Should the United States Congress pass the S.2432 Bank on Students Emergency Loan Refinancing Act because of the constantly rising student loan debt that is affecting millions of college students trying to find and create jobs for the future and stimulate the economy, or should the United States Congress not pass the Bank on Student Emergency Loan Refinancing Act because the federal government should not be as involved in private student affairs, instead letting the private sector take over, and because passing the bill would lead to a tax rate increase for higher-wealth citizens?

Justin Tran

­­­ EAPPSSA Block 4
Mrs. Polski
December 16, 2014

Introduction The price for education is rising, and so is the number of students in financial ruin. There are currently over 40 million people living in America who have student loan debt (McCarthy par. 1). 40 million out of 310 million people is a pretty hefty chunk of the U.S. population. Take for example Alice. Alice is a 50-year old woman with a Ph.D. in sociology. She worked hard for an education by staying in school and eventually received a prestigious degree and an ensuing teaching job at a local college. Upon graduating, she had a total of $70,000 in student loan debt – not too substantial considering the years of schooling she went through. This was twenty years ago. Flash-forward to 2014 and Alice now owes $270,000 in student loans (Best par. 2). Alice’s total amount of debt has nearly quadrupled in twenty years. As Alice is struggling to pay off her debts from twenty years ago, 35 year old Simon is just beginning his painful journey into the loan repayment process. After graduating from UCLA with a bachelor’s degree in communications, Simon moved back to his hometown of Sacramento, California. Looking for a job in anything other than education, he ended up working at gas stations, fast food restaurants, and foster homes. Simon never knew how the student loan process really worked; he was just told that if he goes to college, he will get a good job. Unfortunately, Simon is now nearing bankruptcy and is losing hope for the future. “I hope my ‘American Dream’ I thought I was building in the mid ‘90’s somehow miraculously comes to me somehow, someway…” he says (“Project on Student Debt…” 1).
The troubling part to both of these stories is that they are not alone. Millions of people are in their own way Alice and Simon, each struggling to pay off their student loans. A bill has been proposed in Congress by Massachusetts Senator Elizabeth Warren that is designed to help people like Alice and Simon with their student debts. This bill is called the Bank on Students Emergency Loan Refinancing Act (S. 2432) and it is designed to allow borrowers with older student loans to refinance them at the new 2013 rates. While it is true that student loan debt is crippling to individuals, some experts say that students are not the problem; the system is the problem. While the “Alices” of America are certainly a big problem, there may be other issues at fault. The federal government provides student loans at varying rates depending on the type of borrower and the time of disbursement. The government profits from student loans with an estimated $50 billion dollars in revenue from 2013 alone (McCarthy par. 10). Elizabeth Warren’s bill may not be the solution. Opponents of the Student Emergency Loan Refinancing Act argue that the bill could do more harm than good to student debts. In order to finance the bill, it would increase taxes on individuals and businesses making over $1 million under the “Buffett Rule,” named after businessman Warren Buffett who supports this rule (Needham par. 1). Conservatives typically dislike tax increases, and the Democratic-sponsored Refinancing Bill strongly goes against many Republican beliefs. Many people also believe that it is the federal government’s fault for creating such high college tuitions. The increase in college tuition could be due to the