It's no secret that banks pay ridiculously low rates to borrow money (currently 0.75%, based on the discount rates banks pay to the Federal Reserve). At the same time, college students pay considerably more in interest (3.4% for subsidized loans and 6.8% for unsubsidized) when they borrow money for school under the feds direct student loan program.

Imagine that. Big banks -- the folks who brought our nation's economy to the brink -- get a most favorable, nearly unheard of rate from the feds, while students -- America's future -- get, well, the shaft.

Add to this the fact that, unless Congress acts, and acts fast (when was the last time they did that), those interest rates on subsidized student loans will rise from 3.4% to 6.8% this summer.

Enter Senator Elizabeth Warren (D-MA), who recently introduced a bill in the Senate to drop the student loan interest rate to that which banks pay to borrow from the government, this for a period of one year, while the feds (hopefully) hammer out a long-range plan for student loans.

READ, Elizabeth Warren introduces bill to shrink student loans rates for one year

Some of us remember when interest on student loans hovered around 1%, and payback was nary a burden. [Of course, some of us also recall when gas was 32 cents a gallon. Another story for another post.] How wonderful it would be to roll back rates on student loans, giving students that well deserved jump start on economic freedom, not to mention equal footing with the likes of CitiBank and Chase.

Believe it or not, student debt -- over one trillion dollars of it -- is now the second highest form of debt (mortgage debt being number one) in America. The impact upon our nation's economy, with young people reluctant, or unable to take out car loans or home mortgages, is substantial. And the impact upon family finances, from retirement accounts to putting food on the table, is often devastating.

Let's not forget that while banks borrow at 0.75%, they have no problem charging what would be, if you and I did it, usurious rates on credit cards (12%, 18%, more), as well as all kinds of fees simply for using your own money. 

We need to take back credit in America, and give college students who must borrow money to go to school, if not a fresh start, then, certainly, a less onerous beginning.

Does the Warren bill have a chance in Congress? Well, look at it this way. If our representatives can't make any reasonable and responsible headway on such critical issues as gun control, immigration, and the sequestration, what hope is there for saving college students from a lifetime of indebtedness? 

Still, Congress is supposed to represent us -- We, the People. Not the special interests with the big money. Not the big banks. Not the NRA. Not the Norquististas.  We, the People. That, we presume, would include our children and grandchildren. The stakeholders of America's tomorrows.

The College Whisperer encourages readers to contact their representatives in Congress, urging them to consider and pass Elizabeth Warren's bill to lower the interest rate on student loans.

Plan. Prepare. Prevail!

The views and opinions expressed in this blog are solely those of The College Whisperer.

Who knows what peril lurks in the college application and admissions process? The College Whisperer knows. . .

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