Massachusetts Sen. Elizabeth Warren reintroduced the Bank on Students Emergency Loan Refinancing Act on the Senate floor on Wednesday. In doing so, she doubled down on a policy flip-flop that would make longtime Sen. John Kerry (also from Massachusetts) blush.
If passed, the 65-year-old first-term Democrat’s reintroduced bill would allow students who previously borrowed student loans at relatively higher interest rates — say, seven percent — to refinance at the lower rates current students enjoy.
Just as she did in 2013, Warren wants to pay for the refinancing scheme by soaking rich people with substantially higher taxes. (She would enact the contentious Buffett Rule).
Warren’s views on student loans appear to have changed considerably since she was a Harvard Law School professor about a decade ago, and since she became a favorite among progressives looking for a Democratic presidential alternative to Hillary Clinton.
In her 2003 book, “The Two-Income Trap: Why Middle-Class Parents are Going Broke,” Warren took a very dim view of an increased government role in funding higher education. She blamed colleges and universities for out-of-control tuition increases.
More government funding would provide colleges with more cash and more reasons to spend it extravagantly but do nothing to limit rising costs for students and parents, Warren the professor argued.
She called for a freeze on tuition prices at taxpayer-funded schools. She also suggested that taxpayers and poor and middle-class student shouldn’t be on the hook for higher tuition because colleges and universities want to have big-ticket athletic programs, shiny engineering departments and the like.
“Offering these families more debt is like throwing rocks to a drowning man,” Warren wrote during the presidency of George W. Bush, according to The Boston Globe.
College tuition prices have continued to skyrocket since Warren counseled fiscal restraint among college administrators.
One significant change has occurred these last dozen years as well. In 2010, President Barack Obama signed legislation forcing private lenders out of the government-guaranteed student-loan industry. As of July 1, 2010, the U.S. Department of Education makes 100 percent of such loans.
Concerning the reintroduction of her Senate student loan bill, Warren has stressed that student-loan borrowers by the score are falling behind on loan payments. (RELATED: Student Debt-Laden College Grads Under 40 Have $8,700 Median Net Worth)
“They are watching their loan balances get bigger, not smaller,” Warren told The Republican, a Springfield, Mass. newspaper, last week. “We’re back with this bill because we have to refinance student loans. Students are now struggling with $100 billion more in debt than a year ago. There’s a total of $1.3 trillion in student loan debt that is crushing people.”
“The federal loans produce obscene profits for the federal government and the biggest banks on the private side,” the progressive Democrat told The Boston Globe.
Given the currently-reduced number of Democrats in Congress, the chances for actual legislative success were likely greater in 2013 when Warren’s student-loan refinancing bill had its first go-round. (RELATED: Remember When Obama Was The Messiah?)
While many liberal Democrats supported Warren’s bill in 2013, the bill also faced considerable opposition, notes U.S. News & World Report.
Critics said refinancing student loans with higher taxes will do nothing to resolve the structural problem of perpetually rising tuition costs — exactly the problem Warren identified in 2003 before she became a favorite of progressive Democrats.
Warren refused to vote in favor of a compromise bill in 2013 that likely would have passed the famously divided upper chamber. The compromise bill would have allowed student loan interest rates to fluctuate with caps ranging from 8.25 percent to 10.5 percent.
The 65-year-old rookie Senator argued that the compromise, supported by Democrats Dick Durbin of Illinois and Joe Manchin of West Virginia, didn’t push interest rates low enough.
“It’s what a lot of her constituents want to see,” Matthew Chingos of the centrist-to-liberal Brookings Institution told Boston public radio station WBUR two years ago. “And it has a nice ring to it if you don’t know anything about how interest rates work.”Sen. Machin, in particular, wasn’t happy with Warren’s antics. He remains unhappy.
“Sooner or later, you have to go produce something,” the moderate West Virginia Democrat Joe Manchin told Politico Magazine this month. “You gotta say, ‘I did something.’ It’s one thing to just keep throwing the red meat out there and say, ‘Boy, I fed the lions today. They’re happy.'”
On Sunday, the grimly progressive Boston Globe published a small armada of glowing opinion section pieces urging Warren to run for president in 2016.
“Warren would be a credible threat to Clinton in the primaries,” plainly declares one.
“If Warren did join the race, she would take the party rank-and-file by storm. There is a hunger for a candidate who can articulate all the frustrations felt by middle- and working-class people, and especially by the young,” says another Globe op-ed concerning the senior citizen Massachusetts Senator.
“MoveOn.org members voted in December to launch Run Warren Run,” notes a third Globe piece. “Large majorities of likely voters who identify as independent and Republican in battleground states support Warren’s agenda,” the author, MoveOn.org executive director (and former community organizer) Anna Galland, also claims.
“The gap between the Facebooks and Googles of America and the rest of the economy has grown too large,” the Globe’s editorial board writes.
The Globe is owned by John W. Henry, a man with a net worth of $1.63 billion.