Former College Fix assistant editor Robby Soave writes today for The Daily Caller:
Following closely on the heels of Massachusetts Democratic Sen. Elizabeth Warren’s recent proposal to subsidize student loans through the Federal Reserve, another senator is taking aim at student loan debt with a bill that would give a borrowers a huge break but leave taxpayers scrambling to make up the difference.
New York Democratic Sen. Kirsten Gillibrand introduced a bill this week that requires the Secretary of Education to offer borrowers the chance to refinance their loans at a flat interest rate of 4 percent. This would lower the debt obligations of 9 out of 10 borrowers, according to The Huffington Post.
“At a time when corporations, homeowners and even local governments are refinancing at historically low interest rates and saving millions of dollars, students and families who take out loans to pay for college are getting left behind,” said Gillibrand in a statement. “Ensuring that our graduates are not saddled with unmanageable debt by keeping interest rates low is just common sense.”
Such a break for students and graduates would come at a tremendous cost to taxpayers, however, since the current, higher interest rates generate a massive profit for the government. If rates are left unchanged, the Department of Education will make $51 billion off of student loans in the coming year.