At the Politico conference, financial adviser and Senator Elizabeth Warren (D-MA) attacked banks for making onerous student loans that hamper the ability of young people to get a solid start on life after college.
Suze Orman said, “The kids today, they don’t have money, and they have not been educated about how important it is to pay their student loans … so why are we protecting private banks who are financially raping, and I say that word truthfully, our children?”
Senator Warren, who would not answer questions about a possible Presidential run for 2016, said, “Washington works for those who have money and power, for those who can hire armies of lobbyists and lawyers.” The Senator discussed a student loan reform bill she had proposed, but had been blocked by a Republican filibuster. The bill would allow students to refinance their current loans with today’s lower interest rates, with an interest cap of 4%. Currently, interest rates on the federal Stafford loans are 8%, and for private loans, up to 14%. Student indebtedness hurts the economy, argued Orman and Senator Warren, because it prevents young adults from making purchases of a home or a car that will stimulate the economy.
Creditors for student loans are particularly unforgiving; those who still carry student loans when they retire will have their Social Security garnished, “Your social security check gets garnished!” exclaimed Senator Warren, and the debts are likely to be passed on to one’s next of kin if a person carries student loans to their grave.