[Congressional Record Volume 157, Number 73 (Wednesday, May 25, 2011)]
[Senate]
[Page S3345]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BROWN of Ohio (for himself and Mr. Franken):
   S. 1068. A bill to amend the Higher Education Act of 1965 to provide 
for temporary student loan debt conversion authority; to the Committee 
on Health, Education, Labor, and Pensions.
  Mr. BROWN of Ohio. Mr. President, this month marks commencement 
season at our great colleges and universities across Ohio and the 
Nation. I have had the honor of speaking at a few this year--Owens 
Community College, Ashland University, Cleveland Marshall College of 
Law, and Ohio Northern University.
  It is a day of achievement and accomplishment, a reaffirmation of why 
education is a key to our economic prosperity. But it is also a day of 
anxiety. Graduates are leaving campuses to enter a difficult job market 
saddled with student debt.
  Approximately 2/3 of Ohioans who attend a private or public 4-year 
college or university graduate with an average of nearly $26,000 in 
student loan debt. Unfortunately, as student loan debt levels continue 
to grow, the Nation's hiring climate remains sluggish. This has led to 
limited employment opportunities for recent graduates; nearly half of 
the 2009 graduating class is currently unemployed or employed in a 
position that does not require a college degree.
  Such circumstances are leading to undue personal stress and 
potentially, a lifetime of financial challenges. Far too often, 
individuals and families are becoming part of the ``sandwich 
generation'' where families are paying for the cost of their children's 
education while also taking care of their aging parents.
  That is why last year I supported--and the President signed into law, 
the Health and Education Reconciliation Act, the single largest federal 
investment in student aid in generations. The law ends wasteful 
subsidies to private lenders through the Federal Family Education Loan, 
FFEL, Program. In doing so, we cut out the middleman and loans are now 
not only originated, but also serviced, by the U.S. Department of 
Education.
  By ending subsidies to private banks, we saved billions of dollars, 
and used the savings to allow the maximum Pell Grant award to reach a 
historic level. We made it easier for students to repay loans through 
the Income-Based Repayment Program. We did this all at no cost to the 
taxpayer.
  For many colleges and universities, the transition from FFEL to the 
Direct Loan program has been a resounding success as there has been no 
disruption to borrowers or financial aid administrators.
  For those borrowers who are in the middle of the transition period, 
I, along with my good colleague Senator Franken, am introducing the 
Student Loan Simplification and Opportunity Act. This legislation, by 
simplifying loan repayment and reducing the loan amount, benefits 
college graduates. And this legislation, by removing costly subsidies 
provided to private lenders, saves 1.8 billion dollars that will be 
reinvested in the Pell Grant Program, thereby ensuring that other 
deserving students can afford to attend college.
  The Student Loan Simplification and Opportunity Act would allow 
students with both FFEL loans and Direct Loans to voluntarily transfer 
their FFEL debt to a Direct Loan servicer over a nine-month period.
  By converting loans, the likelihood that a borrower may miss a 
payment and end up further in debt would decrease. On average, a 
borrower with multiple loan servicers has a 20 percent higher chance of 
defaulting on their loan payments. Yet, this program not only 
simplifies a borrower's loan repayment, it reduces the amount owed. 
Borrowers who transferred their debt would be rewarded with up to a 2 
percent reduction in the principal amount of their FFEL loan.
  I am proud to introduce the Student Loan Simplification and 
Opportunity Act, as this legislation will benefit both borrowers and 
taxpayers.
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