Democratic U.S. Senate candidate Shenna Bellows is calling on Republican Sen. Susan Collins to support a student loan bill before Congress. At a press conference at Bowdoin College today, Bellows said the bill would allow students to refinance their student loans at a lower interest rate. But it would also impose higher taxes on millionaires, which some say makes the idea little more than a political stunt.
Senior biology major Cali Davis will soon walk out of the University of Maine in Augusta with a diploma. But she'll also carry something else. "I am currently $45,000 in debt," she said.
Davis has accrued that debt over the last six years, beginning at the University of Michigan. She's had to take out different loans - but the one that offers the best interest rate caps the amount she can borrow at $35,000.
"Therefore, for the last two years, I've been forced to borrow through the Direct Plus Program, which is an interest rate much higher, that's fluctuated between a high of 7.9 percent and a low of 3.15 percent," Davis said.
Amid these high interest rates, the prospects of paying them off are slim. Davis thought majoring in a STEM field like biology would pave they way for a good job. But according to the U.S. Labor Department, the unemployment rate for last year's college grads is 10.9 percent.
"Jobs are scarce, particularly when you have no work experience and are competing against other graduates who have been able to afford to take unpaid internships and research positions," Davis said.
A bill proposed by Massachusetts Sen. Elizabeth Warren would allow students to refinance their loans at lower government rates. But this would create a hole in the federal budget. To plug it, Warren's bill would implement the so-called "Buffet Rule," which would tax millionaires at a higher income tax rate.
Maine Democratic Senate candidate Shenna Bellows says the student loan bill is the right thing to do, and Republican Sen. Susan Collins should support it.
"We need to confront this crisis head on," Bellows said. "We need to cut interest rates, we need to fund higher education, and we need to make sure that the interest rates aren't variable and don't continue to climb after young people graduate."
Bellows says Collins has already dealt students a blow by failing to support a recent bill to raise the federal minimum wage to $10.10 an hour.
"This vote did not just fail the 96,000 Mainers who would have been directly impacted by the vote, it particularly failed college graduates," Bellows said, "who, combined with the problems of student loans and rising interest rates, are trying to scrape together a living of just $7.50 an hour here in Maine."
But critics say Elizabeth Warren's student loan bill is little more than a political stunt, since it's unlikely to garner Republican support.
The Brookings Institution criticizes the bill because it doesn't pinpoint borrowers who need the most help. It points to a 2010 survey that found households with the largest outstanding debt are high-income households - meaning, it's those pursuing degrees for high income jobs like law and medicine that take on the most debt, and therefore, stand to gain the most from the bill.
The Brookings Institution points out that programs already exist to help struggling student borrowers - plans that cap payments, extend payment plans, and even offer temporary payment breaks.
Shenna Bellows says they're not enough, "because right now a third of the nation's students are falling into default, deferment or bankruptcy, and we really need to expand those options for them."
As student Cali Davis is poised to graduate, she says she's debating whether it's worth it to pursue her dream of a graduate degree in pharmacy. "In essence, going through a PharmD program now could potentially increase my student loan debt to $200,000," she said.
But a bachelor's degree, says Davis, is no longer enough to compete in the job market.
Susan Collins' spokesperson, Kevin Kelly, issued a statement saying the senator has successfully fought for funding for programs that support low-income, often first-generation college students. She supported a bipartisan law that lowered interest rates for education loans, and will continue her efforts to help make college affordable for all students.