The Brookings Institution might have been a little harsh on Senator Elizabeth Warren’s plan to reduce student loan interest rates:
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Sen. Warren’s proposal should be quickly dismissed as a cheap political gimmick. It proposes only a one-year change to the rate on one kind of federal student loan, confuses market interest rates on long-term loans (such as the 10-year Treasury rate) with the Federal Reserve’s Discount Window (used to make short-term loans to banks), and does not reflect the administrative costs and default risk that increase the costs of the federal student loan program.
No doubt Brookings scholars, Matthew M. Chingos and Beth Akers, overlooked the fact that of course it is a political gimmick. And probably not all that “cheap” in the long run.
Question is … will it fly in Congress?