Elizabeth Warren Plans To Bring Consumer Protection To Higher Education

Tuesday night Rachel Maddow had a couple of inspiring segments on her show dedicated to Elizabeth Warren and the release of her new book, A Fighting Chance. She included an inspiring interview, included above complements of YouTube. The next morning, Senator Warren and several of her colleagues from both houses of Congress sent this letter to Education Secretary Arne Duncan in support of changes to Title IV’s cash management rules, as she had indicated she would on Maddow's show the night before. The letter urges the Department of Education to protect students from unfair banking practices, including campus-sponsored debit cards with terms that are not always good for students, and to preserve the integrity of federal student aid programs.

In all 23 Members of Congress signed the bicameral effort. No Republicans or right-wing Democrats signed on.

• Elizabeth Warren (D-MA)
• Tom Harkin (D-IA)
• Dick Durbin (D-IL)
• Barbara Boxer (D-CA)
• Jack Reed (D-RI)
• Sherrod Brown (D-OH)
• Jeff Merkley (D-OR)
• Brian Schatz (D-HI)
• Edward Markey (D-MA)
• George Miller (D-CA)
• Louise Slaughter (D-NY)
• Peter Welch (D-VT)
• Chellie Pingree (D-ME)
• Alan Lowenthal (D-CA)
• Mike Thompson (D-CA)
• Julia Brownley (D-CA)
• Frederica Wilson (D-FL)
• Yvette Clarke (D-NY)
• Karen Bass (D-CA)
• Susan Davis (D-CA)
• Raul Grijalva (D-AZ)
• John Tierney (D-MA)
• Jared Huffman (D-CA)

Wouldn't you want to be able to look at a list like this and see that your senators and your Rep. are all on it? Patrick Hope, who's the progressive choice in northeast Virginia, has made it perfectly clear that he would be. "I agree with Senator Warren," he told us yesterday, "that our student loan system is completely broken when it is designed to profit off those students that the system is supposed to be helping. Here in Virginia's 8th district, we have one of the highest educated populations of any Congressional district in the United States-- and those parents are sending their kids to college in even larger numbers. Some of our local high schools have over 95% of students begin attending a four year college or university in the semester after graduating-- a statistic that is probably unmatched almost anywhere else in the world. Student loan reform is critical to ensuring that our next generation is not saddled with debt. As a Congressman I would strongly support the proposals Senator Warren has put forward."

Another Blue America backed candidate who supports Elizabeth is Stanley Chang of Honolulu who studied under her at Harvard. He shares her progressive vision for the future of America. Last night he told us about his own feelings when he watched the Maddow interview:

Senator Warren continues to speak with clarity and force on issues that directly affect American students. She is moving forward with a bold common-sense proposal to refinance high-interest student loan debt by closing tax loopholes that benefit billionaires.

I wholeheartedly agree with Senator Warren’s statement that "the way we spend our money as a country should reflect our values." There are few American values more important than education, and this means giving young people from all walks of life a chance to succeed. If students spend the early years of their careers paying off prohibitive debt, the boost they received from getting a college education will be overshadowed by their inability to afford starting families of their own.

Senator Warren’s vision for education will provide substantial relief for young people in Honolulu. Because of our high cost of living, students in Hawaii work while attending school at a much higher rate than the national average. Often they work two or more jobs and still manage to find time for classes. This proposal will help both students currently in school and graduates who are struggling to pay off their loans. An educated workforce is the key to diversifying Hawaii’s economy and securing the long-term prosperity of our islands.

My parents immigrated to Hawaii during a time when tuition was affordable and our economy was booming. They were nontraditional students who were able to work their way through school, become educators, buy a home, and provide extraordinary opportunities for their children. I want to give today’s young people and their children the chance to realize their dreams, and Senator Warren’s proposal goes a long way toward achieving this goal.

“Federal financial aid is there to help students. When colleges partner with financial institutions and push students into putting their federal student aid refunds into high fee accounts, it puts our federal investment at risk,” the members wrote. “Students should be able to make unbiased choices about the financial products that work best for them.” These are the specifics of what the Members were asking Secretary Duncan to make rules about:

1. Ensure students can easily deposit federal financial aid into their personal accounts without delay or penalty. Direct deposit into a student’s own account should always be an easy option.

2. Prohibit colleges from entering into a preferred relationship with a bank or financial firm to offer debit cards or other financial products that charge fees associated with the disbursement and use of Title IV aid.

3. Ensure that students receive neutral and unbiased information about how best to access their federal student aid.

4. Ban revenue sharing deals so that colleges select financial products based on their merits alone, not revenue to the college or other considerations.

5. Require that colleges post agreements with banks on their websites and annually report them to the government for review by relevant agencies, including the Consumer Financial Protection Bureau.

6. Ensure these new rules are applicable to any college-sponsored account into which Title IV funds are transferred or deposited.