”—Summer 2009.
6. “Americans are fighters. We’re tough, resourceful and creative, and if we have the chance to fight on a level playing field, where everyone pays a fair share and everyone has a real shot, then no one—no one can stop us.”—September 2012.
7. “And that’s how we build the economy of the future. An economy with more jobs and less debt, we root it in fairness. We grow it with opportunity. And we build it together.”—September 2012.
8. “I understand the frustration, I share their frustration with what’s going on, that right now Washington is wired to work well for those on Wall Street who can hire lobbyists and lawyers and it doesn’t work very well for the rest of us.”—October 2011.
9. “If you’re caught with an ounce of cocaine, the chances are good you’re going to jail….Evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night.”—March 2013.
10. “Corporations are not people. People have hearts, they have kids, they get jobs, they get sick, they cry, they dance. They live, they love and they die. And that matters. That matters because we don’t run this country for corporations, we run it for people.”—September 2012.
11. “If there had been a Financial Product Safety Commission in place 10 years ago, the current financial crisis would have been averted.”—Summer 2009.
12. “Nobody’s safe. Health insurance? That didn’t protect 1 million Americans who were financially ruined by illness or medical bills last year.”—February 2005.
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