Elizabeth Warren’s student loan proposal to utilize the overnight rate the Fed loans money to banks has been widely criticized even by some liberal commentators as a “cheap political gimmick.” [Note – link is to LI and is safe, some people are getting warnings]
There seems to be an emerging deal to lower rates, which rose recently, by tying them to the 10 year treasury Note rate.
Joe Manchin is one of the Democrats behind the deal, and it has infuriated Warren:
Via The Hill:
Liberal firebrand Sen. Elizabeth Warren (Mass.) blasted a fellow Democratic senator Tuesday as a dispute over student loan rates escalated divisions within the party.
The clash, which is highly unusual among party colleagues in the upper chamber, came at a private caucus meeting about a subject that is helping Republicans land blows against their Democratic opponents.
“Elizabeth came out very strong against Manchin,” said a Democratic senator who requested anonymity to discuss the exchange. “She said, ‘They’re already making money off the backs of students, and this adds another $1 billion.’”
Warren was referring to a deal Sen. Joe Manchin (D-W.Va.) and two other members of the caucus, Sens. Tom Carper (D-Del.) and Angus King (I-Maine), struck with Republicans to peg student-lending rates to the 10-year Treasury notes.
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When a very junior Conservative Senator, such as …..uhhhhhhhhh Ted Cruz, is outspoken, he’s labelled upstart, combative and boisterous. When a very junior Lefty Senator is outspoken, she’s labelled “a liberal firebrand” and “feisty”.
Man, I’m shocked.
(Yes, there is a ‘sarcasm’ tag here… you just can’t see it.)
Instead of using the ‘overnight rate’, Lieawatha should propose using the lending rate at the Bureau of Indian Affairs.
You realize that part of the interest payment in student loans goes to fund ObamaCare, don’t you?
Not making this up.
The Hill must be upset with Warren. Usually a lefty Senator is called a “moderate” or “centrist”.
“She said, ‘They’re already making money off the backs of students, and this adds another $1 billion.’”
Is she referring to the entrenched liberals in academia, that offer less and less in education value, but charge more and more? The banks make some interest but risk defaults, whereas the college gets the money up front, and spend more effort on leftist indoctrination than useful instruction.
Let the university take the risk then … they can take their payments from the incomes of the students, AFTER they get jobs at the promised pay grade. Those that end up working for less than their counterparts that skipped “higher ed”, should not have to pay, and perhaps be offered compensation from the university for damages.
Federal student loans and the overpriced higher education establishment: crony educationalism.
I’d go along with cheaper rates provided:
1) universities have to hold 3 to 5 percent of the loans issued — introduces discipline to the market
2) loans become dischargeable in bankruptcy (federal court, prove hardship) — when so discharged the banks, universities and feds share the pain
3) total amount of loans to a student are capped
4) total amount of loans available nationally that are subsidized by the feds are capped
Do that and I’m with you.
“Tin Lizzie” at it again, eh?
Another in the Massachusetts fold. Can we move Plymouth Rock, yet?
This is exactly what they did with the mortgage meltdown. They drove rates down and removed risk to the banks so that there was a moral hazard. Here they are doing the same by having the government assume all of the risk and giving students rates that are thus decoupled from risk.
This can only end in disaster and it does not surprise me that someone as disengaged from reality as Warren would not see the pitfalls here. She doesn’t cynically think this is a good gimmick to get votes. She is actually stupid enough to think it is a good idea. That is why Obama beat Hillary. She knew the stuff they were pumping was BS but Obama was to ignorant to understand that so he came off as being more authentic and sincere.
Economic literacy in this country is at an all time low so this sort of stuff sells.
Massachusetts had to get someone to take over from Bawny to take this country further down the road of financial doom.
Why is our government in the loan business?
And, I have yet to see a cent of ROI from all of my tax money I lent bailing out everyone’s ass.
“They’re already making money off the backs of students, and this adds another $1 billion.”
Hey, the government NEEDS that money; they’re trying to open a National Park on the moon.
Warren is against everything that is not fake…
“She said, ‘They’re already making money off the backs of students…'”
That’s pretty rich, coming from someone who until recently was being paid by Harvard $300,000 a year to teach ONE COURSE.
“Liberal firebrand?” How about “leftist fraud?”