Sen. Elizabeth Warren (D-MA) Discusses Her Book at the AFL-CIO  ...2 of 3 >
May 2, 2014 - Sen. Elizabeth Warren (D-MA) read several passages from A Fighting Chance and then took questions.  She started out with a personal story recounting how when she was growing up,

"...we came right to the edge of losing our home.  My mother was 50 years old when she took her best dress out of the closet and pulled it on, put on her high heels and walked over to the Sears to get a minimum wage job.  And I'd just like to stop and point out.  Back in  the 1960s a minimum wage job would keep a family of three afloat, and that's what it did for us."

Describing the book Warren said,

"What this book is about it, it's about a personal story, because I believe it's about America's story—about what we were, about what's happened to us and about where we're headed.  It's also a story, though, about fights...  It's a story about fights over whether or not families who've been laid low by medical problems and job layoffs and a family break up or a death in the family will have a chance to right themselves economically.  It's about fights with the banks over the giant bailout.  It's about fighting to get the consumer agency and ultimately it's about fighting for a place in the United States Senate."

Further, she said

"The game is rigged. The rich and the powerful have lobbyists, have lawyers, have good friends in Congress.  Everyone else, not so much.  So this is how I think about it.  We can whine about it.  We can whimper.  Or we can fight back.  Me, I'm planning to fight back."
Among the questions Warren fielded was one on student loans, which elicited a passionate and detailed response:

"Let's make sure everybody's on the same page about where we are on student loans.  There's now $1.2 trillion in outstanding student loan debt.  Think about that.  There is more student loan debt outstanding than any other form of debt in America except for mortgages.  So more than credit card debt, more than car loans is student loans.  We have seen a huge run up in student loans.  Last year 71-percent of college seniors had student loan debt.  Think about that.  So we've got a huge amount of student loan debt; that's part one.

"Part two, it's starting to hit the economy.  So the Fed has turned out a report on this.  The CFPB has been talking about this.  Young people are not buying homes at the predicted rates, they're not buying cars, they're not starting small businesses, they're not getting married.  I mean we're just watching piece after piece.  They can't save for retirement.  Young people are not moving into their economic lives, and part of the reason for that is the student loan problem.  They've got these huge student loans outstanding.  So that's the second part.  It's starting to affect us all.  We have a housing industry that's having more trouble recovering because not enough young people— more young people are living at home with their parents and not moving out into apartments and into homes.

"But the third part, the United States government offers to help those young people who can't afford to pay for college and then charges them a rate that covers the cost of the moneyxxas it should, the administrative costs, bad debt losses—and then for undergrads nearly doubles that, for graduate students nearly triples that so that the student loan program is producing tens of billions of dollars in profits off the backs of our kids going to school.  That is obscene.  That is obscene.

"So what can we do?  The answer is we need to refinance the student loan debt.  And I'll just give you two quick ideas about refinancing it that we may be talking about VERY SOON.  Okay, said all in caps.

"One, is, you know students can't refinance their loans.  I don't know if you know this.  But you know anybody who's got a home, now that we're in historically low interest rates, homeowners have been able to refinance their mortgages.  People with car loans have refinanced.  Businesses have refinanced.  Shoot, townships, governments have refinanced their loans.  Everybody except students, because they are barred by law from refinancing that debt.  So we've got kidsxx  Some people are looking at me with mouths agape.  Exactly right.  Students who are out there on student loans at 7-percent, there are some at 8-percent, at 9-percent, 10-percent.  I always like it, people nod when I hit; you can now when I hit your percentage, 11-percent, right. 

"So the idea is we need to refinance student loans.  Just last July, the United States Congress voted and the President signed into law a bill that said for new borrowers the proposed interest rate was way too high and we were going to bring it down.  It's 3.8 percent for undergrads; it's over 4 for a grad.  My view is if that was what Congress said, that that is the right interest rate for new borrowers, then it's the right interest rate for everybody who borrowed money to go to school and that's where we're going to refinance.  That's where we're going to refinance.

"And let me just give you one more piece if you'll let me Rich, I know these are long answers, but I love this stuff.  One more piece.  How are we going to pay for it?  We're going to pay for it with the Buffett Rule.  Think about it.  We've got billions of dollars right now that is flowing out of the Treasury on loopholes for people who make millions of dollars a year, billions of dollars a year.  The Buffett Rule plugs those loopholes and the idea is we take all of that money and use it to bring down the interest rate on student loans.  That way America can make a choice."
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