The federal government must take steps to alleviate the burden of student loans on people across the nation—both for the sake of the borrowers and to keep the American economy thriving, said Sen. Elizabeth Warren (D-Mass.) in a speech during a two-day research symposium on student loans held at Suffolk University Law School April 11-12.
She also lauded Suffolk Law for convening the symposium with the National Consumer Law Center.
“Suffolk is a place that takes consumer law very, very seriously,” said Warren. “Suffolk Law School is doing amazing work in this area, and I just want to say thanks.”
In her talk on Investing in Students: Eliminating Profit from the Federal Student Loan Program, Warren spoke about the difficulties borrowers face in paying off loans.
“Nation’s most powerful debt collector”
She said that borrowers’ strife has become especially difficult since Congress stripped away bankruptcy protection on federal and private student loans, and she discussed fees and wage garnishment.
“Those who struggle to pay federal student loans find themselves up against the nation’s most powerful debt collector: the federal government,” Warren said. “More and more, students find themselves drowning in debt.”
Adverse economic impact
But it is not just the borrowers’ struggles that concern Warren. She said that rising student debt can have a negative impact on home ownership, and borrowers’ inability to pay back loans has had an overall adverse impact on the nation’s economy.
Warren offered recommendations for changing the student loan culture, by:
- Asking colleges and universities to take more responsibility when a student defaults on a loan
- Ending the practice of profiting from student loans
- Reinstating bankruptcy protection for student loans
- Refinancing student loans so borrowers see some of the money instead of financers
- Looking into ways to lower overall college tuition
“Tying students to a lifetime of financial servitude as a condition of getting an education does not reflect our values,” Warren said. “These students didn’t go to the mall and run up a bunch of credit cards; they worked hard to learn new skills that will help build this country, build a stronger middle class and a stronger America. They deserve our support, not an extra tax.”
Warren also suggested that the federal government work with borrowers. She said that the interest collected on student loans goes to the federal government rather than to financial aid programs.
“The idea that we would use student loans as a way to profit the general government is obscene,” Warren said.
Investing in the future
“I grew up in an American that invested in kids and their futures. It was an America that believed that when we help our kids get an education, that’s good for the kids; that’s good for the families; but it’s also good for America,” said Warren, who noted that she paid $50 a semester for tuition at a commuter school. “I believe those are still our values, but our policies have diverged. Our job is to pull those two things back together.”