Sen. Elizabeth Warren (D-Mass.) has some heavyweights supporting her first bill to set student-loan interest rates at the same level that big banks receive. This comes at an especially significant time just as Republicans in the House try to thwart her plans.
On Thursday, her website posted an update with a long list of the bill's supporters, who are joined by one million citizen petitioners who have also endorsed the act. Rep. John Tierney (D-Mass.), who co-introduced the bill in the House, and Sen. Warren have garnered the robust support of Senators Mark Begich (D-Alaska.), Barbara Boxer (D-Calif.), Mary L. Landrieu (D-La.), Claire McCaskill (D-Mo.), Jeff Merkley (D-Ore.) and John D. Rockefeller, IV (D-W.Va.) as co-sponsors.
Sen. Warren also counts powerhouses such as the Massachusetts Institute of Technology and the American Federation of Teachers among the supporters of the bill.
Warren's bill has gained excellent within its first three weeks, especially since it seems the House GOP has other plans. On Thursday, the House approved a Republican proposal that would allow interest rates on federal student loans to fluctuate with the government's cost of borrowing.
The proposal, passing on party lines at 221 to 198, would end the system that allows government to fix the rate. This would effectively create an environment where Warren's bill could not be implemented. Warren slammed the Republican proposal in a statement, saying, "The student loan bill passed by House Republicans takes a bad situation and makes it worse."
The student loan debt crisis is the biggest financial issue facing millennials today, with the average student debt now at $25,000. Sen. Warren's Bank on Students Loan Fairness Act aims to stop student loan interest rates from doubling on July 1 to 6.8%.
This is nine times greater than the 0.75% rate that "too big to fail" banks receive when they borrow from the Federal Reserve. Warren's act would provide students with that same 0.75% interest rate on federal loans.
The Department of Education will be making $51 billion in profits from student loan borrowers this year. This is a 43% increase from the department's estimate from three months ago, and as Sen. Warren describes in an op-ed for Boston Globe, "more than the annual profit of any Fortune 500 company, and about five times Google’s yearly earnings."
The Republican proposal is unlikely to pass the Democrat-controlled Senate and has already been threatened with a veto by President Obama. Nonetheless, Warren clearly has a tougher battle ahead to pass this bill. As the infographic below shows, time is definitely running out.