[Congressional Record Volume 158, Number 15 (Tuesday, January 31, 2012)]
[Senate]
[Pages S212-S213]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REED (for himself, Mr. Whitehouse, Mr. Franken, Mr. Leahy, 
        Mr. Sanders, and Ms. Stabenow):
  S. 2051. A bill to amend the Higher Education Act of 1965 to extend 
the reduced interest rate for Federal Direct Stafford Loans; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. REED. Mr. President, today I introduce with my colleagues 
Senators Whitehouse, Sanders, Stabenow, and Franken legislation to stop 
the student loan interest rate from doubling on July 1 of this year.
  This is an issue that weighs heavily on many of Rhode Island's 
students and families who rely on student loans to finance college. 
Rhode Island's college graduates have the ninth highest student debt 
total in the Nation, according to a recent study by the Project on 
Student Debt. In Rhode Island, 67 percent of students graduating from 
four-year colleges and universities in the 2010 school year had debt 
averaging over $26,300.
  Nationwide, the Department of Education estimates that more than 10 
million students will borrow subsidized Stafford Loans in fiscal year 
2012. Unless we act soon, they will see their interest rates double for 
the upcoming academic year.
  In 2007, Congress made a historic investment in higher education by 
passing the College Cost Reduction and Access Act. Included in this law 
was a provision that reduced the fixed interest rate on Stafford Loans 
for undergraduate students from 6.8 percent to 3.4 percent over a 4 
year period, easing the financial burden on millions of students and 
their families.
  This was the right investment to make for our future. Today, 
education, particularly higher education, is even more essential than 
ever. In 1980, the gap between the lifetime earnings of a college 
graduate and a high school graduate was 40 percent. In 2010, it was 74 
percent. By 2025, it is projected to be 96 percent. Since at least the 
1980s, we have not been producing a sufficient number of college-
educated workers to meet the demand of a more sophisticated and 
challenging economy driven by global competition. Indeed, our country 
lags behind in college education, ranking 14 in international 
comparisons of college graduates. For young adults, ages 25 to 34, we 
rank 16.
  This is no time to make financing a college education more expensive 
for middle class families. Yet, absent enacting this legislation, that 
is what will happen. According to an analysis by U.S. PIRG, allowing 
the interest rate to double could cost borrowers who take out the 
maximum $23,000 in subsidized student loans approximately $5,000 more 
over a 10-year repayment period.
  The subsidized student loan program for undergraduates is highly 
targeted to low- and middle-income families. Approximately 37 percent 
of the dependent borrowers in this program come from families with 
annual incomes of less than $40,000. An additional 21.6 percent of 
students receiving subsidized students loans come from families with 
incomes between $40,000 and 60,000 per year. These students receive 
very little, if any, benefit from the Pell grant program but still have 
significant financial need. The subsidized student loan program is our 
main vehicle for addressing that need.
  Tax loopholes and giveaways that let the biggest companies ship jobs 
overseas cost roughly $37 billion over ten years. Loopholes like this 
one should be ended, with those savings used to prevent an increase in 
college costs, which are already a crushing burden on families. Indeed, 
those savings are more than enough to extend the student loan interest 
rate at least through the next reauthorization of the Higher Education 
Act, expected in 2014. I would that my colleagues on both sides of the 
aisle will support helping millions of middle class families finance a 
college education over continuing to provide incentives for companies 
to take jobs and their investments overseas. In his State of the Union 
Address, President Obama called on Congress to prevent this doubling of 
student loan rates. As families continue to struggle with the rising 
cost of college and newly minted graduates face one of the toughest job 
markets since the Great Depression, it is vital that we protect middle 
class families and their children from higher student loan rates.


 =========================== NOTE =========================== 

  
  On page S212, January 31, 2012, the Record reads: . . . 
graduates face the toughest job market since the Great Depression 
. . .
  
  The online Record has been corrected to read: . . . graduates 
face one of the toughest job markets since the Great Depression . 
. .


 ========================= END NOTE ========================= 

  I urge my colleagues to join me in cosponsoring and pressing for 
passage of this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.

[[Page S213]]

  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2051

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. INTEREST RATE EXTENSION.

       Section 455(b)(7)(D) of the Higher Education Act of 1965 
     (20 U.S.C. 1087e(b)(7)(D)) is amended--
       (1) in the matter preceding clause (i), by striking ``and 
     before July 1, 2012,''; and
       (2) in clause (v), by striking ``and before July 1, 
     2012,''.

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