The first bill Senator Elizabeth Warren ever filed had to do with student loans: Last year, she proposed offering new student loan rates that were as eye-catchingly low as the rate that the Federal Reserve charges banks for short-term lending. That bill, a bit of political theater, went nowhere. Now Warren is back with a new — and more modest — proposal that would allow many people to refinance existing student loans at lower rates.
Warren says her bill would affect millions of Americans. She has won support from President Obama, who yesterday signed a separate executive order expanding access to alternate student loan repayment programs. But Warren’s bill is also endorsed by groups like the Massachusetts Mortgage Bankers Association, whose leaders understand that student debt has grown so burdensome that it’s keeping young people from buying homes.
Critics point out that Warren’s bill won’t do everything, least of all address rising college costs. Banks will chafe at a mechanism that would allow the government to buy back private loans, eliminating private lenders’ profit on future interest payments. And Senate Republicans are highly unlikely to accept Warren’s tax proposals for making up lost revenue. Indeed, some speculate that the bill is little more than a sacrificial lamb, designed to make Republicans look callous ahead of mid-term elections.
Still, Warren’s supporters believe there’s hope for compromise. Last year, they point out, after Warren’s discount-rate bill foundered, many Republicans supported a bipartisan measure to lower future student loan rates to market levels. Warren voted against that measure, saying those rates were too high; she argued that the government should issue student loans at cost. So Warren’s current proposal could be seen as a tentative olive branch.
At any rate, there’s one surefire way to keep this bill from becoming another casualty of D.C. rhetoric. The bill is expected to come up on the Senate floor on Wednesday, where threat of a filibuster looms. Republicans could, instead, allow debate to move forward, leading to a discussion of more mutually acceptable solutions, and continuing a productive conversation on a topic that’s important to millions of Americans.