- Senator Elizabeth Warren spoke at the National Association of Realtors' midyear conference today to drum up support for a student loan refinancing bill.
- Warren said the bill would help more young people become homeowners and boost the housing market by allowing them to refinance at lower rates.
- NAR Chief Economist Lawrence Yun said student loan debt delays homeownership for about five years.
WASHINGTON — Senator Elizabeth Warren, a Democrat from Massachusetts, spoke at the National Association of Realtors’ midyear conference this morning to urge Realtors to support a bill that could help student loan borrowers enter the housing market.
Warren took the stage amid cheers and a standing ovation from the crowd.
The burden of student debt
“Last year, seven out of 10 college graduates had to borrow money to make it through school,” Warren told attendees of the Realtors Legislative Meetings and Trade Expo.
“We are pricing people out of the foundational pieces of the middle class. This debt is crushing young people. Student debt is weighing down young families and it threatens our economy.”
“The data show that student loan burdens have increased and as they have increased fewer and fewer young people are buying a home and that means that some of them, who knows how many, may never be able to buy,” she added.
Earlier in the morning, NAR Chief Economist Lawrence Yun told attendees that student loan debt is leading to a homeownership delay of about five years.
Job growth is strong, rents are soaring and mortgage rates are historically low, but flat wage growth, lack of available starter homes and rising student loan debt is keeping a “moderate” housing recovery from becoming stronger, he said.
Low mortgage rates don’t always translate to home purchases
Because of low mortgage rates, today’s prospective homebuyers are the luckiest in a generation, Yun said.
“Emphasize that. But they’re not so lucky at becoming homeowners. The homeownership rate is the lowest in 50 years,” he said.
‘We should be investing in young people’
Warren urged conference attendees to support legislation she introduced in June 2014, the Bank on Students Emergency Loan Refinancing Act. The bill would allow eligible borrowers to refinance their federal and private student loan debt at the same low rates offered to new borrowers in the federal student loan program.
“When interest rates are low, homeowners can refinance their loans so they can reduce their interest payments. Even governments can refinance. But not so student loans. The government prohibits it,” Warren said.
“Congress has set interest rates on student loans so high that the government is making billions of dollars in profit off the backs of these students,” she added.
The federal government is projected to make $66 billion on student loans issued during 2007-2012, Warren said.
“That is obscene. It is wrong for the U.S. government to do that. We should be investing in young people trying to get an education. Not treating them as profit centers.”
She praised Realtors for their role in fostering homeownership and asked them to continue their advocacy.
“If you want to see more young people live the dream of homeownership … if you want to breathe new life into housing markets … then support our student loan refinancing bill,” Warren said.
“The reason I’m here today is to ask for the support of NAR to support this bill. And as I came here today, I was told that NAR will support this bill.”
Attendees clapped and cheered at the announcement.
“I’m one of those kids who grew up in a family where I was not going to college, but I really wanted to be a teacher,” Warren said.
“I was lucky. I grew up next to a commuter college that only cost $50 a semester and went to a law school that only cost $500 a semester.
“So the daughter of a janitor had a chance to be a teacher and then a lawyer and then a United States Senator. That’s what education does.”
Warren departed to another standing ovation.