Warren: It's 'just plain wrong' to make 'obscene profits' on student loans

Warren said she supports the Keep Student Loans Affordable Act would extend the 3.4 percent rate for need-based loans for one year and would be paid for by ending a tax break on tax-deferred retirement accounts. That bill, S. 1238, is expected to get a vote in the Senate later this week.

On July 1, need-based student loan rates doubled from 3.4 percent to 6.8 percent.

“Congress can ease the burden on our students and we should be committed to doing just that,” Warren said. “This is how we build a better future for our entire country.”

But Republicans and a couple Democrats have argued that a permanent solution would be better than a short-term rate extension.

Sens. Joe ManchinJoe ManchinOvernight Healthcare: Public support mounts for action on opioids Clinton slams convicted ex-coal chief West Virginia Dem defends Clinton support despite coal remarks MORE (D-W.Va.), Richard BurrRichard BurrThe Trail 2016: The establishment comes around Intel leaders push controversial encryption draft Moulitsas: 2016 dim for GOP MORE (R-N.C.), Tom CoburnTom CoburnGOP faces existential threat Sanders tops 2016 field in newly deleted tweets The Hill's 12:30 Report MORE (R-Okla.), Lamar AlexanderLamar AlexanderDemocrats block energy spending bill over Iran amendment Overnight Finance: Puerto Rico pressure builds; Big tariff vote Wednesday Senate votes to increase wind energy funding MORE (R-Tenn.), Angus KingAngus KingCapitol Hill’s forest champions helped secure win for wood The Hill's 12:30 Report Merkley becomes first senator to back Sanders in White House bid MORE (I-Maine) and Tom CarperTom CarperLobbying World Senators urge White House to speed cyber policy updates Retailers battle financial sector over data breach legislation MORE (D-Del.) introduced a bipartisan bill similar to something House Republicans passed last month. The Bipartisan Student Loan Certainty Act, S. 1241, requires that, for each academic year, all newly issued student loans be set to the U.S. Treasury 10-year borrowing rate plus 1.85 percent for undergraduate loans. The interest rate is capped at a consolidated rate of 8.25 percent. 

Warren said that bill increases federal profits from student loans at the expense of struggling college students and middle class families.

“The government is making obscene profits on these loans,” Warren said. “This is just plain wrong.”

Warren argued that a one-year fix was necessary for lawmakers to have enough time to address the drivers of increased tuition costs and existing student loan debt in the reauthorization of the Higher Education Act.

It’s unclear if Senate Majority Leader Harry ReidHarry ReidMellman: Give positive a chance Koch network super-PAC launches ad buys in Wisconsin, Nevada Trump: 'I'd have to think about' Cruz for Supreme Court MORE (D-Nev.) will allow a vote on the bipartisan bill, but a vote on the motion to proceed to the Democratic bill introduced by Sen. Jack ReedJack ReedTroops question rules for ISIS medal Bill would target retaliation against military sexual assault victims Pentagon: Russian military support for Assad remains strong MORE (D-R.I.) could be as soon as Wednesday.

Last month, the Senate attempted to pass similar legislation that would have extended the 3.4 percent rate for two years but there wasn’t enough support to overcome the Republican filibuster requiring 60-votes to advance the bill.

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