Updated: December 7, 2013 4:50PM
Sen. Dick Durbin announced on Tuesday that he would introduce a bill to protect college students from private loan sharks. This comes after Durbin helped kill Sen. Elizabeth Warren’s proposal this fall to let students borrow from the federal government at the same rate as the big banks, 0.75 percent. Rather than actually help students suffering under ballooning debt, Durbin’s bill would undercut more progressive efforts with a paltry transparency measure.
Requiring transparency will have no effect on the skyrocketing interest rates. Indeed, the whole proposal is premised on the misguided assumption that the primary reason students take on heavy burdens of debt with absurd interest rates is because they don’t have enough information. That’s simply false.
Students seeking a college education are investing in their future. They take on debt not because they are ill informed, but because lawmakers like Durbin have refused to improve federal student loan programs, leaving them no other choice than to turn to private lenders.
That’s what happened to me. My parents struggled to get by. I saw them look for jobs that paid a living wage and come up short over and over. College seemed like the only way I could have what my parents yearned for: a good job, a house, someday kids — the American Dream.
But at the end of my first semester, I was short on money and my Catholic university told me that unless I came up with $5,000, I couldn’t register for classes. So I was forced to find a private lender who gladly gave me the money at an 11 percent interest rate. Did I know this was insane? Yes. But I was desperate to get back to classes and achieve my dreams.
If Durbin actually wants to help students, here’s what his bill should do:
(1) Reintroduce Warren’s plan to let students borrow from the federal government at 0.75 percent, the same rate we already give to big banks.
(2) Push for an expansion of government-subsidized loans, so that students don’t have to turn to private lenders; after all, college students want to invest in their future and we should want to invest in it, too.
(3) Propose real limits on how much interest private lenders can charge — it’s simply nuts that a private lender can charge 11 percent on student loans;
(4) Make it easier for students like me, overburdened by debt and underpaid in a weak economy, to file for bankruptcy and get a fresh start.
If Sen. Durbin wants his constituents to care about his re-election, then he should show them he actually cares about making a difference for them in Washington.
Amanda Weaver, who lives in Rogers Park, graduated last spring from Loyola University. She works as a community organizer at Northside POWER and serves on the steering committee of The People’s Lobby.