[Congressional Record Volume 152, Number 43 (Thursday, April 6, 2006)]
[Senate]
[Pages S3201-S3203]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            MORNING BUSINESS

  Mr. DURBIN. Mr. President, I rise today to urge my colleagues to 
support a bill which I will introduce, entitled, ``Reverse the Raid on 
Student Aid Act of 2006.''
  Forty years ago, our country made a promise to the young men and 
women to make college more affordable for those who have the 
determination to pursue higher education regardless of their financial 
background. This promise was made through the enactment of the Higher 
Education Act of 1965.
  Even before the enactment of that legislation, the National Defense 
Education Act in the 1950s marked the first time that Congress made a 
Federal commitment to help young people complete their education.
  Most people do not remember the circumstances. We started giving 
student loans across America because we were afraid. Our fear was based 
on the fact that the Russians in the 1950s launched a satellite known 
as Sputnik. We knew they had nuclear capacity and now they were 
launching a satellite in the heavens. It frightened us.
  In the midst of the world war, we did not know if we had a new 
vulnerability, but we knew where to start in America. We started in the 
classroom. We decided we needed a new generation of Americans with a 
college education--specialists, scientists, engineers--people who could 
prepare America to defend itself and to be competitive in years to 
come. And we also realized that college education in the 1950s and 
1960s was not what it is today. It was really the province of the lucky 
few, those who were the Senators and daughters of alumni across America 
and those fortunate enough to be discovered and given a chance to go on 
to higher education.
  We changed everything in the 1960s. We democratized college education 
in America. College education became an opportunity for many in 
families that had never produced a college graduate. How did these kids 
get to school and finish? The National Defense Education Act said: We 
will loan you the money.
  I know a little bit about this story because I was one of those 
students. After graduating from high school, I borrowed money from the 
National Defense Education Act and went on to complete a college degree 
and a law degree. I never could have done it without borrowing that 
money. The terms now seem so simple and so easy. I was supposed to pay 
that money back over the next 10 years, after 1 year of grace period, 
but for the next 10 years after graduation, 10 percent a year at the 
outrageous interest rate of 3 percent. Of course, I did pay it back and 
look

[[Page S3202]]

back now as I reflect on it and realize what a great loan it was and 
what a great investor it was. I was one of millions who benefited.
  The good news is that the number of students who enroll in higher 
education across America has nearly doubled over the past 35 years: 8.5 
million college students in 1970 to approximately 16 million by 2005. 
There is some bad news to this story. Despite the importance of college 
education in the 21st century, many millions of young adults never make 
it to college.
  Never has higher education been more important than it is today. Over 
the course of a lifetime, a college graduate will earn over $1 million 
more than someone without a college degree. Today, six out of every ten 
jobs in America require some postsecondary education or training.
  In addition to the individual benefits of a college education, we 
know that investing and producing more college-educated Americans is 
vital to our Nation's future. Economists estimate that the increase in 
the education level of the U.S. labor force between 1915 and 1999 
resulted directly in at least a 23-percent overall growth in U.S. 
productivity.
  If you are a student of history, you come to realize how critical 
education is to where we are today. Why was the 20th century, from 1900 
to 1999, the American century? What was it that made America different? 
Why did we excel when other nations stalled? I think you look back to 
education there as well.
  Between 1890 and 1912, during that 22-year period of time, we built, 
on average, one new high school in America every single day. All across 
America, communities decided that high school education was now 
something worth the investment. Was it a Federal mandate? No. It was 
the decision of local communities that kids would not quit at the 
eighth grade. High school--once again, a province of the wealthy and 
the privileged--became customary and public and universal in America.
  So with this rush of new high school graduates coming to lead 
America, in so many different fields--business and education and other 
places--the 20th century became the American century. We moved from the 
Model T from Ford Motor Company to launching our own rockets at Cape 
Canaveral. We moved forward, with the understanding that education was 
the key.
  Recently, many reports have sounded the alarm that we may be losing 
our education. The world's technology is moving faster than our 
education. Countries such as China and India are showing dramatic 
progress when it comes to technology and innovation. To keep America at 
the economic forefront of the 21st century, we have to realize we need 
to continue to value education. We need to invest in it. We need to 
make certain that Americans are in the forefront, leading the world 
when it comes to educational standards. We also have to understand that 
many of these young college students, tomorrow's leaders, will not have 
a chance unless we give them a helping hand, the same kind of helping 
hand that this college student had many years ago.
  The cost of college education is far beyond the reach of many 
American students, not just those from poor families but those who come 
from middle-income households and farm families and families of recent 
immigrants to our country. According to the College Board, in current 
dollars, the total cost for tuition fees and room and board at a 4-year 
public university has increased by 44 percent over the last 5 years. 
Federal financial assistance is not keeping pace. Twenty years ago, the 
maximum Pell grant for low-income and working-class families covered 
about 55 percent of the costs of attending a 4-year public college. 
Today, the maximum Pell grant of $4,050 covers about 33 percent of the 
cost.
  More and more students find that grant is not enough. According to 
the U.S. Department of Education, the average student debt of $17 
thousand has increased by more than 50 percent over the last decade. We 
know the stories, stories of students who finally get the diploma, 
proudly walk down the steps, pose for photographs with their parents, 
and then try to figure out how in the world are they going to pay back 
that student loan. That student loan is going to guide them in their 
lifetime decisions. I have met so many who said: I took this job 
because it paid a little more. It was not the job I wanted, it was not 
the thing I wanted to do, but I have to pay off a student loan. So 
these students, burdened with more debt, find their life choices 
limited and restricted.
  Smart, hard-working kids deserve a chance to go as far as their 
talent will take them in America.
  Students who are qualified to go to college, students who have the 
desire to go to college, students who can make valuable economic, 
intellectual, and cultural contributions to America by pursuing higher 
education should not be kept away from school because they don't have 
the money. These students are our future.
  Let me tell you why I come to the floor and make a speech, which 
virtually everyone would agree with, and why I am introducing a bill 
today. Earlier this year, we decided to change the law when it came to 
college student loans. Earlier this year, the Republican leadership in 
Congress missed an opportunity to make an important investment in our 
Nation's future. A bill known as the deficit reduction bill, pushed 
through Congress by the Republican leadership and signed by President 
Bush, made $12 billion in cuts in student aid, the single largest cut 
in financial aid programs in history.
  Democrats, on the other hand, proposed reinvesting in student 
benefits the savings from reducing excessive bank subsidies. We were 
turned aside. Our approach was rejected. Unfortunately, the Republican 
majority missed an opportunity to prevent higher student loan interest 
rates from getting out of hand and going into effect. So as of July 1 
of this year, regardless of how low interest rates may be, student loan 
interest rates will be fixed at 6.8 percent for student borrowers and 
8.5 percent for parents who borrow for their child's education. 
Students will no longer be able to take advantage when interest rates 
go down by consolidating their loans. Currently, those loan rates are 
about 5.3 percent for student borrowers, 6.1 for parents.
  In addition, students are prohibited from consolidating loans that 
they might have from various sources and various schools in an effort 
to lower their interest rates. If we want to move ahead in the global 
economy, we can't succeed by saddling our newest workers with more 
debt. That is exactly what this bill does. Anyone who owns a home and a 
mortgage knows that there comes a time when you get the news that 
interest rates are going down, that you might consider renegotiating 
your mortgage and then your monthly payment will go down. You can pay 
off more on principle and maybe retire your mortgage sooner. It is 
something we do all the time, whether we are refinancing a car or a 
home or something else for which we borrowed.
  But along come the financial institutions and special interest groups 
and say: There is one group in America that we will not allow to 
consolidate their loans and at a lower interest rate. Which group did 
we pick? The most vulnerable--college students. And do you know why? 
They are not very good lobbyists. These kids spend too darned much time 
on their books, and they don't buy the good lobbyists in Washington. I 
just don't know what is wrong with this generation that they haven't 
hired the fancy lobbyists, who roam our hallways with considerable 
retainers, to represent them. Maybe they just assumed some of the 
Members of the Senate might be sympathetic to college students.
  Well, they were wrong. When it came to a choice between more money 
for the financial institutions that finance the student loans or 
standing up for the students to keep interest rates down, guess who 
won. The special interests won; the financial institutions won. The 
college students lost. As a consequence, they are burdened with more 
debt. Isn't it great that this Government, which generates so much debt 
every single day to be heaped on the shoulders of future generations in 
terms of our national debt, now decided to increase the personal debt 
of that same generation when it comes to college student loans?
  Large educational debt changes the future for many of these students. 
Career plans change. Lifestyles change. Home and auto purchases are put 
on hold. Family plans have to be delayed to accommodate debt payments.

[[Page S3203]]

  Let me tell you two real-life stories that illustrate the effects of 
these large student loan debts.
  Margo Alpert is a 29-year-old Chicago public interest lawyer who is 
on a 30-year repayment plan, 30 years to repay her student loan. She 
will be in her mid 50s and thinking about her retirement by the time 
she has finally paid off her student loan.
  Carrie Gevirtz, a 28-year-old social worker who earned her master's 
degree in social work last year from the University of Chicago, 
babysits and teaches kickboxing to supplement her $33,000 yearly income 
so she can pay off her $55,000 student loan. She is a social worker, 
for goodness' sakes. Here she is taking part-time jobs to pay off this 
mountain of debt which Congress, thank you, has just increased the cost 
of.
  College graduates such as Margo and Carrie are forced to make 
lifestyle decisions based on their debt. But there are other lifestyle 
decisions that are being made as well. Are you familiar with an 
operation known as Sallie Mae? Sallie Mae was a quasi-governmental 
agency which went private about 10 years ago. Sallie Mae is a financial 
institution, one of the largest when it comes to financing student 
debt. Check it out. Google Sallie Mae. You will find one of the most 
profitable corporations in America. They loan money to students, and 
they are making a fortune.
  Let me give an illustration of how good life is at Sallie Mae, the 
institution that is providing student loans for students across 
America. Sallie Mae's chairman, Albert Lord, racked in $40 million a 
year to oversee the student loan business and took some of the money 
that he made and decided to buy over 200 acres in nearby Maryland, 
right outside of Washington. People in the area were nervous, wondering 
what Mr. Lord, the chairman of Sallie Mae, was going to do with over 
200 acres. They were afraid he was going to build a subdivision.
  He calmed their fears: Don't worry. I am going to be building my 
personal, private golf course. It is just for me. So don't worry, there 
will be a lot of people here.
  The chairman of Sallie Mae, this operation that is financing students 
loans, is doing pretty well, don't you think? Obviously, he is not 
sweating out paying back his student loan. He is worried about whether 
he is going to be golfing and breaking par on the next hole.
  Young adults are forced to hold off on life plans such as starting a 
family and a home and car purchases in order to accommodate their loan 
payments, while Sallie Mae vice presidents, just below Mr. Lord, are 
making an average of $350,000 to $400,000 a year. Young people like 
Margo and Carrie should not face such high penalties because they had 
the desire and determination to pursue higher education.
  High school graduates who qualify for college should not be turned 
away because they can't afford the cost. That is why I am introducing 
the Reverse the Raid on Student Aid Act of 2006. This bill would cut 
student loan interest rates to 3.4 percent for student borrowers, 4.25 
percent for parent borrowers. Students would be allowed to consolidate 
loans while in school in order to lock in lower interest rates. The 
bill would repeal the single holder rule and allow students who want to 
consolidate their loans to shop around for the best deals rather than 
being locked in with their current lender. This is a luxury everybody 
enjoys. Why shouldn't students have it? The Pell Grant Program would be 
turned into a mandatory spending program with yearly increases.
  An investment in our children's education is an investment in 
America's future. We must do what we can today to ensure that America 
remains a global leader in the future.
  I recently went to a high school outside of Chicago in one of the 
suburbs. I wanted to meet with the math and science teachers. We have a 
serious challenge, not enough math and science teachers, particularly 
at the high school level. I sat down with a young lady who was very 
good and well liked by her students. I said: How did you pick this high 
school?
  She said: Honestly, Senator, I had hoped to teach in Chicago in one 
of the inner-city schools. That is where I wanted to be. But this job 
paid me $200 more a month. I didn't have any choice. I couldn't pay off 
my student loan and buy a car and work in the Chicago public school 
system. So I took this job in the suburbs.
  That was perfectly understandable. But it is a clear illustration of 
how this debt drives career decisions and how this young woman who 
might have made a significant difference in the life of some of the 
poorest kids in my State had to make a different choice and, having 
made that choice, you can understand the outcome when it comes to 
education in my State.

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