[Congressional Record Volume 159, Number 74 (Thursday, May 23, 2013)]
[House]
[Pages H2926-H2940]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1100
SMARTER SOLUTIONS FOR STUDENTS ACT
Mr. KLINE. Mr. Speaker, pursuant to House Resolution 232, I call up
the bill (H.R. 1911) to amend the Higher Education Act of 1965 to
establish interest rates for new loans made on or after July 1, 2013,
and ask for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 232, in lieu of
the amendment in the nature of a substitute recommended by the
Committee on Education and the Workforce
[[Page H2927]]
printed in the bill, an amendment in the nature of a substitute
consisting of the text of Rules Committee Print 113-12 is adopted and
the bill, as amended, is considered read.
The text of the bill, as amended, is as follows:
H.R. 1911
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Smarter Solutions for
Students Act''.
SEC. 2. STUDENT LOAN INTEREST RATES.
Section 455(b) of the Higher Education Act of 1965 (20
U.S.C. 1087e(b)) is amended--
(1) in paragraph (7)--
(A) in the paragraph heading, by inserting ``, and before
july 1, 2013'' after ``2006'';
(B) in subparagraph (A), by inserting ``and before July 1,
2013,'' after ``2006,'';
(C) in subparagraph (B), by inserting ``and before July 1,
2013,'' after ``2006,''; and
(D) in subparagraph (C), by inserting ``and before July 1,
2013,'' after ``2006,'';
(2) by redesignating paragraphs (8) and (9) as paragraphs
(9) and (10), respectively; and
(3) by inserting after paragraph (7), the following:
``(8) Interest rate provision for new loans on or after
july 1, 2013.--
``(A) Rates for fdsl and fdusl.--Notwithstanding the
preceding paragraphs of this subsection, for Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford Loans
for which the first disbursement is made on or after July 1,
2013, the applicable rate of interest shall, during any 12-
month period beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and be equal to--
``(i) the high-yield 10-year Treasury notes auctioned at
the final auction held prior to such June 1; plus
``(ii) 2.5 percent,
except that such rate shall not exceed 8.5 percent.
``(B) PLUS loans.--Notwithstanding the preceding paragraphs
of this subsection, for any Federal Direct PLUS Loan for
which the first disbursement is made on or after July 1,
2013, the applicable rate of interest shall, during any 12-
month period beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and be equal to--
``(i) the high-yield 10-year Treasury notes auctioned at
the final auction held prior to such June 1; plus
``(ii) 4.5 percent,
except that such rate shall not exceed 10.5 percent.
``(C) Consolidation loans.--Notwithstanding the preceding
paragraphs of this subsection, any Federal Direct
Consolidation Loan for which the application is received on
or after July 1, 2013, shall bear interest at an annual rate
on the unpaid principal balance of the loan that is equal to
the weighted average of the interest rates on the loans
consolidated, rounded to the nearest higher one-eighth of one
percent.''.
SEC. 3. BUDGETARY EFFECTS.
(a) Paygo Scorecard.--The budgetary effects of this Act
shall not be entered on either PAYGO scorecard maintained
pursuant to section 4(d) of the Statutory Pay-As-You-Go Act
of 2010.
(b) Senate Paygo Scorecard.--The budgetary effects of this
Act shall not be entered on any PAYGO scorecard maintained
for purposes of section 201 of S. Con. Res. 21 (110th
Congress).
The SPEAKER pro tempore. The gentleman from Minnesota (Mr. Kline) and
the gentleman from California (Mr. George Miller) each will control 30
minutes.
The Chair recognizes the gentleman from Minnesota.
General Leave
Mr. KLINE. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
include extraneous material on H.R. 1911.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Minnesota?
There was no objection.
Mr. KLINE. Mr. Speaker, I yield myself such time as I may consume. I
rise today in strong support of H.R. 1911, the Smarter Solutions for
Students Act.
We're here today to address a crisis of Washington's own making.
Several years ago, Congress decided politicians, not the free market,
were better equipped to set student loan interest rates. Politicians
set a fixed rate of 6.8 percent for all loans and then decided to
advance legislation based on a campaign promise that would temporarily
phase this rate for subsidized Stafford loans down to 3.4 percent.
Last summer, with the expiration of the lower rate scheduled for July
1, 2012, debate about student loans reached a fever pitch. The
President began touring college campuses, calling on Congress to
prevent the increase that his own party set in motion back in 2007.
As I said at the time, no one wanted to see interest rates double--
particularly at a time when one out of every two college graduates was
struggling to find a full-time job. But we need to move away from a
system that allows Washington politicians to use student loan interest
rates as bargaining chips, creating uncertainty and confusion for
borrowers.
When Congress approved legislation to temporarily stave off the
Stafford loan interest rate increase, my colleagues and I lent our
support with the promise that we would use this time to work toward a
long-term solution that better aligns interest rates with the free
market.
The Smarter Solutions for Students Act accomplishes this goal by
simply moving all Federal students loans, except Perkins loans, to a
market-based interest rate system. This responsible legislation builds
upon a proposal that was actually put forth by the President earlier
this year.
The Smarter Solutions for Students Act is a narrow piece of
legislation that will provide a lasting solution to the problem facing
the Federal student loan program. Unfortunately, Mr. Speaker, some
critics would rather kick the can down the road and simply extend the
current arbitrary rates at a taxpayer cost of roughly $8 billion. They
want to continue the failed status quo and leave politicians in charge
of setting rates.
Earlier this week, The Washington Post called it a ``weird fact''
that student loan interest rates:
Aren't pegged to anything real, just to the whims of
Congress, which inevitably uses student loans as political
playthings.
Students deserve better. They shouldn't have to watch as Washington
holds their interest rates hostage each election year. They shouldn't
have to deal with the uncertainty that comes with waiting for
politicians to cobble together another temporary fix to keep interest
rates in line with the market.
We have an opportunity today to get politicians out of the business
of setting student loan interest rates. We have an opportunity to
provide students with more stability in the long run by putting an end
to quick fixes and campaign promises, and we have an opportunity to
build upon common ground with the administration and advance a
bipartisan solution that's a win for both students and taxpayers.
I urge my colleagues to support the Smarter Solutions for Students
Act.
I reserve the balance of my time.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself 5
minutes.
Mr. Speaker, in little more than a month, the interest rates on loans
to millions of the neediest students will double from 3.4 percent to
6.8 percent. With that doubling, those that can afford it least will be
burdened with more debt. With total student loan debt already
surpassing $1 trillion, this Congress needs to stop that interest rate
hike, that doubling of the interest rates.
But rather than make it more affordable for students and families to
pay for college, this Congress this day in this Chamber is debating a
bill--I know people won't believe this--but we're debating a bill to
make it more expensive for families and students to achieve a college
education. At a time when college costs are rising and historic low
interest rates, the majority is asking us to accept a bill that would
increase interest rates. And even though the student interest rate is
scheduled on July 1 to double from 3.4 percent to 6.8 percent, the bill
presented on this floor today is worse than that for students and their
families. It increases the drag on the economy that the student debt is
to families and to young people trying to seek a job and to seek to
form family.
This bill is so bad that it means more than the doubling of the
interest rates. How do you think that has anything to do with the
market rates? According to the Congressional Research Service, when
they look at this bill, you can see that under current law interest
rates, they would pay $4,000. And they are doubling to 6.8 percent, so
they'd pay $8,800 in interest rates. And under the Republican bill,
families would pay more than $10,000 in interest. How can that possibly
be in the interest of these families? How can that possibly be
happening in this economy when people are struggling with interest
rates? It cannot be allowed.
You can see here that the parents who may have to contribute
something, they would take out a loan to
[[Page H2928]]
help their child complete a college education, they are going to pay
more than $35,000 over the life of those loans than under the current
law, and that's what we've got to stop from happening.
And so what you see is when it is all said and done, this bill asks
students over the next few years to pay more than $3.7 billion, almost
$4 billion, in increased interest rates. No wonder this poor student
has a headache. No wonder this parent is pounding on his head thinking,
What am I going to do?
But what do they say? They say we have a market rate here. We have a
market rate. Well, many in America, certainly middle class families and
many low-income families, will remember the last time when we had this
kind of market rate because what they have, they have a teaser rate.
For your first year, they'll have a lower interest rate. So you have a
teaser rate. But you know that next year that teaser rate adjusts so
you don't get that rate because next year you get a new rate. And when
you're a sophomore in college and you take out another loan, you get a
new rate, a higher rate. And when you're a junior, you take out a loan,
and you get a higher rate. And when you graduate, they take all of your
loans together and give you a higher rate. Does that sound familiar to
people? That's the marketplace. That's the marketplace when you choose
to crush the people who are borrowing the money.
The President has the market rate. The chairman has said many times
the President is looking to use the markets to set a realistic rate.
But as he sets the rate, it's deficit neutral. As he sets the rate, the
amendment we tried to offer was deficit neutral. He saves those
students and families about $30 billion over the life of those loans.
You get the difference? Yes, the market's the market. But you can pick
the worst of the market, and you can pick the best of the market.
They've chosen to pick the worst of the market for these students.
Now they had options. Republicans last night in the Rules Committee
had options. Mr. Courtney offered an amendment to keep rates at 3.4
percent. They rejected it.
I offered the President's market approach. They rejected that.
Then Mr. Heck from the Republican side of the aisle from Nevada
offered to say let's provide an incentive to make sure that students in
fact continue to pay on time, as they should, as the market would do
because you want to incent good behavior because you get more of it.
They rejected that.
Mr. Rice of South Carolina went before them. He's a member of the
Republican caucus, very concerned about interest rates in this
legislation, very concerned about what's going to happen to these
families. He thought he could lower the interest rates within their
bill, within the market rates, stick with the market principle. They
said ``no.''
So all you get today is whether or not you want a solution that is
worse than the doubling of the interest rates on July 1. That's not an
answer for America's families. That's not an answer for America's
students.
I reserve the balance of my time.
{time} 1110
Mr. KLINE. Mr. Speaker, I'm now pleased to yield 2 minutes to the
gentleman from Wisconsin (Mr. Petri), the vice chairman of the
Education and the Workforce Committee.
Mr. PETRI. I rise today to support H.R. 1911 because it would put in
place a long-term, market-based solution to Federal student loan
interest rates.
Some on the other side wish to engage in endless debates on the level
of student loan interest rates. This is the wrong debate to be having,
however, and distracts us from real reform. By taking this issue out of
the hands of politicians, H.R. 1911 moves the discussion forward.
I believe there are better ways to help students manage the repayment
of their loans than ever-higher interest rate subsidies. Income-based
repayment, an idea that originated with Milton Friedman and was
subsequently advocated by Presidents Reagan, Clinton and Obama, is
better for students and taxpayers.
While we have an income-based repayment option now, it doesn't do
enough to protect our taxpayers. Therefore, working with Representative
Jared Polis, I've introduced legislation to make needed reforms.
With today's bill, we can break free from this debate over interest
rates and focus on real reform to help students struggling with student
loan debts. So I'd urge passage of H.R. 1911.
Mr. GEORGE MILLER of California. I yield 2 minutes to the gentleman
from Texas (Mr. Hinojosa).
Mr. HINOJOSA. Mr. Speaker, I rise in strong opposition to H.R. 1911,
the Republican bill to make college more expensive. In America, we
often speak of the importance of expanding educational opportunity and
supporting students in achieving the American Dream. Unfortunately, our
student loan debt crisis is crushing the dreams and aspirations of
students and college graduates.
As Congressman Miller said earlier, today student loan debt exceeds
$1.1 trillion. According to the Consumer Financial Protection Bureau,
student loan debt surpassed total outstanding credit card debt for the
first time in 2010. These staggering figures are truly unacceptable and
must serve as a wake-up call for developing a long-term solution that
helps, not harms, current and future borrowers.
As a result, it is shocking that the majority party would bring a
bait-and-switch scheme to the House floor, a bill that would force
students into loans with skyrocketing interest rates.
I find it shameful that H.R. 1911 would reduce the Federal deficit on
the backs of students and parents by saddling them with almost $4
billion in additional loan interest charges, and leave students worse
off than if Congress simply allowed student loan interest rates to
double on July 1.
High levels of student loan debt can limit where college graduates
live and work. It can affect the kinds of careers that students can
follow. High levels of debt can create obstacles for young people who
hope to start a family, to purchase a home and save for retirement.
To be clear, students and families deserve more from the U.S.
Congress, not less.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. GEORGE MILLER of California. I yield the gentleman an additional
10 seconds.
Mr. HINOJOSA. For these reasons, I urge my colleagues on both sides
of the aisle to oppose H.R. 1911. I suggest you do two things: one is
work to prevent interest rates from doubling on July 1, and second,
work to make college more affordable and accessible through the
reauthorization of the Higher Education Act.
Mr. KLINE. Mr. Speaker, I yield 2 minutes to the gentleman from
Tennessee (Dr. Roe), the chairman of the Health Subcommittee.
Mr. ROE of Tennessee. I thank the chairman.
I rise in support of the Smarter Solutions for Students Act. Student
loan debt, I agree with my colleagues on the other side of the aisle,
is a huge issue in this country.
And how did we get to the current rate of 6.8 percent, I asked
myself. I went back and reviewed it, and in 2006, the Congress decided
that interest rates were too high, so they wanted to lower the interest
rates, but found out they couldn't afford the cost of it.
So gradually, stepwise, it went down last year. In 1 year we had a
3.4 percent student loan rate tied to nothing other than the whims of
Congress. It created a fiscal cliff for loan rates. So we voted to
extend it for 1 year to give us time to have a permanent solution for
this.
The permanent solution that we're offering is to simply treat a
student loan like any other loan and tie it to a Treasury note plus 2.5
percent for a Stafford loan.
Now, what does that mean?
Certainly, Mr. Speaker, very eloquently, Mr. Miller spoke just a
moment ago about how rates can go. Variable means rates can change.
That's absolutely true. But rates can also go down. It doesn't
necessarily mean that rates will go up. And in acknowledging this, an
8.5 percent cap was put on those loans.
I checked the student loan rate if you went to your local bank or
credit union to see what a loan rate would be, and it's about 7 percent
now, higher than that.
And I agree with my good friend, Ruben Hinojosa, who believes that we
[[Page H2929]]
should work for ways to help make college more affordable. I could not
agree more.
The Secretary of Education, just this past Wednesday, said he agreed
and supported a permanent solution. The President said he supported a
market-based approach. This will give certainty to it, and certainly I
would urge my colleagues to vote and support this very-needed piece of
legislation.
Mr. GEORGE MILLER of California. I yield 2 minutes to the gentleman
from New Jersey (Mr. Andrews).
(Mr. ANDREWS asked and was given permission to revise and extend his
remarks.)
Mr. ANDREWS. Mr. Speaker, I thank my friend for yielding.
The question before the House this morning is whether we should make
college more affordable or less affordable, which is better for the
country.
If we do nothing by July 1, interest rates double on student loan
rates from 3.4 to 6.8 percent. This bill makes it worse. It will
actually increase college costs for a typical student by $5- or $6,000
over a 10-year period, $3.7 billion across the country.
There's a better way. The government's borrowing money today at 1
percent. Why don't we borrow the money at 1 percent, factor in the cost
of administering the loans and setting aside a reserve for default, and
charge that amount to the students, rather than run a profit-making
enterprise on student loans?
Mr. Tierney and others have taken the lead on this, Mr. Courtney has,
and that's the bill that I think is the appropriate long-term solution.
But I do know this. If you listen to any corporate leader, any
business leader in America, they tell you this: we will only grow and
prosper with a skilled workforce, and we will only have a skilled
workforce if higher education is affordable.
The simple question before the House is, if you think higher
education should be less affordable, vote ``yes.'' If you think it
should be more affordable, vote ``no.''
``No'' is the right vote. There's a better way. We should put that on
the floor and proceed that way.
Mr. KLINE. Mr. Speaker, I now yield 2 minutes to the gentleman from
Pennsylvania (Mr. Thompson), a member of the committee.
Mr. THOMPSON of Pennsylvania. I thank the chairman for yielding.
Absent congressional action, interest rates on student loans will
double from 3.4 to 6.8 percent on July 1. It's not that far away. We
need both parties and both Chambers working on solutions now. We can't
afford more last-minute, backroom deals and political brinksmanship.
The Smarter Solutions for Students Act is a commonsense approach.
This bill prevents the rate hike from happening and ends what has
become an annual debate within Congress on how to set the rates for
student loans.
This bill puts in place a rate that is more predictable and
affordable. It builds on a proposal put forward by President Obama in
his fiscal year 2014 budget request.
Now, both these proposals move to a market-based interest rate, not
one set by politicians in Washington. We have a responsibility to
America's youth to put forward a long-term plan for college
affordability. This bill is a good first step. It will offer students
the lowest possible rates for higher education by ensuring the solvency
of these important loan programs. And I encourage my colleagues to join
in support of this bill.
Mr. GEORGE MILLER of California. I yield 2 minutes to the gentleman
from Virginia (Mr. Scott).
{time} 1120
Mr. SCOTT of Virginia. I thank the gentleman for yielding.
I rise in opposition to the Making College More Expensive Act. In
2007, Congress cut the interest rate on student loans in half, from 6.8
percent to 3.4 percent, for 5 years. Last year, we extended that
benefit for 1 more year. In a few weeks, on July 1, if Congress chooses
not to act, the interest rate is scheduled to double back to the rate
of 6.8 percent.
Incredibly, this bill is so bad that, according to the Congressional
Research Service, students will actually be better off if Congress were
to let the rate double to 6.8 percent than to adopt this legislation.
This bill is also bad because it makes rates variable for the life of
the loan, therefore forcing students to sign for an interest rate that
will fluctuate over time so they don't even know what it's going to be
from one time to the next. This proposal essentially asks students to
sign up for loans without knowing what they're signing up for.
This is different from the Democratic proposals on variable interest
rates, because the President's proposal and the Democratic alternative
that was offered in committee have a variable rate; but once you sign
the loan, that rate is fixed for the duration, so you know what you've
signed up for. With the historic low rates now, you can sign up for a
loan rate that's probably much lower than any of the numbers that are
being considered. But this rate is so bad that the Congressional
Research Service estimates that if we return to normal rates, the
students will actually be worse off than if we just let the rates
double to 6.8 percent.
So I ask my colleagues to work diligently to improve access to
quality education by making higher education more affordable and
ensuring that the interest loan rates are reasonable, and that starts
with defeating this bill.
Mr. KLINE. Mr. Speaker, I yield 2 minutes to the chairman of the
Workforce Protection Subcommittee, the gentleman from Michigan (Mr.
Walberg).
Mr. WALBERG. I thank the chairman.
Mr. Speaker, recently, I had the opportunity to meet with more than a
dozen of Michigan's private colleges and university presidents. They're
working hard, as you might guess, to address the rising costs of
college education with their institutions and other institutions and
with students who desire an education. At the same time, this House,
under the direction of this committee, is working hard to address
student loan interest rates in a way that brings long-term stability to
the program.
The interest rate for federally subsidized Stafford loans is
currently set to rise to 6.8 percent on July 1, 2013, matching it to
the current unsubsidized Stafford loan rate. Other Federal loans have
rates as high as 7.9 percent. Any further temporary extension of the
current rate only kicks the can down the road. We've done this already.
In politicians versus markets, markets will always produce better long-
term results, and only those who refuse to deal with the truth of
history and reality would say otherwise.
Congress has a unique opportunity to institute long-term, bipartisan
reforms. Why not? We know in our hearts it's the right thing to do.
Both President Obama and the House have favored market-based solutions
to current rates. The Secretary of Education desires a long-term
solution like this as well.
Instead of another short-term fix, the Smarter Solutions for Students
Act provides a long-term solution to the student loan interest rate
problem. It returns all Federal student loans, except Perkins loans, to
a market-based interest rate and takes politics out of this part of our
children's education.
The only way this plan won't work is if the liberal, progressive,
central planners that control our government policy now are allowed to
continue their failed approach. And it is a failed approach. Pass this
bill.
Mr. GEORGE MILLER of California. I yield 2 minutes to the gentleman
from Massachusetts (Mr. Tierney).
Mr. TIERNEY. I thank the gentleman for yielding, and I draw the point
that was mentioned earlier that the Democrats made a promise to keep
these loans at 3.4 percent, and the promise is being broken. It's being
broken by this bill, this proposal by the Republican Party. We kept our
promise through the entire reauthorization of the Higher Education
Opportunity Act, and 2 more years in addition. This is the proposal
now. We say stay at 3.4 percent. Republicans say, no, jack it up more
than double on that basis.
I join with millions of students and parents and organizations that
represent them in strong opposition to this Making College More
Expensive Act that's before us here today.
My Republican friends talk about how this bill is simple and
predictable. It's predictable all right. I predict the rates are going
to go right up beyond the 6.8 percent rate. We've already seen
[[Page H2930]]
that from the Congressional Research Service, a nonpartisan group that
says, if we pass this Republican bill, those rates will go up more than
double on that basis. It is not simple.
They would have you believe through this debate that the rates are
going to go down to market rates, which, at the current time, are
lower. They would if you followed our bill at 3.4 percent. But if you
went with this bill of Making College More Expensive Act, it sets it
low for the first year but it rewrites the second year, and it resets
the third year and it resets the fourth year. So at the end of 4 years,
you get the whole package with the higher rate. And that is going to be
almost $4 billion more in cost for these students and parents than it
is for people right now.
The Congressional Budget Office said these interest rates would be
almost $4 billion. We know that to be the case. These are the same
people that tell us they don't want to burden our next generation with
the debt, but they apparently have no problem at all burdening the next
generation by burying them in student loan debt year after year after
year.
I have been hearing from people all over my district. In fact, one
woman from Wilmington wrote me and said that, when her son graduates
from college, his loans will equal what her husband and she paid for
their first home. With the interest rates he'll pay, it will be even
more. Something is not right with the system, she says. Both college
tuition costs and student loan interest rates are wrong.
She's right. This bill is wrong. Let's do the right thing. Let's have
3.4 percent now. In the interim, do a Higher Education Reauthorization
Act that takes care of this problem going forward.
Mr. KLINE. Mr. Speaker, in order to balance the speakers, I reserve
the balance of my time.
Mr. GEORGE MILLER of California. I yield 1 minute to the gentlewoman
from New York (Mrs. McCarthy), a member of the committee.
Mrs. McCARTHY of New York. Thank you, Mr. Chairman. I appreciate
that.
Mr. Speaker, I stand today against the Making College More Expensive
Act. Let me tell you why.
I represent a pretty large minority area, and over the last several
years, we've seen those scores in those students going up and up. For
the first time, we're seeing a higher rate of young people going to
college. This is not the time to be looking at making college more
expensive. They are first-time-generation students going to college.
This is wrong. This is supposed to be a family-friendly bill. For whom?
It's certainly not for my constituents.
I'm sorry also to say that what we're going to be seeing is that
after this bill passes--and it will probably pass today--it dies. The
Senate is not going to pick this up. So, again, we have wasted all our
time instead of working together to come to a solution.
Again, as you heard, according to the CBO, if Congress did nothing
and let student loan rates double on July 1, students would be better
off.
This is not a good bill. I ask my colleagues to vote against it.
Mr. KLINE. I continue to reserve the balance of my time.
Mr. GEORGE MILLER of California. I yield 1 minute to the gentlewoman
from California (Mrs. Davis), a member of the committee.
Mrs. DAVIS of California. Mr. Speaker, student interest rates are set
to double in a little over a month unless Congress stops it, and that's
why I rise today in opposition to the Making College More Expensive
Act. We should be considering legislation like the one my colleague,
Mr. Courtney, introduced to extend low interest rates for 2 years; but,
instead, we're debating a bill that makes students worse off than if
Congress does nothing. That's because, under this bill, student
interest rates would be subject to the whims of the market.
Today, interest rates are at an all-time low, but what about 5 years?
what about 10 years? what about 15 years from now? This bill lures
students in with a low variable rate, only to trap them with a higher
rate upon repayment. Well, Mr. Speaker, we've seen this bait and switch
before, only usually it was by credit card companies setting up shop
outside of college sporting events, not by the Federal Government.
We are not subprime lenders. The Federal Government should not be
profiting from students. It shouldn't be making $4 billion off of
students.
Mr. KLINE. I now yield 1 minute to a member of the committee, the
gentleman from Tennessee, Dr. DesJarlais.
{time} 1130
Mr. DesJARLAIS. Mr. Speaker, I rise today in support of H.R. 1911.
This commonsense bill, aptly named the Smarter Solutions for Students
Act, brings the student loan interest rate program back to reality.
Instead of coming back each year to partake in the Washington
tradition of putting last year's failures off to the next year, this
bill gives students and their families the certainty that their loan
rates won't be subjected to the whims of bureaucrats in Washington or
legislators on Capitol Hill.
This legislation ties student loan interest rates to the 10-year
Treasury note. In fact, the President's fiscal year 2014 budget request
included language very similar to this bill. H.R. 1911 goes even
further toward protecting students and families from high interest rate
environments by including caps on interest rates.
I encourage my colleagues to support this bill, and I thank Chairman
Kline and Virginia Foxx and their staffs for their hard work in
bringing this commonsense legislation to the floor.
Mr. GEORGE MILLER of California. May I inquire of the Chair of the
time remaining on both sides?
The SPEAKER pro tempore (Mr. Bishop of Utah). The gentleman from
California has 15 minutes remaining. The gentleman from Minnesota has
20 minutes remaining.
Mr. GEORGE MILLER of California. I yield 2 minutes to the gentleman
from Connecticut (Mr. Courtney), a member of the committee.
Mr. COURTNEY. Mr. Speaker, it is amazing. At a time when we know that
student loan debt now has skyrocketed above all other forms of consumer
debt--credit card debt, car loan debt--and students are now graduating,
on average, with over $25,000 of student loan debt, a ticking clock 38
days away where the rates are going to double, the bill that the
majority has come forward with makes the problem worse, not better.
Again, the analysis from independent sources--the ones that we rely
on to make decisions in this body, the Congressional Budget Office and
the Congressional Research Office--make it clear that if we do nothing,
the interest costs for the average Stafford loan will add $4,000 in
interest payments. If we pass this bill, the interest will rise by
$5,000. So the notion that this is somehow a solution to the problem,
the misnomer that this bill is given, the reverse is true.
Mr. Speaker, we know that the Senate is not going to move over the
next 38 days; they're doing the farm bill, they're doing immigration
reform. It is time to protect students by extending the 3.4 percent
rate, a rate, which I hasten to add, that was passed in 2007 with a
large bipartisan majority, signed into law by George Bush, was extended
again last year with large bipartisan majorities, signed by President
Obama. Let's do a 2-year extension, and then let's get to work with a
5-year Higher Education Reauthorization Act.
The problem with higher ed is not about Stafford loans only; it's
about Pell grants, it's about Perkins loans. It's about students not
being given good information in high school. It's about allowing
graduates to refinance their debt, which they are now confronted with
large barriers to. That's the real work to solve the higher education
challenge and issue in this country. In the mean time, let's extend the
2-year rates.
Mr. Speaker, I have letters from 21 campus-based organizations
representing real live college students all across America who support
the Democratic measure to extend those rates, get a good higher
education authorization bill, and totally--totally--reject the measure
that's on the floor today, the Make College More Expensive Act.
Mr. KLINE. Mr. Speaker, I reserve the balance of my time.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield 1\1/2\ minutes
to the gentlewoman from Oregon (Ms. Bonamici), a member of the
committee.
Ms. BONAMICI. Mr. Speaker, I rise today in opposition to the Making
College More Expensive Act, a bill that
[[Page H2931]]
will potentially make college more expensive for thousands of students
and families across the country.
Across America, students and graduates are trapped under a trillion-
dollar mountain of student loan debt, and with this bill, the problem
is about to get worse.
On July 1, interest rates will double for millions of students
entering college. But this bill is not a constructive solution; in
fact, this bill will make the problem worse.
Rates are currently 3.4 percent, and they will double to 6.8 percent
if we do nothing. But under this bill, the rates will be uncertain
because they will be variable, and will be as high as 8.5 percent.
According to the Congressional Budget Office, this legislation will
force students to pay thousands more in interest than if Congress
simply does nothing and lets the rates double.
It's just not fair. On average, middle class families haven't seen a
raise in years. Many are working harder for less money. They're
struggling to buy everything from groceries to gas. They're relying
more on the Federal student loans programs to finance the growing cost
of college.
But instead of debating how much we should lower rates, instead of
considering comprehensive reforms to address college costs, we're
actually considering legislation that would be worse than if we did
nothing at all.
Mr. Speaker, this is unproductive, unreasonable, and unacceptable. I
urge my colleagues to vote ``no.''
Mr. KLINE. Mr. Speaker, I'd like to yield 3 minutes to another member
of the committee, the gentleman from Indiana (Mr. Messer).
Mr. MESSER. I would like to thank Chairman Kline for his hard work on
this bill. I'd also like to thank Subcommittee Chairwoman Foxx for her
hard work.
I rise today in support of H.R. 1911, the Smarter Solutions for
Students Act.
This debate is about a fundamental question: Who do you trust more--
the promises of Big Government or the private market setting rates in
the marketplace?
I believe we must return to a market-based policy rather than keeping
Congress in the business of fixing interest rates by throwing darts at
a dart board.
Let me make two simple points to this Chamber. First, markets work.
The President has recognized this, Education Secretary Duncan has
recognized this. They both have called for a return to market-based
rates and policies on our student loan interest. Families deserve the
security of knowing that the marketplace will be setting their interest
rate, not the results of the next mud wrestling match in Congress.
We've heard a lot of rhetoric on the other side of the aisle about
how rates will rise if we change this policy. Lost in that rhetoric is
the fact that over the course of the last decade there have been times
where interest rates would have been much lower had we had a market-
based approach to interest rates.
In 2002, student groups lobbied Congress to set student loan interest
rates at a fixed 6.8 percent, beginning in the 2006 academic year. At
that time, rates on student loans were variable and at historically low
levels. However, student groups believed that a 6.8 rate would result
in a better deal. It turned out they were wrong. Through that period,
interest rates--had we stayed at a variable rate--would have been 2.36
percent. I don't think it's fair to those families that accumulated
loans during those times that we had the government in the way.
The second point I think that needs to be made in this debate is that
while we need to have low interest rates for students--and we're all
concerned and want to make sure they don't rise--the real threat to
young people in this country is not a few dollars on their interest
loans.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. KLINE. I yield the gentleman 1 minute.
Mr. MESSER. The real threat is the explosive growth of debt in this
country, the fact that we are adding $1 trillion of debt each year,
$6,800 of debt per taxpayer each year. It's dragging down our economy
and hurting our ability to create jobs.
Let's return to commonsense policy on interest rates. I urge my
colleagues to support H.R. 1911.
Mr. GEORGE MILLER of California. I yield 1 minute to the gentleman
from Vermont (Mr. Welch).
Mr. WELCH. I thank the gentleman.
Mr. Speaker, I rise today in opposition to the Making College More
Expensive Act.
Mr. Speaker, what we're doing is just not right. The Federal
Government is borrowing money at 1.8 percent. Then we're lending it--
now--at 3.4 percent. If we do nothing, it goes to 6.8 percent. And
under this bill, it probably will hit up around 10 percent. We're
ripping off kids. I mean, we're making money off of these kids. A
confident Nation will invest in the dreams of our young people, it
won't crush those dreams.
Why are we doing it? You know what? We're borrowing money as a
government at 1.8 percent. The Federal Reserve is lending money to the
big money center banks at 0.75 percent. But we're going to be charging
up to 8 or 10 percent to our kids? I don't get that.
Families are sitting around the kitchen table having discussions--if
they have three kids, which two can we send to college?
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. GEORGE MILLER of California. I yield the gentleman an additional
30 seconds.
Mr. WELCH. Parents who thought they had equity in their home and were
going to be able, after working 30 years of work, to finally take that
cruise or that vacation, they're refinancing their home to help their
kids. And despite that--which compromises their retirement--their kids
are getting out of college in Vermont with an average debt in the range
of close to $30,000.
It's tough on the kids, it's tough on the parents, it's bad for our
economy, and it's just not right. We borrow, the Federal Government, at
1.8 percent, and we're going to charge up to 8 percent for families?
We're lending to the banks at 0.75 percent.
{time} 1140
Mr. KLINE. Mr. Speaker, I reserve the balance of my time.
Mr. GEORGE MILLER of California. I yield 1 minute to the gentleman
from California (Mr. Swalwell).
Mr. SWALWELL of California. I rise in opposition, Mr. Speaker, to the
Making College More Expensive Act.
How short are some of the memories of my friends on the other aside,
for it was market-based principles, unregulated market-based
principles, that led to the housing crisis that we are just now getting
out of.
Doubling the student loan rate is an attack on students. The
increased debt that they will take on will build a great wall around
our middle class. There's no better way to have a healthy, growing
middle class than access to education.
Today, our middle class is shrinking. If you're in the middle class,
you're making about $5,000 less than you were 10 years ago. If you're
in the middle class, you owe about $25,000 more in debt than you did 10
years ago. Doubling the rates will increase the debt that our middle
class has.
I know a thing or two about student loans. I have thousands of
dollars of them myself. This is not just dollars on interest rates. We
are talking thousands of dollars that individual borrowers like myself
and the people that grew up with me in a middle class town called
Dublin will take on.
Let's tear down this great wall that the GOP and the House leadership
are trying to build around our middle class. Let's not double the
rates.
Mr. KLINE. I continue to reserve the balance of my time.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield 1\1/2\ minutes
to the gentleman from Rhode Island (Mr. Cicilline).
Mr. CICILLINE. Mr. Speaker, I thank the gentleman for yielding.
I rise in strong opposition to the Republican Making College More
Expensive Act that we're considering today. Market-based systems will
drive up the cost for millions of middle class families but will, of
course, also benefit some of our biggest banks and other financial
institutions.
If we want to get our country back on the right track, put men and
women
[[Page H2932]]
back to work and ensure that we remain competitive in the global
economy, we have to do more to make higher education more accessible
and more affordable, not more expensive.
Without Congressional action, the interest rate on Federal subsidized
Stafford loans is scheduled to increase from 3.4 percent to 6.8 percent
for more than 7 million students. We should not be making a profit on
student loans--period.
We have proposals that will end this practice and give students
access to college at the lowest cost possible. Unlike this bill, the
Student Loan Relief Act, the Responsible Student Loan Solutions Act,
and the Bank on Students Loan Fairness Act would each preserve low
interest rates for students.
The bill before us today is a bad Republican idea that will make
college more expensive for working families and will benefit some of
America's largest financial institutions who will earn billions more in
student loan interest. Hidden within this bill is a blatant bait-and-
switch scheme that will allow students to borrow money at one rate
before the interest rates skyrocket.
Let's reject the Making College More Expensive Act and find a
serious, long-term solution on student loans that will make college
more affordable for millions and millions of American students.
Mr. KLINE. I continue to reserve the balance of my time.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield 1 minute to the
gentleman from New York (Mr. Meeks).
Mr. MEEKS. Mr. Speaker, I'm puzzled. This is not the America that I
know. It can't be.
When we were growing to make ourselves a great Nation, we were
talking about trying to make sure that our young people had a free
education. I can't figure out what's going on here. So many Americans
that are doing well now, when I talk to them about when they were going
to school back in the forties and the fifties and the sixties, it was a
free education. Now we want to ask our young people, the ones that are
going to be the middle class, the ones that are going to strengthen
this country, to be more in debt than ever.
How could we say to our students--when we're talking about financial
literacy everyplace and trying to teach them how to be financially
able--that you've got to take a bait-and-switch loan? Didn't we learn
anything from this last financial crisis?
What are homeowners doing now? All who had these adjustable-rate
mortgages, all of them are running to make the adjustable-rate
mortgages fixed-rate mortgages. And yet we take what we say are our
precious resources--our children--to say that you've got to pay these
resources is ridiculous. Some are wealthy, some are not.
Mr. KLINE. Mr. Speaker, I continue to reserve the balance of my time.
Mr. GEORGE MILLER of California. I have no further speakers.
Is the chairman the last speaker?
Mr. KLINE. I am prepared to close.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself the
balance of my time.
I want to thank all of my colleagues who entered into the debate here
this morning on this legislation. I think it is clear that there is a
very big difference between our positions on this legislation; there's
a very big difference between the President's bill, who is trying to
use a market system, and this bill before us, Mr. Kline's bill, that
uses a market system.
The fact is that the President's bill saves students billions of
dollars, but the Republicans would not make President Obama's bill in
order for consideration. Why not? They say it's like they're doing the
same thing as the President. Well, they're not. In fact, they're adding
$4 billion worth of debt onto the backs of students over their program.
And how can they possibly do that? You've heard my colleagues on this
side of the aisle speak to the issues that we hear all of the time when
we go home. The struggle of students, the struggle of families, be they
low-income, be they middle-income, to get access and to be able to
complete a college education, to get access to a community college, to
a State college system, to get a certificate, to get a degree that will
allow them to participate in the American society, in the American
economy. That's part of the American Dream.
Yes, we lowered the interest rates to 3.4 percent, and they've held
over a period of years. And they held over those exact same years when
families were under the most stress because of this recession that was
created on Wall Street and the scandals that took away 70 percent of
the wealth of African American and Hispanic families in this country,
that destroyed the equity and good chunks of middle America because of
teaser rate loans, subprime loans.
And what is happening today in the private market? The banks are
getting money from the Treasury at 0.75 interest, and they're loaning
it to families in private student loans. If you have good credit,
they'll loan it to you for somewhere around 7 percent.
Bankers used to go die and go to heaven if they could get a 7 percent
spread. That's how you become a billionaire. Get it at 0.75 and put it
out at 7. And if your credit rating is not so good, those statistics
sort of suggest you drift towards 13 percent.
Obviously, the students and middle class can't survive in that market
for the most part, and that's why we have a student loan program.
That's why we took this program away from the banks a number of years
ago. We took the $60 billion that we were giving to the banks to loan
the public's money to students and we said why don't we put that to use
for families, and we did.
And we lowered the interest rates, and we increased the participation
in the Pell Grants, made it available. We increased some loan limits.
We gave people a chance to manage their debt after they graduated, so
the more you earn, the more you pay, but you don't get crushed on your
first job that may not have the best salary, even though it's the
career you want to go in and it takes time to get that salary. We made
it more affordable for America's families.
Yes, we lowered the debt to 3.4 percent. It was paid for, and that's
all we could afford. Congress will make that decision. Last year, the
Congress made a decision to extend it. This year, they've decided that
they don't want to extend it on the other side of the aisle. So, fine,
come up with a plan. But the plan they came up with is worse than
having the 3.4 percent double on July 1.
How can you develop a plan that's worse for students? I guess maybe
if you go home and everybody in your district is working and everybody
is participating in this slow-growing economy that's getting better. I
don't know. Families I represent, they're still struggling. The
recession hasn't left town. The recession hasn't left the country.
If you pick up The Wall Street Journal today, there's greater concern
about what's happening in China dragging down the world economy,
there's greater concern about the Europeans dragging down the world
economy. America is trying to struggle and the students are trying to
struggle, and we're going to come along and more than double the rate.
We're going to give them a teaser rate, though. This next September
when families go out and they get a rate, it will be probably somewhat
lower than the current rate. But that loan will be adjusted, and they
don't know what those rates are going to be. As long as they're paying
on that loan, that loan will continue to be adjusted. We just saw that
history in America. We saw what that did.
I don't have a problem going to a market system. How about a fair
one? When the President went to a market system for the subsidized
Stafford loan, he said on the market system we'll go to 0.9. They said
they would go to 2.5--10 years plus 2.5. The President said 10 years
plus 0.9.
{time} 1150
There are a lot of ways to go to a market system. You don't have to
punish the American family. You don't have to punish the students in
school to go to a market system. I wish the President had a cap. The
gentleman has a cap. This could be worked out, but we don't do things
bipartisanly anymore in the Congress of the United States. So, because
we can't get the President and the majority on the Education and the
Workforce Committee to sit down and work out the market system--because
that's not allowed and
[[Page H2933]]
we don't do bipartisan work--the victims are going to be the families
and the students, and, in the long term, our Nation.
Every Member of Congress has come to this floor and has said how
important this education system is to our future economic growth, to
competing in a globalized world, to have innovation, to have discovery,
to have job creation. We're now creating a drag on job creation. We're
now creating a drag on the opportunities for families. We are creating
a drag on the ability to achieve the American Dream--and a college
education is part of that dream, but a college education is also
critical to keeping this economy and this society moving.
I would hope that my colleagues, whether they are committed to a
market rate or not, would understand that this is a very flawed market
rate.
Mr. Speaker, I yield back the balance of my time.
Mr. KLINE. I yield myself the balance of my time.
Mr. Speaker, as always in these debates, there is a lot of confusion,
and there is a lot of misinformation. We are using that old thing about
``figures lie and liars figure,'' and you've got different guesses for
interest rates and reports and all those sorts of things, and I want to
get into some of that, but some of it is at the core of our differences
here. Let's get a couple of things straight.
We watch what has happened as Congress tries to chase an interest
rate and gets in political battles year after year. You'll remember
that the 6.8 percent that was put in law was considered a good deal.
Then there was the plan to take it from 6.8 percent to 3.4 percent for
all loans. It didn't work. It costs a lot of money, and it's added to
the debt, which is a problem that is still nagging us to this day. So
interest rates were taken from 6.8 to 3.4 percent gradually over years.
It got down to the point where, for 1 year, the interest rate on
subsidized Stafford loans--not the unsubsidized Stafford loans, not the
PLUS loans, because we didn't have the money for that--took it down to
3.4 percent for 1 year, and then there wasn't enough money. So, by law,
the interest rates on those loans went back up to 6.8 percent, and last
year, an election year, we had a big political fight, and that's what
you can anticipate, apparently, forever as politicians try to use this
as a political pawn and fight over what the student loan interest rates
ought to be and what can be afforded.
Mr. Speaker, what can be afforded counts because a problem, as I
said, that is continuing to nag us is we have a mountain of debt in
this country. We've been running deficits year after year of over $1
trillion. We've got over $16 trillion in debt. We have to face that
issue here coming before us. So, while we would like all student loan
interest rates to be low and as we want to get them as low as we can,
we don't want to add to the mountain of debt that's out there.
We thought that it would be a good idea to let the free market
determine what those rates ought to be, and we came forward with a
proposal, and we talked about our proposal with our colleagues on the
other side of the aisle--staff to staff, hour after hour--trying to
beat this out staff to staff and in talking to the White House and the
Department of Education about what we're doing and what they're doing
and what might work out. I talked to the Secretary of Education before
this bill was ever introduced because I agreed with the President and
the Secretary that we needed a long-term solution and to get out of
kicking this can down the road with annual--or maybe it's semiannual or
biannual--political battles.
So we moved to the market. We used a 10-year Treasury that the White
House was proposing using--center Republicans wanted to use a 10-year
Treasury--and then we worked it, Mr. Speaker. We worked it and worked
it to get it as close to budget-neutral as we could possibly get it
because we want to help students, and we wanted to give them certainty,
and we wanted them not to rely on the whims of politicians here, and we
wanted also not to put the burden on the American people and the
taxpayer, and we wanted not to add to that debt. So we tried to get it
close to zero.
We've seen charts down here--I love charts, particularly colored
charts. We've seen charts down here that say that our bill is adding
billions of dollars to student debt. Well, we've got a counterproposal
over there. I think the gentleman from California offered it. It's the
President's proposal, President Obama's plan. That additional debt to
students is $3.1 billion--ours is $3.7 billion--over 10 years. We tried
to come together on this. Mr. Speaker, I think we can continue to try
to come together on this, and we need to move this forward.
There are a lot of things we need to do to help students. Certainly,
one of them is to help graduates get to work. Half of all college
graduates now are underemployed or unemployed, doing things, working in
places, employing none of the skills that they learned in college. We
need to get the economy going. We're still asking, Where are the jobs?
We need to get Americans back to work. You can't get Americans back to
work if you just keep piling on mountains and mountains and mountains
of debt and piles of regulations, but that's a fight for another day.
Income-based repayment systems we didn't touch in our bill, but there
are some interesting proposals out there we want to look at. Right now,
with this bill, we're just trying to determine who is going to set
interest rates--politicians here or the market.
So here is what we've heard from the other side today: that
Washington should be in charge of setting interest rates on student
loans, that Washington should be in the business of creating confusion
and uncertainty for student loan borrowers. Washington cannot agree to
a long-term solution that will serve the best interests of students and
taxpayers. I think we need to keep working to do that.
It was pointed out that the Senate won't act. Well, for many of us in
this body, that's not a lot of news, but July 1 is still July 1, and
there is an incentive over there, and I believe the Senate must take
action. I look forward to working with them to achieve the long-term
solution that I think that we all need to see.
It was pointed out that we have a variable rate. The President has a
variable rate but then his fixes. Certainly, under our law, when you
graduate, if you're in a low-interest environment, you can consolidate
those loans and fix them for the duration of however long you're taking
to pay off those loans. If it's in a high interest rate environment,
you may not want to do that. In the other plan, you've already got a
fixed rate.
We believe we can work together. The only way we can continue to work
together to solve this is to pass this legislation. Pass it today. I
urge my colleagues to reject the failed status quo and to embrace a
responsible long-term solution on behalf of students, families, and
hardworking American taxpayers. I urge my colleagues to support the
Smarter Solutions for Students Act.
I yield back the balance of my time.
Mr. VAN HOLLEN. Mr. Speaker, I rise today in opposition to H.R. 1911,
the wrong approach to a very real problem for our nation's students.
As we all know, the interest rate on student loans will double in
July if Congress does not act. But today's legislation is not the
solution. In fact, today's bill will make student loans more expensive,
not less.
Student loan debt already tops $1.1 trillion, burdening recent
graduates with high monthly payments even as they struggle to find jobs
and start their lives. With that much debt at the start of their
careers, they may put off purchases like a home or a car. But rather
than address that problem, today's bill would add $3.7 billion in
additional loan interest charges over the next ten years. In fact, if
we did nothing and allowed the student loan interest rate to double,
students would be better off than they would be under H.R. 1911.
Today's bill also makes it difficult for students to accurately
predict their college costs. Under this proposal, the interest rate on
loans would be recalculated every year for the life of the loan.
According to Congressional Budget Office estimates, interest rates will
be higher than current rates for seven of the next ten years. A
borrower who takes out a loan next year under the Republican plan would
see his interest rate more than double by the time he starts repaying
that loan in 2017.
Mr. Speaker, we need a comprehensive solution to the problem of
student debt that includes affordable financial assistance and works
with states and colleges to keep costs
[[Page H2934]]
down. It is time to reauthorize the Higher Education Act--let's take
this opportunity to negotiate a sustainable, long-term plan that works
better for students.
Mr. CICILLINE. Mr. Speaker, I rise in strong opposition to the Making
College More Expensive Act that we are considering today. If we are
serious about getting our country back on the right track, putting
people back to work, and ensuring that we remain competitive in the
global economy, we have to do more to make higher education more
accessible and more affordable, not more expensive. Without
Congressional action, the interest rate on federal subsidized Stafford
loans is scheduled to increase from 3.4% to 6.8% for more than seven
million students.
The United States Government should not be making a profit on
student loans. Period.
And there are several proposals pending before the House today that
would give students access to college at the lowest cost possible.
Unlike this bill, the Student Loan Relief Act, the Responsible Student
Loan Solutions Act, and the Bank on Students Loan Fairness Act would
each preserve low interest rates for students. But the bill before us
today is a bad Republican idea that will make college more expensive
for working families. This bill before us today will make college more
expensive to millions of Americans.
According to the independent, non-partisan Congressional Research
Service, students with five years of subsidized Stafford loans borrowed
at the maximum amount would owe $4,174 in interest under current rate
and $8,808 if we allow interest rates to double on July 1st. But under
this proposal, students would owe a total of $10,109 in interest
payments on their loans.
Hidden within this bill is a blatant bait and switch scheme that
will allow students to borrow money at one rate before their interest
rates skyrocket. Our friends on the other side of the aisle like to
claim that putting student loans into the ``marketplace'' is a cure-all
for increased student debt. But in this case, ``marketplace'' is code
for billions of more dollars in interest payments as this bill would
prevent students from enjoying the lowest available interest rates.
Let's reject the Making College More Expensive Act and find a
serious long-term solution on student loans that will make college more
affordable for millions of Americans.
Ms. WATERS. Mr. Speaker, I rise today in strong opposition to H.R.
1911--the Smarter Solutions for Students Act. Mr. Speaker, this
terrible bill should instead be called the Making College More
Expensive Act because that is exactly what it would do if passed
through Congress.
Instead of making college more affordable for students, H.R. 1911
would burden students with an additional $4 billion in loan interest
charges relative to current law. According to a recent study by the
Federal Reserve, there is plenty of evidence that student loan debt has
negatively affected a student borrower's participation in our economy.
With the national student loan debt already topping $1.1 trillion, H.R.
1911 would only deepen the college debt crisis students are now
experiencing in America.
Over the past couple of years, legislators have been repeatedly
warned about the impacts student loan debt has on economic growth. Even
the Federal Reserve has identified that student debt is the likely
cause of delays by American college graduates in purchasing homes and
cars or starting families.
H.R. 1911 is a bait and switch scheme that does nothing to remedy
this issue. This bill only makes it more expensive to attend by forcing
students and families to accept loans with skyrocketing interest rates
that increase annually.
Just this past weekend, students from all over the country in the
class of 2013 graduated with an average debt load of $30,000 (Source:
Mark Kantrowitz--publisher of FinAid.org analysis). When adjusted for
inflation, that's roughly double the average amount of debt students
graduated with 20 years ago.
The passage of this bill would continue this trend by changing
student loan interest rates from year-to-year based on the 10-year
Treasury note, marked up by 2.5 percent to 4.5 percent. As a result of
this variable rate, federal student loans taken out by incoming
freshmen class of 2013 would at first be at a lower rate; however, by
the time this class of freshman graduates in 2017, the interest rate on
their loans is projected to be 7.4 percent, more than double today's
current 3.4 percent rate for subsidized Stafford loans.
The Consumer Financial Protection Bureau, CFPB, released a report
this month citing the long-term impacts of high student loan debt. The
CFPB found ``As a growing number of young consumers have been unable to
participate more fully in the housing marketplace, the segment of young
consumers that remains interested in becoming first-time homebuyers may
face new barriers to homeownership. The National Association of Home
Builders (NAHB) stated that higher student debt burdens ``impair the
ability of recent college graduates to qualify for a loan.'' According
to NAHB, high student loan debt has an impact on consumers' debt-to-
income (DTI) ratio--an important metric for decisions about
creditworthiness in mortgage origination.
I have long championed the importance of developing the next
generation of entrepreneurs and innovators to lead our country boldly
in the 21st Century. Yet, the CFPB report found that student loan debt
is poising a barrier to young entrepreneurs.
According to the report by CFPB ``For many young entrepreneurs, it is
critical to invest capital to develop ideas, market products, and hire
employees. Student debt burdens require these individuals to divert
cash away from their businesses so they can make monthly student loan
payments.'' Is this the future we want for our nation's student
borrowers? Instead of building businesses, buying homes, and having
families they are being crushed by the weight of student loan debt.
This is not the future I want for current and future student borrowers.
Attaining an education is one of our Nation's founding principles. We
should be working on finding solutions to lower the cost of education
for our nation's youth rather than debating legislation designed to
earn another $3.7 billion in revenue from struggling student borrowers.
This bill is egregious.
Mr. Speaker, it is clear to my Democratic colleagues and I that
college affordability is still a pervasive issue in America. It is also
clear, that this issue will require more than just a temporary fix. In
order for us to maintain our competitive edge as a nation, we need to
support every single American who desires to pursue a higher education.
Congress needs to pass meaningful legislation that actually solves this
problem and not perpetuate it. Let's start by voting no on H.R. 1911
and support our American students by not saddling them with
insurmountable debt.
Mr. DINGELL. Mr. Speaker, once again House Republicans refuse to
address the affordability of higher education head on and instead are
using sleight of hand to make students think their interest rates will
remain low. The awful truth is that H.R. 1911 will add even more to the
already $1.1 billion of student debt in this country and further
increase the cost of getting a college education.
As we continue to recover economically, we must ensure that students
can afford a higher education. In 2007, as we were dealing with the
worst of the recession, I voted in favor of legislation to reduce
interest rates on Stafford loans from 6.8 to 3.4 percent. On July 1,
interest rates will go back to 6.8 percent if Congress does not act.
An increase to 6.8 percent will add an additional $1000 in debt over
the lifetime on a student's loans. However, the non-partisan
Congressional Budget Office estimates that under H.R. 1911 interest
rates will rapidly increase to 7.7 percent by 2018. This bill does not
guarantee lower interest rates. In fact, it does the opposite. The CBO
does not project that interest rates will come down any time in the
next 10 years. This is a hard truth students and their families cannot
afford.
I am a proud cosponsor, along with 138 of my colleagues, of H.R.
1595, the Student Loan Relief Act by Representative Joe Courtney, which
keeps the interest rate at 3.4 percent through 2015. That gives the
Congress time enough to address comprehensive legislation to amend the
Higher Education Act and develop long-term solutions to address student
loans.
There are nearly 48,000 students attending a university or college in
my district who have a Stafford subsidized student loan. Those loans
total over $212 million. Increasing the interest rate will add an
unnecessary burden on those students as they graduate and enter the
workforce. We must do everything we can to help as they get started.
We should not have to choose how we are going to invest in our
country's future. Republicans don't seem to realize that by not finding
a compromise, they are playing politics with students, families, and
the future of our country.
Mr. GENE GREEN of Texas. Mr. Speaker, I rise today to express my
opposition to H.R. 1911, the Smarter Solutions for Students Act.
This bill will return federal student loans to a system of market-
based variable rates, an imprudent policy that seeks profits for
deficit reduction at the expense of students struggling with the
substantial and ever-climbing cost of post-secondary education.
With federal student loan interest rates set to double on July 1,
2013, Congress must act quickly to extend the current rate, rather than
passing legislation that hurts students and families. According to the
Congressional Research Service, H.R. 1911 will actually make it more
expensive for students than if Congress did nothing and let the current
interest rate expire. The Congressional Budget Office estimates this
bill will cost students and parents an addition $3.7 billion in
additional interest charges over the next 10 years.
[[Page H2935]]
This is unacceptable. Approximately 60 percent of students take out
loans to attend college and increasing the costs of borrowing will
prevent millions from being able to pursue higher education. Last year
the total amount of student loan debt reached $1 trillion and the
average borrower from the class of 2011 graduated with $26,600 in debt.
College educated students are the future engine of our country, and
anyone who wants to pursue a post-secondary education should have the
opportunity to do so without going into crushing debt. I urge my
colleagues to extend the current interest rate of 3.4 percent for two
years and find a true long-term solution to the cost of college worthy
of our nation's young people.
Mr. CONYERS. Mr. Speaker, I rise today to oppose H.R. 1911, the so-
called ``Smarter Solutions for Students Act''. I propose a more
accurate title ``The Making Kindergarteners Pay for Our Mistakes Act of
2013.'' I must confess that every time I hear someone say they support
austerity for the children, I am forced to question their understanding
of economics. I try not to question their motives, but on a day like
today--that is a struggle I am hard pressed to win. This bill does
little more than turn the United States government into a payday
lender--charging students interest that far outstrips the government's
cost of lending. Instead of a fixed interest rate, that will let
parents and students know how much their education costs, this bill
sets interest at a variable, market rate--plus a nice little premium
for the government. I wonder what fury my friends across the aisle
would raise if we were to treat banks in a similar manner.
This fall's incoming class of students born in 1994 and 1995 was in
kindergarten when Republicans seized control of our country and its
surplus, and moved us quickly to deficit and debt. While these children
were learning how rewarding it was to read, my colleagues across the
aisle learned how remunerative it was to pass unfunded tax cuts and
unfunded wars onto those children. While they let wages stagnate--an
act which continues to this day--and they cut funding to schools--
another policy which continues to this day--they reaped millions in
campaign contributions from the billionaire's whose taxes they cut, the
military contractors to whom they brought billions. Now, my friends
across the aisle will vote to ensure students who were five when
Republicans started running up the debt, will pay down that debt as the
price of going to college.
Today a college degree is more necessary than ever, and more
expensive than ever. Unlike my friends across the aisle, I remember
that my own education was subsidized by the state. Unlike my friends
across the aisle, I don't brag about paying for my college education
during a time when our Federal and State governments looked out for
students and the poor--when education was treated as a public good, and
the minimum wage far outstripped its modern equivalent.
The modern Republican party--many of them bragging about their in-
state educations when they want to stress how much they understand the
common person's experience--have all but officially declared for the
for-profit model of education. Cut funding, and cut funding, and cut
funding to the school. Push more of the cost onto students. Use those
students to profit. I apologize that we cannot politely agree to
disagree, but treating our children as a cash cow while proclaiming
concern about our children does not pass the test of well-meaning
debate. If they want the government out of the educating children
business, then say so. But don't treat public education as a chance to
pay down the debt. Children born in 1995 aren't the reason for our
problems--Republican policies are. Eighteen-year-old kids didn't force
them to increase inequality; 18-year-old kids didn't force them to
destroy American meritocracy by securing inherited wealth for the child
of every billionaire and denying opportunity to low-income children;
18-year-old kids didn't make them destroy the middle class to secure
greater wealth for those who line your pockets with contributions.
The promise of the American middle class was created when affordable
education made the prospect of a good paying job possible for every
child. If they want to destroy it, say so. If they want to take out on
our children their own guilt about the haphazard, excessive spending of
Republican administrations, say so. If they don't care about our
children--at least not those who don't benefit from the millionaire tax
cuts they pass at every opportunity--just say so.
I urge my friends across the aisle to look at their own actions, and
reassess if they can in good conscience support taking more from
children just entering into the adult world. I urge them to drop this
bill and begin working on a real solution, one that provides the next
generation the same opportunities they were provided.
Ms. JACKSON LEE. Mr. Speaker, I rise in opposition to H.R. 1911, the
Smarter Solutions for Students Act because this bill becoming law would
be worse than allowing student loan interest rates to double on July 1,
2013.
If Congress does nothing the student loan interest rate will rise
from 3.4 percent to 6.8 percent on July 1st. As Members of the
Congress, we know what this will mean for students in our states and
what it will mean for colleges and universities in our Congressional
Districts.
The bill H.R. 1911 does not fix the problem of higher interest rates
for student loans, but places a greater financial burden on young
professionals just starting out in life. The Treasury 10 year rate over
the last several years is abnormally low due to the weak economy, but
in years when the economy was strong the rate was consistently above 6
percent or more. This is the rate that H.R. 1911 would use to calculate
student loan repayment not over the life of the loan, but each time
funds were provided.
I have a strong interest in how student loan repayment plans impact
graduates. During the last Congress, I introduced the College Literacy
in Finance and Economics Act of 2011 or College LIFE Act to address the
challenges faced by African American and Hispanic students who sign
loan agreements, but may not have the financial literacy to comprehend
the significance of taking on long-term debt.
My bill directed that eligible institutions provide financial
literacy counseling to borrowers within 45 days after students receive
their loan.
Literacy counseling under the College LIFE Act would require: a
minimum of two 4-hour counseling sessions, the first when a student
receives a loan payment, and the second when student's complete their
study.
The focus of financial literacy education under the College LIFE Act
was to make sure students knew through counseling what they were
agreeing to in signing up for and receiving a student loan.
Counseling would provide information on student education financial
options that went beyond loans and included scholarships. Student
financial literacy programs can provide insight into information on
loan management and the basics of personal financial management.
The bill would have also provided financial education that taught
students how to: make a budget, prioritize financial decision making
related to how to balance income, expenses and personal spending,
develop realistic goals based on income, and manage credit and debt.
Students would have learned how to understand credit scores, credit
cards, and investing so that they could become better financial
consumers.
The College LIFE Act would have benefited thousands of graduating
students. In the City of Houston, this spring I have participated in
commencement exercises for the University of Houston, Texas Southern
University, Houston Community College and Lone Star College North
Harris. There are thousands of new graduates just in the City of
Houston alone who are ready to pursue their dreams, but who will wake
up to the reality of tens of thousands of dollars in debt.
I am proud to call Texas Southern University a constituent of the
18th Congressional District of Houston Texas. Texas Southern University
is the third largest Historically Black College and University in the
Nation. I joined Texas Southern University's current president Dr. John
Rudley at the school's commencement. Texas Southern University has a
long proud history of success in the students it has sent forth.
The school was founded in September of 1927 with a loan from the
Houston Public School Board. This was not a loan intended to saddle the
school with a debt too great to survive. For this reason, along with
hard work and the dedication of faculty, students and the Houston
Community, the University will celebrate its 86th anniversary this
year.
Texas Southern University's loan statistics for the 9700 students
attending the school tells us why financial aid is important:
Eighty-one percent of the students attending the school receive some
form of student financial assistance.
Texas Southern University received $85 million in student financial
aid revenue for graduate and undergraduate students.
Due to a change in how the Department of Education determines
eligibility for parent student loans, there are over 400 fewer students
attending Texas Southern University this year.
Changes to student loan rules--no matter how minor--can result in
major consequences for a young person's prospects for a college or
university degree. A college degree can open up a world of
opportunities that would otherwise not be available.
I spoke at Texas Southern University's commencement exercise and was
pleased to be joined by Michael Strahan, a Texas Southern University
Alum who is a co-host of Live with Kelly and Michael.
Not all Texas Southern University graduates are as famous as Michael
Strahan, but many
[[Page H2936]]
of them pursue careers that lead to personal and professional success.
The goal of attending a university should and ought not to be gaining
fame and fortune.
The outcome of our work in Congress should not result in crushing
financial debt, because that will end the dreams of college for
otherwise college-ready students.
In 2008, 62 percent of students who graduated with a baccalaureate
degree left college with more than knowledge--they were burdened with
debt. Students of every race, ethnicity, and gender struggle with
loans.
According to 2008 statistics: 92 percent of African-American
students, 85 percent of Hispanic students, 85 percent of Native
American students, 82 percent of multiracial students, 80 percent of
Native Hawaiian and Pacific Island students, 77 percent of white
students, and 68 percent of Asian students received financial aid.
Education is the surest path out of poverty. However, if the changes
proposed by H.R. 1911, that would amend the Higher Education Act of
1965 are allowed to become law, the cost of education will become more
uncertain and much more costly.
The reason, I introduced the College LIFE Act was to deal with the
issue of personal financial education that has to proceed or come as a
requirement when students take on college education debt.
The bill directed that eligible institutions provide financial
literacy counseling to borrowers within 45 days after students receive
their loan.
The focus of the financial literacy education under the College LIFE
Act was to make sure students knew what they were agreeing to in
signing up for and receiving a student loan.
Counseling would provide information on student education financial
options that went beyond loans and included scholarships. Student
financial literacy programs can provide insight into information on
loan management and the basics of personal financial management, such
as how to make a budget, prioritizing income, expenses and personal
spending, as well as how to develop realistic goals based on income.
These students would have also learned about credit and debt
management by understanding the importance of credit scores. Counseling
would make sure that students understood credit cards and investing.
The need for education from cradle to grave should be a national
priority, not an afterthought. We know that the United States is behind
in a wide array of areas related to Science Technology Engineering and
Mathematics known as STEM education. The Republican leadership must
make the national interest for STEM education a top priority.
Students who are graduating across the Nation are departing colleges
and universities this spring with immense debt. Student borrowing is
widespread with more than $100 billion in federal education loans
distributed every year. In total student loan debt adds up to $1
trillion dollars. As a direct consequence of a weak economy more than
ever, students and parents must rely upon loans to pay for higher
education.
The only reliable way in today's economy to earn more is to learn
more. During difficult economic times adults seek new careers by going
back to school. Parents who want a better life for their children will
take on college loan debt because the cost of education requires it.
This is a bad bill that will not solve the problem of out-of-control
student loan debt. For the reasons stated, I urge my Colleagues to join
me in voting no on this bill.
Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, I rise today in
opposition to H.R. 1911, the Smarter Solutions for Students Act. I was
displeased that the House Committee on Rules decided late last night to
consider this bill under a closed rule and would not consider any
amendments submitted to H.R. 1911. My amendment would have extended Pay
As You Earn in order to give past borrowers the same benefits afforded
to new borrowers.
Pay As You Earn, created under the Health Care and Education
Reconciliation Act of 2010, reduces the monthly payment under Income
Based Repayment, IBR, by a third, from 15 percent of discretionary
income to 10 percent of discretionary income, and accelerates the loan
forgiveness from 25 years to 20 years. However, it is only effective
for new borrowers of new loans on or after July 1, 2014.
We need to protect students from high interest rates on these loans
so they are not financially paralyzed for simply pursuing an education.
In a global economy, putting a college education within reach for every
American has never been more important. But it's also never been more
expensive. On July 1, the interest rate on subsidized Stafford student
loans will double from 3.4 percent to 6.8 percent if Congress does
nothing, increasing college costs for over 7 million students by $1,000
per student, per loan. Unfortunately, this bill does not adequately
provide the assistance our students need and instead exacerbates the
college debt crisis.
According to estimates by the Congressional Budget Office, interest
rates under H.R. 1911 will be higher than current fixed rates for
millions of borrowers seven of the next ten years. Even more troubling,
H.R. 1911 also includes provisions the will provide $3.4 billion in
debt reduction. It will be a sad day in American history if should the
Congress decide to further burden struggling students to reduce a
national debt they will already be paying for throughout the course of
their lives.
In Texas and all across the country, students and recent college
graduates are now facing the highest unemployment rate of any other
group. By 2018, 63 percent of all American job openings will require
some sort of postsecondary education. In order for our country to
remain competitive, we need to make college more affordable and
accessible. Political gimmicks such as H.R. 1911 will only discourage
our Nation's students from pursuing an education.
With the cost of higher education continuing to skyrocket, I simply
cannot support a measure that will increase the financial burden for
millions of students and their families. If Americans fail to address
this issue now, we will default on commitment to a better future for
our children. We owe it to our young people to provide the
opportunities that will allow them to become successful and productive
adults.
Mr. LANGEVIN. Mr. Speaker. I rise today in opposition to H.R. 1911,
the Making College More Expensive Act. This misguided bill would
actually increase the cost of student loans and make it harder for
graduates to escape the crushing burden of college debt.
It is a matter of critical national interest that we ensure our
colleges and universities are turning out a well-educated, highly-
qualified workforce. Unfortunately, the ever-increasing cost of tuition
is creating a permanently indebted generation of graduates who are too
often paying off crippling debt instead of building fulfilling careers
that will increase their financial mobility and our country's economic
competitiveness.
We should be working together to solve this looming crisis.
Regrettably, this partisan measure makes college more expensive by
tying student loan interest rates to the 10-year Treasury note, plus an
additional 2.5 to 4.5 percent, and prevents students from locking in a
fixed rate. Since these rates will reset every year, by the time next
year's freshmen graduate, they will be paying more than double today's
current rate for subsidized Stafford loans. The Congressional Budget
Office estimates this will produce an extra $3.4 billion in federal
revenue, meaning the government will be profiting off the extra debt
students incur. I find this completely unacceptable.
That is why I am a cosponsor of a bill, introduced by Congressman Joe
Courtney, to extend the current rate of 3.4 percent on Stafford loans
for an additional two years. Rather than waging another partisan fight
on a bill that will not pass the Senate and the President is prepared
to veto, we should consider legislation that has a real chance of
becoming law and that will provide real relief to students and their
families. What we have before us today is a bait-and-switch scheme,
promising benefits that cannot be realized for another four years and
that can in no way be guaranteed.
As part of the upcoming reauthorization of the Higher Education Act,
we should take on student loans as part of a comprehensive effort to
address student debt, college affordability and the financial aid
system as a whole. We can take advantage of today's historically low
rates without making empty promises to college students.
Ms. McCOLLUM. Mr. Speaker, I rise today in strong opposition to a bad
bill that increases the cost of financing a higher education and adds
to the burden of debt for students and their parents. Without quick
Congressional action, the interest rate on subsidized Stafford loans
will climb from 3.4 percent to 6.8 percent in July for all new loans.
Students and families struggling to afford increasing college costs are
relying on us to stop this dramatic increase now, and to work in a
bipartisan way to find a long-term solution that will make financing a
college education more affordable. Unfortunately, the Republican bill
being considering today will do the opposite; it will actually make
college more expensive for millions of young people and their families.
Chairman Kline and House Republicans are bringing a bill to the House
floor that creates greater uncertainty for students and their parents
by instituting a variable interest rate over the lifetime of loans.
Under this legislation, a college freshman starting school this fall
who takes out a subsidized Stafford loan this fall would have no
guarantee of what their interest rate would be at graduation! Tying
Stafford and Parent PLUS loans to a market-based rate might sound good
now, when market rates are low, but that could quickly change. In fact,
according to projections from the Congressional Budget Office, CBO, in
four short
[[Page H2937]]
years the Republican plan would have students paying an interest rate
of 7.4 percent on the Stafford loans they take out this fall. Students
graduating from college in 2017 would be worse off under this bill than
if we did nothing at all!
Too many students and college graduates across this nation are
already struggling with a crushing amount of student loan debt.
Congress should not pass a bill that would burden them with $3.7
billion of additional debt, as this Republican bill will do. What
college students and their families really need is a comprehensive
approach that makes college more affordable. The Democratic proposal
freezes rates in the short term so that Congress can incorporate a
long-term solution to student loan rates into the upcoming Higher
Education Act's reauthorization. Democrats are asking Republicans to
work with us to reduce the cost of higher education instead of shutting
my colleagues on the Education and Workforce Committee out of policy
discussions and bringing partisan proposals like this one to the floor.
Mr. BLUMENAUER. Mr. Speaker, May is college decision time for high
school seniors across the country. The excitement and joy of this
decision is, increasingly, tempered by concerns about just how they are
going to pay for this education. The cost of college has gone up 150
percent since 1995. In July, federal subsidized undergraduate student
loan rates are set to double from 3.4 percent to 6.8 percent, following
the expiration of a one-year extension of lower rates. I support action
to create a permanent fix to hold down student loan rates.
H.R. 1911 would require that student loan interest rates change year-
to-year based on the 10-year Treasury note rate. In effect, over
today's rates, H.R. 1911 would increase student loans by 2.5 percent to
4.5 percent, depending on the type of loan. Because interest rates on
Federal student loans will be reset every year, under the Republican
plan, next year's freshmen would face an interest rate on loans taken
out freshman year of 7.4 percent, more than double today's current 3.4
percent rate for subsidized Stafford loans. Those borrowing the maximum
amount would pay approximately $2,000 more in interest payments under
this plan during the life of those loans.
This is unacceptable in a time of rising tuition costs and growing
student debt. Not only does it burden our students and bar some of them
from pursuing higher education, it also burdens our economy and limits
economic opportunity.
Instead, I support H.R. 1595, the Student Loan Relief Act, which
extends the current lower rate. I also support H.R. 1979, the Bank on
Students Loan Fairness Act. This legislation, championed by Elizabeth
Warren in the Senate, would allow students to take out federal student
loans at the same low interest rate offered to large financial
institutions. The low rate enjoyed by big banks, currently about 0.75
percent, would make college more affordable for more students.
Interest costs on student loans, however, are only part of the
problem. A college education is easily one of the best investments an
individual can make and as a nation, educating our young people is the
best investment we can make in the future of our economy. Yet, college
has become so expensive in the United States that it is far out of
reach for too many students and those who do attend often find
themselves saddled in a heavy debt load for years to come.
We must work to make education more accessible and affordable to all
of our nation's students. H.R. 1911 runs counter to this goal and for
that reason I do not support it.
Mrs. CHRISTENSEN. Mr. Speaker, today, the House will consider yet
another bill that will make secondary education even more expensive for
students. I strongly oppose this legislation that would serve to deepen
the student debt, and burden student borrowers with crushing debt, when
we have the ability to find a temporary solution, creating the time to
find a better solution that would allow student borrowers to thrive.
Pursuing higher education is becomingly increasingly essential to
securing gainful and fruitful employment in the United States. Most
students and their families cannot afford to pay for college outright
and as such, rely on financial assistance from the government. This
bill would offer these students the help they are seeking, only to
later force them to accept sky-rocketing interest rates. It is
projected that student borrowers entering school this fall would be
subject to a 7.4 percent interest rate by the time they graduate in
2017. This is more than double the current interest rate of 3.4
percent. Approximately 81 percent of African-American students and 67
percent of Latino students find themselves graduating with both a
bachelor's degree and a staggering student loan debt. This is in
comparison to the 64 percent of white students who also graduate with
student debt.
Students should be focusing on their studies and pursuing their
dreams, not about whether or not they can afford to attend the next
semester, or how they will be able to repay the tens of thousands of
dollars of student debt awaiting them after graduation. Not only would
the passage of the ``Smarter Solutions for Students Act'' create a
crushing debt for those students and their families seeking to further
their education, it would also create long-term negative effects on our
already bruised economy. Student borrowers who are subject to the
proposed variable interest rates would have little choice but to delay
homeownership and starting families. Furthermore, subjecting students
to such a drastic increase in, and variability of student loan interest
rates would prohibit many students from returning to, and revitalizing
their rural communities which are in need.
The ``Smarter Solutions for Students Act'' is entirely nonsensical.
Student borrowers are being exploited, and turned into profit
generators for the government. Over the last five fiscal years, the
department of education has collected approximately $101.8 billion
dollars in profits from student borrowers.
I urge the Republicans to find a short term solution to this issue
and freeze the current interest rates, so that the House can work on a
long term solution. We must make college more affordable for those
students who wish to attend. Currently, the student loan debt is at $1
trillion. To allow the student loan interest rate to increase on July
first would only serve to exacerbate this debt, and pile on billions of
dollars to loan debt.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 232, the previous question is ordered on
the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit
Ms. SINEMA. Mr. Speaker, I have a motion to recommit at the desk.
The SPEAKER pro tempore. Is the gentlewoman opposed to the bill?
Ms. SINEMA. I am.
Mr. KLINE. Mr. Speaker, I reserve a point of order.
The SPEAKER pro tempore. A point of order is reserved.
The Clerk will report the motion to recommit.
The Clerk read as follows:
Ms. SINEMA moves to recommit the bill H.R. 1911 to the
Committee on Education and the Workforce with instructions to
report the same back to the House forthwith, with the
following amendment:
Redesignate section 3 as section 4.
Insert after section 2, the following new section:
SEC. 3. PROTECTING STUDENTS FROM TEASER INTEREST RATES THAT
LEAD TO HIGHER LONG-TERM COSTS.
Nothing in this Act shall be construed to--
(1) authorize a student or parent borrower to be charged a
teaser interest rate that entices the borrower with an
initially low-interest rate that subsequently skyrockets,
dramatically increasing the total amount of interest due on a
Federal student loan for the student;
(2) authorize an increase in the total cost of
postsecondary education for students;
(3) authorize false advertising that hides the true cost of
any Federal student loan to a student or parent borrower,
including possible interest rate increases from year-to-year,
the total amount of interest that a borrower may owe on such
loan, and the number of years that a borrower may take to
repay such loan; or
(4) limit the authority of the Secretary of Education to
include in any disclosure related to interest rates that the
Secretary is required to provide to a borrower for a loan
made under part D of the Higher Education Act of 1965 (20
U.S.C. 1087a) at or prior to the disbursement of such loan--
(A) an explanation that the applicable rate of interest for
the loan is a variable interest rate and how such variable
rate may affect the borrower's total cost of attending an
institution of higher education; or
(B) estimations of the total amount of interest payments
that a borrower may owe under all possible interest rate
scenarios under this paragraph for each repayment option and
length of repayment that is typical for borrowers under such
Act.
Mr. KLINE (during the reading). Mr. Speaker, I ask unanimous consent
to dispense with the reading.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Minnesota?
There was no objection.
The SPEAKER pro tempore. The gentlewoman from Arizona is recognized
for 5 minutes in support of her motion.
{time} 1200
Ms. SINEMA. Mr. Speaker, this is a final amendment to the bill and
will not kill it or send it back to committee.
I oppose H.R. 1911. While it's bad enough that student loan interest
rates
[[Page H2938]]
are set to double on July 1, this bill actually makes interest loan
rates even worse for our students. By allowing interest rates to rise
dramatically on their loans, this bill steals from students and forces
them to pay for Congress' debt. That's absolutely unacceptable.
The higher interest rates in this bill will force graduates, who are
just beginning to plan their lives, to pay an estimated added $1,200
each year to the government over 5 years. That's in addition to what
they're already expecting to pay. And not only that, the interest rate
is not guaranteed, so they can't even plan for this bad news.
When you buy a car, you know what your interest rate will be for the
life of the loan. Future graduates who are starting a family, looking
for work, and hoping to contribute to our communities should at least
have the same reassurance about their investment in their hard work as
they would have when buying a car.
It is Congress' duty to stop student loan interest rates from
increasing by July 1, and it is outrageous that we would force students
to pay for the debt that Congress has created. Hardworking students
shouldn't have to pay for Congress' mistakes.
Two weeks ago I shared the story of one of my students at Arizona
State University, Ariel Carlos. Ariel and his wife, May, worked their
way through college to pay for school and put food on the table for
their kids. Ariel also took out student loans in order to make it.
Ariel has debt that he and his wife will pay for decades to come.
Students of mine, like Ariel, will make about $30,000 a year when
entering the workforce. They can't afford to pay down Congress' debt in
addition to taking care of their families. When Ariel asks me to tell
Congress not to make matters worse for families like his and then
Congress responds with this so-called solution, we have failed him and
his family.
My motion to recommit would help students. My amendment includes a
truth-in-lending requirement that stops teaser rates. Teaser rates
start low, but then skyrocket without warning and cost thousands of
dollars more for students in the future. This amendment also requires
the government to tell students the true cost of their loans, including
the amount of their interest payments. This amendment allows students
to plan for their future.
Mr. Speaker, I yield to the gentleman from California, Representative
George Miller.
Mr. GEORGE MILLER of California. I want to congratulate the
gentlewoman for offering this motion to recommit. I think she goes
right to the heart of the matter, and that is the uncertainty that is
being presented by the legislation on the floor today.
Other Members tried to deal with this issue of uncertainty. Mr. Heck
from Nevada tried to deal with this uncertainty by providing an
incentive for those students who borrowed money and were able to pay 4
years on steady payments to give them incentive to continue to do that.
Mr. Rice of South Carolina sought to have a lower rate.
This lower rate isn't chiseled in granite. This isn't the market
rate. This is a choice of the Republican Members of the committee to
choose these rates. Mr. Rice thought this time couldn't we have the
lower rate to begin with, but the Rules Committee turned that out. Then
Obama's plan was offered, and they turned that out.
So now we're stuck, and that's why we need this motion to recommit,
to do as the gentlewoman from Arizona has said: to protect the students
from the escalation of their interest rates, to protect the students
from the escalation of the cost of college.
These are families and students. Companies and colleges create
calculators to try to show students what it will cost over 4 years.
This legislation takes all of that uncertainty out for families: how
they set money aside, how they save money, how they borrow money. Those
calculators don't work with this variable rate, and this variable rate
can go on and on and on and on. That's the problem here.
This is a big choice for most families. I appreciate for some
families that it's not a big deal as they've got enough money. From
where I live, my family, people around me, my neighbors, this is a big
choice and commitment to finance the education of your children. That's
why this motion to recommit from the gentlewoman from Arizona is so
important. There should be truth in lending for America's students,
truth in lending for America's families, and we should get rid of the
rates that will just punish them and crush them into the future as they
graduate from college and they seek to participate in the American
economy and in a career of their choice with the talents that we need
as a Nation.
I want to thank the gentlewoman so very much.
Ms. SINEMA. I yield back the balance of my time.
The SPEAKER pro tempore. Does the gentleman from Minnesota wish to
still maintain his point of order?
Mr. KLINE. Mr. Speaker, I withdraw my point of order, and I rise in
opposition to the motion.
The SPEAKER pro tempore. The point of order is withdrawn, and the
gentleman from Minnesota is recognized for 5 minutes.
Mr. KLINE. Mr. Speaker, we're trying to get to a long-term solution
on how student loan interest rates are set. I believe the process for
that is to pass the underlying legislation here, talk to our Senate
colleagues, get them to act so that we can come together and come to a
long-term solution.
The gentlelady's motion puts Washington squarely back in the middle
of setting student loan interest rates. It's the wrong thing to do. I
urge my colleagues to vote ``no'' on the motion and vote ``yes'' on the
underlying bill.
With that, I yield back the balance of my time.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Ms. SINEMA. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule
XX, this 15-minute vote on the motion to recommit will be followed by
5-minute votes on passage of the bill, if ordered, and approval of the
Journal, if ordered.
The vote was taken by electronic device, and there were--yeas 194,
nays 223, not voting 16, as follows:
[Roll No. 182]
YEAS--194
Andrews
Barber
Barrow (GA)
Beatty
Becerra
Bera (CA)
Bishop (GA)
Bishop (NY)
Blumenauer
Bonamici
Brady (PA)
Braley (IA)
Brown (FL)
Brownley (CA)
Bustos
Butterfield
Capps
Capuano
Cardenas
Carney
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu
Cicilline
Clarke
Clay
Cleaver
Cohen
Connolly
Conyers
Cooper
Costa
Courtney
Crowley
Cuellar
Cummings
Davis (CA)
Davis, Danny
DeFazio
DeGette
Delaney
DeLauro
DelBene
Deutch
Dingell
Doggett
Doyle
Duckworth
Edwards
Ellison
Engel
Enyart
Eshoo
Esty
Farr
Fattah
Foster
Frankel (FL)
Fudge
Gabbard
Gallego
Garcia
Grayson
Green, Al
Green, Gene
Grijalva
Gutierrez
Hahn
Hanabusa
Hastings (FL)
Heck (WA)
Higgins
Himes
Hinojosa
Holt
Honda
Horsford
Hoyer
Huffman
Israel
Jackson Lee
Jeffries
Johnson (GA)
Johnson, E. B.
Kaptur
Keating
Kelly (IL)
Kennedy
Kildee
Kilmer
Kind
Kirkpatrick
Kuster
Langevin
Larsen (WA)
Larson (CT)
Lee (CA)
Levin
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Lynch
Maloney, Carolyn
Maloney, Sean
Matheson
Matsui
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McNerney
Meeks
Meng
Michaud
Miller, George
Moore
Moran
Murphy (FL)
Nadler
Napolitano
Neal
Negrete McLeod
Nolan
O'Rourke
Owens
Pallone
Pascrell
Pastor (AZ)
Payne
Pelosi
Perlmutter
Peters (CA)
Peters (MI)
Peterson
Pingree (ME)
Pocan
Polis
Price (NC)
Quigley
Rahall
Rangel
Richmond
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan (OH)
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schneider
Schrader
Schwartz
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shea-Porter
Sherman
Sinema
Sires
Slaughter
Smith (WA)
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Tierney
Titus
Tonko
Tsongas
Van Hollen
Vargas
Veasey
Vela
Velazquez
Visclosky
Walz
[[Page H2939]]
Wasserman Schultz
Waters
Watt
Waxman
Welch
Wilson (FL)
Yarmuth
NAYS--223
Aderholt
Alexander
Amash
Amodei
Bachmann
Bachus
Barletta
Barr
Barton
Benishek
Bentivolio
Bilirakis
Bishop (UT)
Black
Blackburn
Boustany
Brady (TX)
Bridenstine
Brooks (AL)
Brooks (IN)
Broun (GA)
Buchanan
Bucshon
Burgess
Calvert
Camp
Campbell
Cantor
Capito
Carter
Cassidy
Chabot
Chaffetz
Coble
Coffman
Collins (GA)
Collins (NY)
Conaway
Cook
Cotton
Cramer
Crawford
Crenshaw
Culberson
Daines
Davis, Rodney
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Duffy
Duncan (SC)
Duncan (TN)
Ellmers
Farenthold
Fincher
Fitzpatrick
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Gardner
Garrett
Gerlach
Gibbs
Gingrey (GA)
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (MO)
Griffin (AR)
Griffith (VA)
Grimm
Guthrie
Hall
Hanna
Harper
Harris
Hartzler
Hastings (WA)
Heck (NV)
Hensarling
Holding
Hudson
Huelskamp
Huizenga (MI)
Hultgren
Hunter
Hurt
Issa
Jenkins
Johnson (OH)
Johnson, Sam
Jones
Jordan
Joyce
Kelly (PA)
King (IA)
King (NY)
Kingston
Kinzinger (IL)
Kline
Labrador
LaMalfa
Lamborn
Lance
Lankford
Latham
Latta
LoBiondo
Long
Lucas
Luetkemeyer
Lummis
Maffei
Marchant
Marino
Massie
McCarthy (CA)
McCaul
McClintock
McHenry
McKeon
McKinley
McMorris Rodgers
Meadows
Meehan
Messer
Mica
Miller (FL)
Miller (MI)
Mullin
Mulvaney
Murphy (PA)
Neugebauer
Noem
Nugent
Nunes
Nunnelee
Olson
Palazzo
Paulsen
Pearce
Perry
Petri
Pittenger
Pitts
Poe (TX)
Pompeo
Posey
Price (GA)
Radel
Reed
Reichert
Renacci
Ribble
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Rokita
Rooney
Ros-Lehtinen
Roskam
Ross
Rothfus
Royce
Runyan
Ryan (WI)
Salmon
Sanford
Scalise
Schock
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Smith (NE)
Smith (NJ)
Smith (TX)
Southerland
Stewart
Stockman
Stutzman
Terry
Thompson (PA)
Thornberry
Tiberi
Tipton
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walorski
Weber (TX)
Webster (FL)
Wenstrup
Whitfield
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Yoho
Young (FL)
Young (IN)
NOT VOTING--16
Bass
Bonner
Clyburn
Cole
Garamendi
Gibson
Gohmert
Herrera Beutler
Lewis
Markey
Miller, Gary
Speier
Stivers
Westmoreland
Wolf
Young (AK)
{time} 1230
Messrs. BARLETTA, ROONEY, GRIFFITH of Virginia, COOK, and RYAN of
Wisconsin changed their vote from ``yea'' to ``nay.''
Messrs. CARNEY, VISCLOSKY, and COHEN, Ms. TITUS, and Mr. KIND changed
their vote from ``nay'' to ``yea.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. GEORGE MILLER of California. Mr. Speaker, I demand a recorded
vote.
A recorded vote was ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 221,
noes 198, not voting 15, as follows:
[Roll No. 183]
AYES--221
Aderholt
Alexander
Amash
Amodei
Bachmann
Bachus
Barletta
Barr
Barton
Benishek
Bentivolio
Bilirakis
Bishop (UT)
Black
Blackburn
Boehner
Boustany
Brady (TX)
Bridenstine
Brooks (IN)
Broun (GA)
Bucshon
Burgess
Calvert
Camp
Campbell
Cantor
Capito
Carter
Cassidy
Chabot
Chaffetz
Coble
Coffman
Collins (GA)
Collins (NY)
Conaway
Cook
Cramer
Crawford
Crenshaw
Culberson
Daines
Davis, Rodney
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Duffy
Duncan (SC)
Duncan (TN)
Ellmers
Farenthold
Fincher
Fitzpatrick
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Garcia
Gardner
Garrett
Gerlach
Gibbs
Gingrey (GA)
Goodlatte
Gosar
Gowdy
Granger
Graves (MO)
Griffin (AR)
Griffith (VA)
Guthrie
Hall
Hanna
Harper
Harris
Hartzler
Hastings (WA)
Heck (NV)
Hensarling
Holding
Hudson
Huelskamp
Huizenga (MI)
Hultgren
Hunter
Hurt
Issa
Jenkins
Johnson (OH)
Johnson, Sam
Jordan
Joyce
Kelly (PA)
King (IA)
King (NY)
Kingston
Kinzinger (IL)
Kline
Labrador
LaMalfa
Lamborn
Lance
Lankford
Latham
Latta
LoBiondo
Long
Lucas
Luetkemeyer
Lummis
Maffei
Marchant
Marino
Massie
McCarthy (CA)
McCaul
McClintock
McHenry
McKeon
McKinley
McMorris Rodgers
Meadows
Meehan
Messer
Mica
Miller (FL)
Miller (MI)
Mullin
Mulvaney
Murphy (PA)
Neugebauer
Noem
Nugent
Nunes
Nunnelee
Olson
Palazzo
Paulsen
Pearce
Perry
Peters (CA)
Petri
Pittenger
Pitts
Poe (TX)
Polis
Pompeo
Posey
Price (GA)
Radel
Reed
Reichert
Renacci
Ribble
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Rokita
Rooney
Ros-Lehtinen
Roskam
Ross
Rothfus
Royce
Runyan
Ryan (WI)
Salmon
Sanford
Scalise
Schock
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Smith (NE)
Smith (NJ)
Smith (TX)
Southerland
Stewart
Stivers
Stockman
Terry
Thompson (PA)
Thornberry
Tiberi
Tipton
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walorski
Weber (TX)
Webster (FL)
Wenstrup
Whitfield
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Yoho
Young (FL)
Young (IN)
NOES--198
Andrews
Barber
Barrow (GA)
Beatty
Becerra
Bera (CA)
Bishop (GA)
Bishop (NY)
Blumenauer
Bonamici
Brady (PA)
Braley (IA)
Brooks (AL)
Brown (FL)
Brownley (CA)
Buchanan
Bustos
Butterfield
Capps
Capuano
Cardenas
Carney
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu
Cicilline
Clarke
Clay
Cleaver
Cohen
Connolly
Conyers
Cooper
Costa
Cotton
Courtney
Crowley
Cuellar
Cummings
Davis (CA)
Davis, Danny
DeFazio
DeGette
Delaney
DeLauro
DelBene
Deutch
Dingell
Doggett
Doyle
Duckworth
Edwards
Ellison
Engel
Enyart
Eshoo
Esty
Farr
Fattah
Foster
Frankel (FL)
Fudge
Gabbard
Gallego
Gohmert
Graves (GA)
Grayson
Green, Al
Green, Gene
Grijalva
Grimm
Gutierrez
Hahn
Hanabusa
Hastings (FL)
Heck (WA)
Higgins
Himes
Hinojosa
Holt
Honda
Horsford
Hoyer
Huffman
Israel
Jackson Lee
Jeffries
Johnson, E. B.
Jones
Kaptur
Keating
Kelly (IL)
Kennedy
Kildee
Kilmer
Kind
Kirkpatrick
Kuster
Langevin
Larsen (WA)
Larson (CT)
Lee (CA)
Levin
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Lynch
Maloney, Carolyn
Maloney, Sean
Matheson
Matsui
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McNerney
Meeks
Meng
Michaud
Miller, George
Moore
Moran
Murphy (FL)
Nadler
Napolitano
Neal
Negrete McLeod
Nolan
O'Rourke
Owens
Pallone
Pascrell
Pastor (AZ)
Payne
Pelosi
Perlmutter
Peters (MI)
Peterson
Pingree (ME)
Pocan
Price (NC)
Quigley
Rahall
Rangel
Richmond
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan (OH)
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schneider
Schrader
Schwartz
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shea-Porter
Sherman
Sinema
Sires
Slaughter
Smith (WA)
Stutzman
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Tierney
Titus
Tonko
Tsongas
Van Hollen
Vargas
Veasey
Vela
Velazquez
Visclosky
Walz
Wasserman Schultz
Waters
Watt
Waxman
Welch
Wilson (FL)
Yarmuth
NOT VOTING--15
Bass
Bonner
Clyburn
Cole
Garamendi
Gibson
Herrera Beutler
Johnson (GA)
Lewis
Markey
Miller, Gary
Speier
Westmoreland
Wolf
Young (AK)
{time} 1239
Mr. MAFFEI changed his vote from ``no'' to ``aye.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Personal Explanation
Mr. COLE. Mr. Speaker: On rollcall No. 180, (Ordering The Previous
Question on H. Res. 232, a resolution providing for consideration of
H.R. 1911--Smarter Solutions for Students
[[Page H2940]]
Act) had I been present, I would have voted ``yea.''
On rollcall No. 181, (Adoption of H. Res. 232, a resolution providing
for consideration of H.R. 1911--Smarter Solutions for Students Act) had
I been present, I would have voted ``yea.''
On rollcall No. 182, (Member (D-) Motion to recommit H.R. 1911 with
instructions) had I been present, I would have voted ``no.''
On rollcall No. 183, (Passage of H.R. 1911--Smarter Solutions for
Students Act) had I been present, I would have voted ``aye.''
On rollcall No. 184, (Approval of the Journal) had I been present, I
would have voted ``yea.''
personal explanation
Mr. WOLF. Mr. Speaker, today I was unavoidably detained and missed
rollcall vote 182, on consideration of a motion to recommit with
instructions for H.R. 1911, and rollcall vote 183, on passage of H.R.
1911, the Smarter Solutions for Students Act, because of a longstanding
commitment to discuss compassionate approaches to assist the poor and
hungry. Had I been present, I would have voted ``no'' on rollcall 182
and ``aye'' on rollcall 183.
____________________