debacle if it cared
This graph from the Fed speaks volumes about the extent of the student loan bubble … and the trend is ever skywards. Click image to enlarge.
MILLIONS OF THOSE WITH student loans are in for a nasty surprise today – thanks to our dysfunctional Congress.
Today is the day that student loan interest rates increase dramatically.
It need not have happened.
If the Senate and House had approved the bill by freshman Sen. Elizabeth Warren (D-Mass.), it would have alleviated the problem way back when she first introduced it in May.
Instead, those dolts did nothing.
It just goes to show how dysfunctional Congress really is. How much worse can it get?
VIDEO BELOW THE FOLD
READ MY MAY 16 post Elizabeth Warren introduces bill to stave off financial ruin for many.
It’s not as if nothing could have been done.
Just last week, a representative of the Federal Reserve Bank warned that lack of action could damage the national economy.
Sen. Elizabeth Warren from Massachusetts presents her new bill to the Senate on May 8.
Writing in the Daily Caller, Giuseppe Macri reported on testimony given to a Senate committee in the story Fed warns Congress of danger in doubling student loan rates
“Federal Reserve regulators warned a Senate committee Tuesday that allowing student loan interest rates to double on July 1 could jeopardize the nation’s economy,” Macri wrote.
“Without congressional action, interest rates on federally subsidized Stafford loans will double from 3.4 percent to 6.8 percent Monday [today] — a change that will likely result in borrowers moving from government subsidized loans to private sector loans, said Todd Vermilyea, senior associate director with the Fed’s banking regulation division.”
Sen. Warren’s bill, the Bank on Students Loan Fairness Act, would allow students who are eligible for federally subsidized Stafford loans to borrow at the same rate that big banks get through the Federal Reserve discount window.
That rate is currently south of 0.75 percent!
In her address to the Senate, she added:
“The Bank on Students Loan Fairness Act is my first standalone bill in the United States Senate. I’m introducing this bill because our students are facing a crisis. We cannot stand by and simply watch.”
Macri added the following to his Daily Caller article:
“Post-secondary education is becoming increasingly expensive. With continued increases in student debt, and high levels of unemployment, recent graduates are finding it more difficult to repay their obligations, resulting in elevated delinquency and charge-off rates,” Vermilyea told the Senate Committee on Banking, Housing and Urban Affairs Tuesday.
“The student debt problem in this country is a quiet but growing crisis,” said the Senator from Massachusetts who thoroughly trounced Republican Scott Brown last November.
“Today’s graduates collectively carry more than $1 trillion in debt – more than all the outstanding credit card debt in the whole country.”
The fact that millions of student loan borrowers will suffer serious financial setbacks, doesn’t seem to concern our representatives. After all they don’t need the money.All they care about is raising funds for their next reelection campaign.
It is tragic.