At a time when millennials are growing increasingly cynical toward government and politics, Massachusetts Sen. Elizabeth Warren is showcasing a playbook to get their attention – focusing on pocketbook issues that impact younger voters.
The freshman senator’s first piece of standalone legislation would reduce student loan rates to the same level that the Federal Reserve offers big banks. “Let’s invest in those students by giving them the same deal [as banks],” Warren said on CNN last week. “That’s what it’s about.”
Rates are set to double on need-based loans from 3.4 to 6.8 percent on July 1, and Warren’s proposal would reduce it to the current Federal Reserve rate of 0.75 percent. Meanwhile, the House is preparing to take on student loan interest rates with a bill similar to what the Obama administration has previously proposed. That legislation would tie the rate based on the 10-year Treasury note, plus 2.5 percent.
The policy behind her bill isn’t winning endorsements among everyone. The banking industry has criticized it. Jim Kessler, senior vice president for policy at centrist-Democratic think tank Third Way, says “there’s a reason why banks get an overnight rate that’s very low: they have collateral. It's a very short-term loan. It’s a very low-risk loan.”
To such critiques, Warren has said “there is no risk in lending to the big financial institutions because they've got too-big-to-fail backing them up," she said on CNN. "That doesn't seem like the right approach to me."
Even if Warren’s bill doesn't pass through Congress, it serves as an example of how Democrats can use populism to politically galvanize young voters, particularly in a non-presidential year.
A look at social media outlets paints a picture of the buzz. On reddit.com, articles about Warren’s bill have generated thousands of comments. Memes on Facebook have been shared tens of thousands of times and video of her speech introducing the bill has racked up more than 100,000 views on YouTube (as it was promoted by Upworthy.com).
"Young people are going to feel the weight of doubled interest rates on July 1st if Congress doesn’t act, so the Senator is reaching out to students and has seen an outpouring of support in response," says Warren spokesperson Lacey J. Rose.
Matthew Segal, president of under-30 advocacy group Our Time, says he’s noticed buzz online. His group’s Facebook page is normally home to memes, but a Facebook post of a straight news article on Warren’s proposal garnered hundreds of shares, unusual for that kind of content on the page. “It shows you the sort of nerve that student loan debt has struck, and obviously a byproduct, that Sen. Warren has struck,” Segal said.
That could pay big political dividends for Democrats. Young voters played a large role in President Obama’s winning coalition. In 2012, 60 percent of 18- to 29-year-olds voted for him, while 66 percent voted for him in 2008. At the same time, young people aren’t turning out to vote in droves, even in presidential years. Census figures released last week showed 18-24 year olds were the least likely group to vote -- turnout rate among them was 41.2 percent in 2012, making up 15 percent of the electorate.
Young people are also growing increasingly cynical toward politics. A new Institute for Politics at Harvard survey of 18- to 29-year olds found that negative perceptions toward elected officials and politics -- and most public institutions -- are growing. A near-majority of respondents agreed with the statement “politics today are no longer able to meet the challenges our country is facing,” while only 16 percent disagreed with it.
President Obama urged young people to reject cynicism during his speech last week to Ohio State University students. "We have never been a people who place all our faith in government to solve our problems, nor do we want it to. But we don’t think the government is to the source of all our problems, either,” he said. “As citizens, we understand that America is not about what can be done for us.”
While many young people view elected officials and government unfavorably, the buzz generated by Warren, best-known as a Wall Street critic, shows she knows how to capitalize on issues that will get young people feeling positive about government.
A majority of millennials cite the economy as a top concern, followed by health care, according to the Harvard study. But while fixing the economy can be a vast undertaking, the student loan rate is a specific target. Nearly one-in-five households owned student loan debt in 2010, according to Pew Research Center.
“She's already cemented a cult following, and the more that she conditions herself or refines herself as a populist -- 'We're here on behalf of the people against the interest of money and power '-- you can turn out an often seemingly-apathetic crowd,” said Segal. "You don't see a lot of U.S. Senators introducing legislation for their younger constituents. I think this is incredibly smart.”
Kessler says the the bill itself is "a terrible proposal," adding that the real problem is the rising cost of college tuition, which for decades has grown at faster rate than inflation. Of Warren’s bill, he says “it’s legislation that's trying to pit average people versus financial institutions. In politics, that's a winning combination. Whether there's merit to it, that's different."