[Congressional Record Volume 148, Number 58 (Thursday, May 9, 2002)]
[Senate]
[Pages S4104-S4106]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STUDENT LOANS
Mr. DASCHLE. Mr. President, I want to talk briefly this afternoon in
morning business about a matter that I know is of great importance to a
number of people across the country, an issue that was the subject of
some discussion in the health committee just this morning.
Students are borrowing too much, and students are working too much in
order to finance rising college costs.
Sixty-four percent of all students borrow Federal student loans to
finance a college education today. The typical undergraduate student
graduates with about $17,000 in Federal loan debt.
Student debt is skyrocketing. As a result, many students find
themselves saddled with unimaginable levels of student loan debt and
experience difficulty in repaying their loans. An estimated 39 percent
of all student borrowers today graduate with unimaginable student loan
debt.
The administration, in late April, proposed to exacerbate the current
circumstances in ways that were inexplicable to many of us. They
proposed to raise student loan interest rates for consolidated loans by
changing the consolidation loan interest rate from a fixed to variable
rates. This proposal has come along, as I noted, when millions of
students are struggling to pay for college.
According to the Department of Education, the typical borrower now
graduates with almost $17,000 in Federal student loan debt, as I noted
a moment ago. And more than half of all Pell grant recipients graduate
with student loan debt as well. The typical Pell grant recipient who
borrows graduates with almost $19,000 in loan debt.
The Office of Management and Budget, on April 25, released a third
``Offset Options for the Supplemental'' appropriations bill that is
currently pending in the House. Many of us were intrigued with the
offset option that they chose to use involving student loan
consolidation. I will quote from the document. It is under the category
``For $1.3 billion for the Pell Grant shortfall, Student loan
consolidation proposal.'' And they stipulate that would raise $1.3
billion. Now I am quoting from the OMB document:
Changing the interest rate formula from fixed to variable
is a good thing as fixed rate consolidation loans: can result
in significant Federal costs; have higher average costs to
borrowers; needlessly penalize borrows who consolidate their
loans when variable interest rates are high; and, can have a
destabilizing effect in the guaranteed loan program.
The proposal that the administration made through the OMB would cost
the typical student borrower $2,800, and the typical Pell grant
recipient, who borrows, $3,100 over the life of their loans.
So in order to raise that $1.3 billion for which they are proposing
to offset, in part, the costs of the supplemental, what they want to do
is charge the typical borrower an additional $2,800 and the typical
Pell grant recipient $3,100 over the life of the loan.
Senator Kennedy has held a hearing this morning. We were very pleased
that the administration appears now to have had a change of heart, for
they have announced they are reversing their position. They now
recognize that this was a major error and that they will now no longer
adhere to that offset as they look to ways in which to find the money
to pay for the supplemental.
We are very pleased with the administration's announcement that they
will not advocate this additional burden on students, both for student
loans as well as Pell grants.
But I must say, I thank the distinguished chair of the HELP Committee
for calling this to the attention of our colleagues, for calling it to
the attention, really, of the educational community. Because of his
stalwart advocacy, and the extraordinary attention that this issue has
generated over the last couple of weeks, I am not surprised that
the administration has now had a change of heart.
This was not a good idea. And, obviously, they have now come to that
conclusion as well.
So it is good news for students. It is good news for education. And
it is especially good news for those advocates, as Senator Kennedy has
personified, who have called for this change of heart from the day it
was announced.
Mr. KENNEDY. Will the Senator yield?
Mr. DASCHLE. I am happy to yield to the Senator from Massachusetts.
Mr. KENNEDY. Mr. President, I would like to preface my question with
this observation: Under the leadership of Senator Daschle, there were
46 Members of the Senate--under his leadership and Senator Reid's, and
others--who wrote a letter to the President some 10 days ago,
recognizing that if this policy of the administration went ahead, it
would be like increasing taxes for the average working family by
$3,700. That would be the average increase if they did not consolidate.
It could go as high as $10,000.
I am wondering, I did not hear that we ever received a response to
that letter requesting the deferral of that action.
As Senator pointed out, I think all of us in this body want to,
first, give the assurances to young people in college that we are going
to do everything we possibly can to make college affordable.
And this is my question to the leader: Doesn't the leader believe
that we have a real responsibility to do everything we possibly can to
make sure college is going to be more affordable for working families
and for the middle income, and that we are also going to stand to make
sure we meet our commitment we made to the American people and to the
schoolchildren with regard to the early education bill, that we are
going to try to meet our commitment to those students, to the families,
to the parents, and to the local communities as well?
I am interested in hearing, as the majority leader of the Senate, how
important you think it is that we continue the effort to ensure we are
going to make the dreams of our young people attainable--through
quality education in K-12, and through higher education--and how
strongly the leader is committed to doing that, after thanking the
administration for changing their position.
Mr. DASCHLE. Mr. President, no one knows more about the commitment we
have made to the students who want to be involved in higher education
than the distinguished Senator from Massachusetts. He can probably tell
us the very day it was done. But in recent times, we have increased the
cap, the availability of resources through both loans as well as the
Pell grants to students in order to accommodate their additional costs.
We have recognized that their costs continue to go up. We have
recognized how serious the financial problems are that many of these
students have experienced. As a result, we have increased the caps.
That is why the original OMB decision is so mystifying. Because as we
raise the caps, if we raise the cost, then we have not done anything to
help the students, so we have made this raise in eligibility for
additional assistance virtually meaningless.
I might say, there is a trend here because that is basically what we
did with the No Child Left Behind Act as well. We provided more
opportunities for students in many respects, but then we underfund by
more than $1 billion the resources we should be providing to ensure
that act is fully funded.
So there appears to be rhetoric, and then there is the reality. There
is the rhetoric, and then there is the resources. The rhetoric is: We
want to help all these students. The rhetoric is: We don't want to
leave any child behind. The reality is, we do not provide the resources
to see that it happens--whether it is an OMB decision on student loans
or the decision that the budget implies on the part of the
administration to fund the No Child Left Behind Act.
Ms. STABENOW. Will the Senator yield?
Mr. DASCHLE. I am happy to yield to the Senator from Michigan.
Ms. STABENOW. I would like to thank the leader personally on behalf
of hundreds of thousands of students
[[Page S4105]]
and their families in Michigan for his leadership on this issue. And I
also thank the Senator from Massachusetts for his leadership.
When I first heard about what the administration was proposing, I was
astounded. I received calls from so many students and families in
Michigan.
We all know, as you indicated, that Pell grants are important,
particularly to lower income students. But so many middle-income
families rely on the loan program, and rely on the ability to receive
the lowest possible interest rate in order to be able to send their
children to college.
I have to say, on a personal note, having had a son go through
college and a daughter who is now in college, for myself with loans, I
certainly appreciate what families feel.
When we saw the proposal to increase, essentially, the interest
rates, it was nothing more than a tax on the ability of young people to
be able to go to college and pursue the American dream. And we all
certainly have a stake in making sure we do that.
So I thank the majority leader for his leadership. I know that the
Senator from Massachusetts, as well, has been vigilant.
It is good news that they have appeared to change their minds, but we
certainly know that minds can be changed again. As we go through this
process, I know we will all stand together to make sure that this is an
area we do not touch. I cannot imagine something more important than
making sure the young people, the adults, and families of this country
have the opportunity to get the skills they need to be successful in
our economy. I am proud to stand with the majority leader in support of
this goal.
Mr. DASCHLE. I thank the Senator from Michigan. She has been a
tremendous advocate for education ever since the day she was sworn. I
am grateful to her for her engagement and her willingness to continue
to work with us. She was one of the signatories on the letter the
Senator from Massachusetts has referenced. I thank her very much.
She made an interesting point. She said, what the administration has
decided could be decided in another direction at some later date, and
we might find ourselves in yet another set of circumstances involving
the very same problem; that is, the rhetoric versus the reality, the
rhetoric versus the resources. We will be going into appropriations. I
worry about the rhetoric versus the resources once again. Are we going
to be able to ensure that we can provide the commitment to students at
all levels, that the resources will be there to match the rhetoric that
we hear coming from the administration with regard to their commitment
on education? I have my doubts.
We have at least two instances now so far--the student loan issue as
well as the no child left behind question--where the rhetoric has far
exceeded the results and the reality and the resources. I appreciate
her comment in that regard.
Mr. DAYTON. Will the majority leader yield for a question?
Mr. DASCHLE. I am happy to yield to the Senator from Minnesota.
Mr. DAYTON. I had been traveling around Minnesota a couple years ago
while seeking this office, and I was stunned by the increasing number
of students who were relying on loans and by the increased amount of
money that undergraduates and graduates were building up in debt before
they even got their first job in the workplace. It is $25,000 for
somebody attending a 4-year public institution in Minnesota; $50,000,
even in a couple cases over $100,000, for people who have come out of
graduate programs. Have you had that same experience in South Dakota in
the last few years?
Mr. DASCHLE. The Senator from Minnesota is exactly right. I don't
know what the amount is in South Dakota for the typical student, but
the typical student nationally now graduates with about $17,000 in
Federal loan debt. My guess is, it is somewhat lower in South Dakota. I
have talked to a lot of students who are very concerned about paying
off that debt, very concerned about the debt service they have to pay
on a regular basis when they graduate. This is something about which
they are very concerned. Thirty-nine percent of all student borrowers
graduate today with what is termed an unmanageable student loan debt.
There is no question, this is a matter that is of increased concern
to students all over the country, especially those in the Upper Midwest
such as Minnesota and South Dakota. This is why we were so mystified
when they said, we are going to ask students, on top of all the debt
they currently have, to pay an additional $2,800 for a typical loan or
$3,100 for a Pell grant recipient. I can't imagine how we would want to
exacerbate their problems by adding even further cost on to the
overwhelming loan debt that many of them already have.
Mr. REID. Will the Senator yield for a question?
Mr. DASCHLE. I am happy to yield to the Senator from Nevada.
Mr. REID. I wanted the leader to be here because he mentioned it
briefly. I wanted to pick up on the fact that we have all joined in the
letter sent to the President. I say ``joined'' because we depend on the
Senator from Massachusetts for so many things. I want to see if the
leader will agree--and I know he does--the Senator, as we know, has a
great pedigree, but there is no one who serves in the Senate--I am not
too sure has ever served in the United States--who has been more
interested and more concerned about the people who have no one here to
represent them.
I made a couple of notes. On seniors, we have had no leader in the
Senate such as the senior Senator from Massachusetts, whether it is
Medicare, whether it is prescription drugs--you list the issues seniors
are interested in, including Social Security--he is always leading the
charge in that regard.
If you talk about the poor, bankruptcy, food stamps, he is always out
in front, as well as on the minimum wage, Medicaid. And then when you
talk about education, of course, his committee has written legislation,
not the least of which is the work that was done in leaving no child
behind, which is a great piece of legislation. We need to make sure
there is money there. The environment, hate crimes, nuclear victims, I
am so impressed with the work the Senator from Massachusetts does.
And while people come to us all the time--you certainly more than I,
deservedly--about the things we have done, we usually, on many of the
issues I have mentioned, take the lead from the Senator from
Massachusetts.
Would the Senator agree with me that, in the history of the Senate,
there have been very few Ted Kennedys who have been able to do things
such as this, and every college student and parent who is paying off a
loan I am sure can understand what I am saying. Would the Senator
agree?
Mr. DASCHLE. In the history of the Senate, I would say there has only
been one Ted Kennedy. But the point is so well taken. For 35 years,
this giant of the Senate has done remarkable things, probably has more
legislation attributable to his contribution in this body than anybody
in recent times. We certainly recognize his many accomplishments. It is
not only the level of accomplishment and achievement but the manner in
which he accomplishes them that is noteworthy. I appreciate very much
his calling attention to this issue as well.
This is another example. This became an issue when the country,
through his committee and his leadership, was put on notice about the
implications of this $1.3 billion offset. We are very grateful to him
for his work in this regard.
Mr. KENNEDY. If the Senator will yield, I am grateful to both of my
colleagues for their kind and overly generous remarks. I plan to be
here for a while longer.
Let me just carry on and ask the majority leader, the President, with
whom we worked on education, was in southern Wisconsin earlier this
week talking about the Federal Government having a responsibility. He
said: Generally that responsibility is to write a healthy check. We did
so in 2002; $22 billion for secondary, elementary education, a 25-
percent increase. We have increased money 35 percent for teacher
recruitment, teacher retention, and teacher pay.
Does the Senator not find it somewhat perplexing that we see in this
chart the Bush proposed increase for 2002 is 3.5 percent? It increased
in 2002 as a result of the leadership of the Senators from South Dakota
and Nevada and the Democrats. We got it up to 20 percent. The President
is taking credit
[[Page S4106]]
for it out here in the Midwest. And now we have this year 12.8 percent.
Do we find that somewhat perplexing when we have the President saying
we have our responsibilities to write a healthy check? Well, the check
was written and we increased it, but the Bush proposal is at 2.8
percent.
I wanted to mention, in the area which is of such central importance
to educational reform, that is, having a quality teacher in every
classroom, of all the educational issues, and there are many--
afterschool programs, the construction issues, smaller class sizes--
having a well-trained teacher in every classroom was key.
The President was out in the Midwest another day talking about all
the work they have done, increasing teacher recruitment, retention, and
pay, 35 percent. That is represented in this $742 million. We supported
every penny of it.
Well, now, look at this fiscal year's proposed budget for the very
same function. Zero. Not even the cost of living. Zero. I am just
wondering; when the Senator talks about the difference between rhetoric
and reality, there must be people in the Senator's own State who have
to wonder about that as well. I am just, again, wondering whether it
isn't important for us, as we are coming into the debate and national
elections in 2002--money doesn't solve everything, but money is a
pretty clear indication of a nation's priorities. I know the leader
reached his hand out to the Republican leader and we passed a strong
bipartisan bill that had reform. I think most of us thought we needed
reform and resources.
This is enormously troublesome to me in terms of the K through 12, as
the efforts by the administration are to prohibit consolidation. I
wonder whether the leader agrees with me that education is a key
priority and that we are going to have to watch every aspect of it as
we continue through this legislative session so that we are going to
meet our responsibilities to families across the country and sharing
quality education, K through 12, and even earlier education and college
education.
Mr. DASCHLE. Mr. President, I heard someone say the other day: You
can't fool all the people all the time, but why not give it a try.
I think that is, in essence, what we find the administration
attempting to do when it comes to education--simply assert that they
are for it and try to fool all the people all the time. But the Senator
from Massachusetts points out the problems with that strategy. You
can't fool all the people all the time, when the resources simply don't
speak to the reality.
That is exactly the problem the administration continues to face. The
resources don't speak to the reality. The resources fall far short of
the reality. We can all assert we are for education and that we are not
going to leave any child behind. But I can tell you, there are South
Dakota children left behind, there are Massachusetts children left
behind, and Nevada and Minnesota children are left behind. I think that
is the question we are going to continue to face throughout the
remainder of the year: Will we leave these children behind because this
administration refuses to provide the resources? I hope not.
Today, we got a good indication that, at least in one instance, they
have changed their minds. When it comes to students, they will provide
the resources that match the initial reality. We have a lot more of
these instances in store, but I think we have made the first
downpayment in the effort. I thank and applaud the Senator from
Massachusetts for doing so.
I yield the floor.
The PRESIDING OFFICER (Mr. Edwards). The Senator from Colorado is
recognized.
Mr. ALLARD. Mr. President, I understand we are in morning business.
The PRESIDING OFFICER. The Senator is correct.
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