Dem Sen. hopeful Warren: Stop student rate hike
BOSTON—Democratic U.S. Senate candidate Elizabeth Warren is calling on Congress to act ahead of a July 1 deadline to block a planned doubling of student loan interest rates -- part of a wider effort by Democrats to press Republicans on an issue they hope will resonate with financially-strapped families.
Warren, who is challenging Republican U.S. Sen. Scott Brown, said allowing the interest rates to climb will add another burden to students seeking higher education.
"Congress must act now to stop the increase in these student loan interest rates," Warren said in a news release Monday. "Too many students are already struggling to pay the bills."
Rates on the popular federal Stafford loans for low- and middle-income undergraduates are set to double from 3.4 percent to 6.8 percent.
Brown said he also supports holding the line on interest rates for students, but said the financial problems facing students go far beyond just interest rates.
Chief among them, he said, is finding a job.
"What's the real problem is the fact that you have many people who are getting out of school with a tremendous amount of debt who are then unemployed or underemployed," Brown told reporters Monday. "It's upwards of half, that's really the real issue."
Congress, then led by Democrats, voted in 2007 to cut the interest rate in half over four years, allowing it to become an election-year issue in 2012.
The cost of keeping the interest rates frozen could come to $6 billion a year. It's unclear how that cost would be paid.
Democratic President Barack Obama has also been pushing Congress for the extension. He's planned a three-state swing this week to warn students of the potential financial troubles they will face if the interest rates double.
The White House is asking for a one-year extension of the lower rate instead of a permanent fix.
On Monday, presumptive Republican presidential nominee Mitt Romney also said he supports a temporary extension of lower student loan interest rates.
Warren tried to tie the student loan issue to the release of a new 30-second television ad the campaign released on Monday in which Warren blames Washington for not doing enough to help students while stressing her own modest roots in "a family hanging on by our fingertips to a place in the middle class."
"Today, Washington lets big corporations like GE pay nothing -- zero -- in taxes, while kids are left drowning in debt to get an education," Warren said in the ad.
The message is an attempt to push back against Brown's efforts to portray Warren as an out-of-touch elitist. Warren is a Harvard Law School professor and a consumer advocate.
Brown's campaign renewed that theme on Monday, saying Warren should look to what the campaign called "exorbitant salaries and compensation packages" for teachers and administrators if she wants to lower tuitions.
"Elizabeth Warren's hypocritical attitude continues this week as she lectures Massachusetts voters about affordable college tuition rates while collecting a salary from Harvard sufficient to finance more than nine students' annual tuitions," said Brown campaign manager Jim Barnett said in a news release.
Warren was paid $429,981 as a Harvard law professor from 2010 to 2011 and got nearly $134,000 in consulting fees on legal cases in 2010.
Brown earns about $174,000 as a U.S. senator.
"It's nice obviously to tackle the interest rate on student loans, but we've got to get costs under control," Brown said. "There's a much larger picture that we need to address."
Brown and Warren are locked in a tight race that is already well on its way to becoming one of the most expensive Senate contests in the nation this year.
As of the end of March, Brown's campaign had about $15 million in his re-election account, compared with the $11 million in Warren's election fund.