[Congressional Record Volume 159, Number 97 (Tuesday, July 9, 2013)]
[Senate]
[Pages S5543-S5564]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
KEEP STUDENT LOANS AFFORDABLE ACT OF 2013--MOTION TO PROCEED--Continued
The ACTING PRESIDENT pro tempore. The Senator from Rhode Island.
Mr. REED. Madam President, I ask unanimous consent that at the
conclusion of my remarks, the Senator from Utah be recognized.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. REED. I wish to thank the Senator from Utah for graciously
allowing me to proceed.
While the Republicans failed to join us in an effort to avert the
doubling of the interest rate on need-based student loans, there is
still time to act to make things right for students. On July 1, the
interest rate on subsidized Stafford loans doubled from 3.4 percent to
6.8 percent. Instead of allowing us to take up a vote on an extension
of the lower rate, the other side continues to push a so-called long-
term solution that would saddle students with even more debt in the
future.
Students and advocates from across the country have been very clear.
On June 21, they wrote to Senate leadership, and in their words: ``A
bad deal that is permanent for student borrowers is worse than no deal
at all.''
We need time to work together to develop a good deal for students--
one that is comprehensive, one that touches not on just rates but on
incentives to lower the costs of a college education and on ways in
which students can refinance their existing debt and their future
debts. As we all understand, we have reached a point where student debt
has exceeded credit card debt. It is the second largest household
debt--$1 trillion--and it is saddling this generation and future
generations with burdens they well might not be able to discharge.
In the meantime, at this moment, we should take up and pass the Keep
Student Loans Affordable Act which I have offered, along with Senator
Hagan and 41 of our colleagues, to ensure that students with the
greatest financial need do not see the interest rate on their loans
double. Again, at the heart of our student lending program has been a
special concern to allow young men and women with talent from low and
moderate incomes to go to college. That is why we created the
subsidized Stafford loan program. That is what we have to keep our
focus and emphasis on today. Forty-nine organizations representing
students, educators, colleges and universities, and workers from across
the country have asked us to do this. These are the students, the
universities, and the people who have most at stake and they are
telling us, again, that a bad deal is worse than no deal at all.
We should take a step back and remember why we offer student loans in
the first place. When President Lyndon Johnson signed the Higher
Education Act into law in 1965, he said: ``And it is a truism education
is no longer a luxury. Education in this day and age is a necessity.''
His words are truer today than they were in 1965. According to
Georgetown University Center on Education and the Workforce, we will
fall 5 million
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short of the workers with postsecondary credentials we will need by
2020. We already know there is going to be a gap between the workers we
need with advanced degrees and the jobs available by 2020. Nearly two-
thirds of new jobs will require a college degree or similar credential.
So by saddling this generation with additional costs and thereby
inhibiting those who may well have the talent but not the resources to
go to college, we are going to create an even bigger divergence between
the demand for skilled workers and the talent Americans need to develop
to fill those jobs.
President Johnson again referred to the Higher Education Act as a
promise the Nation was making to its young people for generations to
come. The promise was that this Nation was not going to allow financial
barriers to keep willing and able young people from a college
education. But, today, that promise is at risk.
As I have indicated, the job market increasingly demands
postsecondary education simply to achieve middle-class earnings. At the
same time, college is getting more and more expensive. As I said also,
student loan debt is accelerating, second only to mortgage debt for
American households. This is going to have a huge impact on the overall
economy of this country. It is not going to be just individual students
and families struggling. The Federal Reserve of New York and others
have reported that this debt is dragging down our economy especially
for young families as they try to establish themselves.
The primary tools in the Higher Education Act to help students pay
for college are grants, work study, and low-cost loans. The Pell grant,
which I must say we are so proud of because it was authored and
championed by our great Senator Claiborne Pell, is less and less able
to fund a college education. In the 1970s, it covered a large part of
tuition and fees for a year in college. Today, the percentage of costs
it covers is shrinking, even as we try to expand it. As a result, more
and more students have had to rely on loans, and that is why we have
seen this huge explosion of debt.
Today, instead of aiding students with low-cost loans, the Federal
Government, ironically, is reaping profits from these students. We have
to change this.
The Congressional Budget Office estimates that between now and 2023,
student loans will generate $184 billion in revenue for the Federal
Government. At a time when students are struggling and when they are
seeing their debt explode, we are making money off of them--not
investing in them but putting them under a huge financial burden.
As we seek to solve these complex problems, I think the most sensible
and the wisest thing to do is to keep the subsidized loan rate at 3.4
percent and use the year to engage and successfully complete the
complex task of looking at several different aspects of this problem.
However, we are blocked from doing so because our budget rules
basically require us to replace the revenue and the other side has been
unwilling to consider revenue from other sources. We propose to offset
the cost by closing a tax loophole. We have to look carefully not only
at what we will do to make the student loan programs cheaper and more
effective for students but also how we will pay for it.
We also have to recognize that for many years our colleagues on the
other side of the aisle have targeted some of these subsidized loans,
wanting to make them more expensive. From the Contract With America in
the 1990s to the Ryan budgets, they have suggested things such as, for
example, eliminating the in-school interest subsidy on student loans.
For subsidized student loans, we pay the interest while the student is
in college pursuing their educational goals, and they have suggested
eliminating that. These are some of the reasons why I think we have to
be skeptical of proposals that are being advanced in order to provide
relief for students.
The so-called Bipartisan Student Loan Certainty Act would add nearly
$1 billion in additional revenues from student loans to the government
coffers. It may be a short-term fix, but it creates a much larger long-
term problem: The teaser rates in the first few years mask the uncapped
rates students would face in the following decades.
This chart is very revealing. This demonstrates the undergraduate
Stafford loan interest rates under the so-called Bipartisan Student
Loan Certainty Act. This green line is the graduate Stafford loan, and
this is the PLUS loan for parents. As we can see, they accelerate
dramatically because of the 10-year Treasury bill rate chosen by
supporters of the other proposal and because of the likely increase in
that rate. It reaches the point here where interest rates exceed
current law in 2016. So by 2016, these loans will be much more
expensive. This is a classic case of enjoying 2 or 3 years of low
interest, but having to be prepared to pay a lot more for education in
the future. It is eerily reminiscent of those proposals to refinance
one's house with an adjustable rate uncapped mortgage and get rid of
that old-fashioned fixed rate which was so prevalent in the first
decade of the 2000s and which caused so much havoc, and still is
causing so much havoc.
CBO estimates that if we look from 2017 to 2023 alone, students will
pay $37.8 billion more under the so-called Bipartisan Student Loan
Certainty Act.
Students are smart. They can figure it out. But I think there is
something else we have to add to the mix. This chart shows an estimate
of the rates that was made a few weeks ago on the previous chart. Here
is the change in the daily yield for the 10-year T-note. This is the
benchmark rate. We can see where it begins on May 1 of 2013. It is
going from about 1.6 percent all the way up to about 2.6 percent. This
rate is rising dramatically. Why? Well, for one reason, the Federal
Reserve has indicated they are going to begin to taper off their
quantitative easing program. One reason is as we see signs of growth in
the economy, interest rates will rise naturally. So what we could find
is that this chart actually underestimates the potential growth in
interest rates and students could end up paying maybe much more.
In the Republican proposal, there is no cap on these rates.
They talk about the fact that there is a consolidation process, but
that consolidation process can only be entered into after a student has
gone through school, begun repayment, accumulated interest at
increasing rates each year, and then, indeed, when a student goes into
the consolidation phase, all of the interest is capitalized and the
loan is stretched out over many years, meaning they end up paying more.
So it is not a rate cap at all. Frankly, without a rate cap, I think we
are exposing students and their families to vast uncertainty. In fact,
the only thing that seems to be certain is these rates are going up.
We have to approach this problem in a thoughtful way. That is why I
introduced the Responsible Student Loan Solutions Act with Senator
Durbin. It is a long-term proposal. It would base student loan interest
rates on the actual cost of running the student loan programs--not on
arbitrary rate but the actual cost to the government--and it will
protect students by capping interest rates on each of the individual
loan programs. Our proposal would, in effect, pass on the savings to
students that the Federal Government accrues from the low cost of
borrowing relative to other borrowers, our ability to absorb risk
relative to others, and the economies of scale for loan servicing for
students across this country.
Additionally, by increasing in this legislation the loan limits on
subsidized loans, we will allow students of low and moderate income to
receive more help and not require them to borrow unsubsidized loans at
higher interest rates and, as a result, I think, help bring down the
whole cascading issue of student debt.
Finally, our legislation would provide relief to students with
outstanding loans--that is upwards of $1 trillion nationally--by
allowing them to refinance to a lower interest rate.
These are some of the key elements for a true long-term solution.
We also need to address the cost of college, which is going up
astronomically. The institutions have to have a lot more at stake. They
have to be very careful that they are not only selecting well-qualified
students, but also that they are preparing them for the workforce of
this century and that they can
[[Page S5545]]
have certainty, and the students can have certainty, that the skills
they master in college will be rewarded with a job in our economy.
Finally, we have to establish a true Federal-State partnership.
Federal grants and loans can't keep pace with these rising college
costs. We have to work with every level of government to try to address
these issues.
What I would suggest is that we work together. First, we extend the
3.4-percent interest rate, then, consciously, deliberately, and
expeditiously, I hope, move forward to fix these complex issues,
protect our students, allow education to be once again the engine that
moves the country ahead, and allow every American, regardless of their
wealth, to get aboard that train and go forward.
Madam President, I ask unanimous consent that Senators be permitted
to speak for up to 10 minutes each and that Senator Hatch be permitted
to speak for up to 15 minutes.
The ACTING PRESIDENT pro tempore. Is there objection?
Without objection, it is so ordered.
The Senator from Utah is recognized.
Mr. HATCH. I thank the Chair.
(The remarks of Senator Hatch pertaining to the introduction of S.
1270 are printed in today's Record under ``Statements on Introduced
Bills and Joint Resolutions.'')
The PRESIDING OFFICER. The Senator from Iowa.
Mr. HARKIN. Madam President, I take the floor today to follow up on
what my good friend and colleague Senator Reed from Rhode Island just
spoke about; that is, the looming interest rate hike on student loans
that is confronting us in this country.
To recap a little bit, in 2002 the Congress passed a fixed rate. We
had variable rates before, but it passed a fixed rate on student loans
of 6.8 percent. In 2007 it was lowered. That lasted for about 5 years,
and then it was going to go back up to the fixed rate of 6.8 percent
last year. The Congress passed a 1-year extension of that at 3.4
percent. It is that 1-year extension which expired on July 1 of this
year. So if the Congress does nothing, the interest rates go back up to
6.8 percent.
In the midst of all of this, a lot of ideas have been floating around
about what to do on student loans and the interest rates. Well, I think
we have to keep in mind that if we go from 3.4 percent to 6.8 percent,
that is a doubling. More than 7.2 million college students will be
required to pay an average of $1,000 more in interest per loan if we
let it go back to 6.8 percent. Again, that is real money for our
Nation's students.
Student loan debt currently exceeds $1 trillion. It is second only to
mortgage debt in the United States, and it is higher than credit card
debt. The average student now graduates with more than $26,000 in
student loan debt. So now is really not the time to make them pay even
more.
Now, luckily, we again have a window of time to act before the
doubling causes any real harm. It doubled on July 1, but we had the
Fourth of July week, so if we were to again extend the 3.4 percent for
another year, it would do no harm. It would do no harm to anyone.
That is why I am urging my colleagues to support S. 1238, the Keep
Student Loans Affordable Act of 2013. This responsible, fully paid for
legislation, introduced by Senator Reed of Rhode Island, Senator Hagan,
Senator Franken, myself, and many others, is a viable solution to
keeping student loan rates affordable for our middle-class students and
families struggling to afford college.
I might add that this bill is supported by 49 student, youth,
consumer, civil rights, and educational organizations across the
country. Here is a letter they sent to Leader Reid and Senator
McConnell dated June 28 to support S. 1238. They said:
We applaud this bill, which creates a workable solution to
maintaining current low rates while Congress seeks to
reauthorize the Higher Education Act to reach a comprehensive
solution to the student loan crisis that is good for
students. We expect a vote on S. 1238 on July 10, 2013,
allowing the proposal to take effect in time to protect
incoming and returning students this fall.
That is what is happening tomorrow. Tomorrow we will vote on cloture
on this bill--cloture, so that then we can get an up-or-down vote on
whether we are going to extend the 3.4-percent interest rates until
next July. I will in a moment say why that is so important.
The letter goes on to say:
Many of the other proposals being discussed would result in
even higher costs to students than if interest rates were
simply allowed to double.
That is, to go to 6.8 percent.
The bipartisan Student Loan Certainty Act put forth by
Senators Manchin, Burr, Coburn, Alexander, King and Carper
would drive up borrower costs by $1 billion and tie interest
rates to the market without a cap to protect students. This
proposal would pay down the deficit on the backs of students,
trading national debt for student debt. It is unacceptable to
use student loans as a vehicle for deficit reduction,
especially when the Federal Government is projected to make
$51 billion on student loans just this year.
So that will be the vote tomorrow.
I ask unanimous consent that this letter, along with the list of the
organizations supporting the 1-year extension, be printed at this point
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
June 28, 2013.
Support S. 1238, the Keep Student Loans Affordable Act of
2013.
Senator Harry Reid,
Hart Senate Office Building,
Washington, DC.
Senator Mitch McConnell,
Russell Senate Office Building,
Washington, DC.
Dear Majority Leader Reid and Minority Leader McConnell: We
the undersigned student, youth, consumer, civil rights and
education organizations urge you to support S. 1238, the Keep
Student Loans Affordable Act of 2013, put forth by Senators
Jack Reed (D-RI), Kay Hagan (D-NC) and 36 others, which will
keep interest rates low for millions of students going to
school this fall. If Congress fails to act by July 1,
interest rates on federally subsidized Stafford student loans
will double from 3.4 percent to 6.8 percent, and over 7
million students across the country will see the cost of
college increase by $1,000 per student, per loan.
Considering the enormity of the student debt problem and
the significant number of students and borrowers impacted, it
is clear that we need a comprehensive overhaul of federal
student loan policy. However, with just 3 days left until the
deadline, it is unlikely that Congress can come to an
agreement on comprehensive reform that is better for student
loan borrowers than if the rate doubled to 6.8 percent.
We applaud this bill, which creates a workable solution to
maintain current low rates while Congress seeks to
reauthorize the Higher Education Act and to reach a
comprehensive solution to the student loan crisis that is
good for students. We expect a vote on S. 1238 on July 10,
2013, allowing the proposal to take effect in time to protect
incoming and returning students this fall.
Many of the other proposals being discussed would result in
even higher costs to students than if interest rates were
simply allowed to double. The Bipartisan Student Loan
Certainty Act put forth by Senators Joe Manchin (D-WV),
Richard Burr (R-NC), Tom Coburn (R-OK), Lamar Alexander (R-
TN), Angus King (I-ME), and Tom Carper (D-DE), would drive up
borrower costs by $1 billion and tie interest rates to the
market without a cap to protect students. This proposal would
pay down the deficit on the backs of students, trading
national debt for student debt. It is unacceptable to use
student loans as a vehicle for deficit reduction, especially
when the federal government is projected to make $51 billion
on student loans this year alone.
We continue to advocate for a long-term, comprehensive
solution that ensures affordable rates for students. If
Congress cannot find an acceptable long-term solution before
students are forced to pay even more this fall, it must act
to prevent subsidized Stafford loan rates from doubling.
Sincerely,
All Education Matters; AFL-CIO; Institute for Asian
Pacific American Leadership & Advancement, AFL-CIO;
American Association of University Professors (AAUP);
American Association of University Women (AAUW);
American Federation of State, County, and Municipal
Employees; American Federation of Teachers; Asian
Pacific American Labor Alliance; Center for Responsible
Lending; Council for Opportunity in Education;
Democracy for America; Demos; Department for
Professional Employees, AFL-CIO; Generational Alliance;
Hispanic Association of Colleges and Universities
(HACU); Leadership Conference for Civil and Human
Rights; League of United Latin American Citizens
(LULAC); Minnesota Public Interest Group (MNPIRG);
Minnesota State University Student Association; MoveOn;
National Association of State Student Grant and Aid
Programs (NASSGAP); National Council for LaRaza (NCLR);
National Education Association; National Federation of
Federal Employees.
National Priorities Project; National Urban League; New
Jersey Students
[[Page S5546]]
United; New York Public Interest Research Group
(NYPIRG); Oregon Student Association; Our Time; One
Wisconsin Now; Progress Now; Roosevelt Institute Campus
Network; Sierra Student Coalition; Student Debt Crisis;
The Education Trust; The Institute for College Access &
Success; The University of California Student
Association; UNCF; United Council of UW Students;
United States Public Interest Research Group (USPIRG);
United States Student Association (USSA); USAction;
Vote Mob; Working Families Organization; Rebuild the
Dream; Young Democrats of America; Young Invincibles;
YP4 Action.
Mr. HARKIN. That is really the vote tomorrow. Are we going to keep
3.4 percent or are we going to allow it to double? That is the essence
of the vote tomorrow.
There are a lot of different ideas floating around here about what to
do and how to do this, but in just about every single case, every one
of those bills, if you project out over the next couple of years, will
raise interest rates higher than 6.8 percent. So, again, that is why
extending it for 1 year is so important.
The proper place to address this issue is in the reauthorization of
the Higher Education Act. That expires this year. Our committee will be
having hearings. We have had some already. We are going to have more
this fall. We expect to be able to put together a reauthorization bill
for early next year. This is where it belongs. This is where the
student loan provision belongs--in the Higher Education Act. Here is
why. College affordability is more than just what your loans are
costing you; college affordability also has to do with the tuitions
being charged by colleges. Why are the tuitions what they are? It also
has to do with the lack of transparency from one college to another.
What do courses here cost? What do courses there cost?
What is built into that cost per course hour, for study hour at this
college compared to this other college?
There are a lot of other costs that go into college affordability
other than just the cost of student loans. So to separate out a student
loan and treat it as some kind of a separate entity is to kind of
ignore all of the other things that affect the cost of college
education. That is why it really needs to be part of a comprehensive
solution, including Pell grants. Maybe we want to change some of the
structure of Pell grants. Maybe we want to take a look at exactly what
it is that we as a society want to do in terms of making college more
affordable. What kind of interest rate base do we want? Do we want a
rate based on the 91-day T-bill, which we have had in the past, or, as
others are proposing now, do we want to go to a 10-year T-note rate?
What does that mean? That has never been fully fleshed out. That only
comes out through hearings conducted by the committee. Should it be
based on the 3-month Treasury note? There are all kinds of different
ideas floating around, and no one really knows what is the best
solution.
I pointed out the necessity for a cap on these loans. I think about
my own experience when I started college in 1958 when there wasn't such
a program. But in 1959 and after that we had what was called the
Eisenhower loan program, the National Defense Education Act. I went to
a window at Iowa State University and I borrowed money. I borrowed
money at 2 percent. I recently looked up the interest rate during that
period of time, the 10-year Treasury note at that time, in 1959, 4.43
percent, 4.12 percent, 3.88, 3.95--all the years I was in college. Yet
I borrowed money at 2 percent. So our government, our representatives,
decided it was worth it for America to subsidize the loans I had, not
charging the 10-year Treasury note but actually half of that--almost
half of that. Think about that.
Not only did our society, our government, say: We want to have a
fixed rate of 2 percent no matter what the market rate is, all the time
I was in college--when I was a sophomore, junior, senior--there were no
interest charges. The interest rate clock did not run. Well, then I
went in the military for 5 years. During the 5 years I spent in the
military, there was no interest rate clock. I then got out of the
military and went to law school. I spent 3 years in law school--no
interest rate clock. Then after I got out of law school, I had a 1-year
grace period of no interest rate. So add it up--almost 10 to 12 years
that I had no interest rate charges. Not until after I was out of law
school for 1 year did the interest rate clock start to run. Then I had
to pay back the loans.
That is what our society, our government, our people decided to do
for me and for students of our generation in the late fifties and
sixties and seventies. That is what they decided to do. Now we hear,
well, no, now we have to go to a market rate. We have to go to a
Treasury note of 10 years plus something.
I only talk about this to show the contrast between what our country
was willing to do for students of my generation and what we are trying
to do for students of this generation. We are going to sock them with
higher interest rates. That is why student debt is so high. That is why
it exceeds credit card debt in this country--because we got away from
understanding that subsidized rate was an investment in the future of
our country. It was an investment in getting kids through college and
not putting a mountain of debt on their heads so that when they got
out, they could get married and raise families, start to make money and
buy good consumer items such as cars and homes and all kinds of things
rather than paying back their debts for the next 10 to 20 years. So we
have gotten away from that.
These are the kinds of things we have to kind of think about as we
reauthorize the Higher Education Act. What is it that we are willing to
do to invest in this new generation of students in terms of getting
them an affordable college education?
In moving forward, I appreciate the efforts of others who have come
forward with ideas, but there is still a divide here. Here is the
divide. I think those of us in our caucus, in the Democratic caucus,
have said we have two key principles we want to uphold: Any deal on
interest rates should not reduce the deficit on the backs of students.
We should not trade national debt for student debt. No. 2, we need to
keep in place an interest rate cap--an interest rate cap--as a key
consumer protection to shield students from exorbitant rates in the
future.
I have the highest respect for our President. I served with him here;
he was on our committee. I only wish that perhaps they had talked to us
a little bit before they came out with their proposal, but President
Obama came out with a proposal on student loans. He was the first
President--not Democratic, but the first President, Democrat or
Republican--to propose going from a 91-day T-bill rate to a 10-year
Treasury note. No other President ever suggested doing that.
Secondly, no President since 1958 has advocated removing the cap.
President Obama, in his proposal, proposed removing the cap.
I believe it is safe to say our caucus has said no, we are not going
to do that. We are not going to lift this key consumer protection of
having an interest rate cap. If we are going to go to a 10-year
Treasury note, then what is it that we do? Do we do it as they did for
me where they subsidize it below it? Do we add something onto it, and
how much do we add onto it?
Again, we have, as I said, two key items. Interest rates should not
reduce the deficit on the backs of students, and we need to keep in
place an interest rate cap as a key consumer protection.
I might point out, this has happened before. We had an interest rate
cap in the 1990s when we had a variable rate. The cap was at 8.25
percent. Five times in the 1990s interest rates went above that. The
cap protected students five times.
That is why the bill that has been put up by the Republican side, S.
1241, fails to meet both those principles. Their bill, like the House
GOP bill and S. 1003, is worse for students over the long term than if
we let rates double. S. 1241 would raise nearly $1 trillion by charging
students higher interest rates over 10 years, using net revenue for
deficit reduction. This bill lacks an interest rate cap, an essential
protection for students, as I said, that has been in place since 1958.
According to the CBO projections of the 10-year Treasury note--and
that is what we have to live with, the CBO projections--under the
proposal of S. 1241, which I think Senator Alexander
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and others have put forward, graduate students relying on Stafford and
PLUS loans will see higher interest rates starting in 2016, right here.
I saw a card about this that said under this bill the graduate
student loans would be 5.21 percent. That is true here. Then it goes up
in 2014, 2015, and then in 2016 it goes above the fixed rate of 6.8
percent and keeps going up to 8.6 percent from then on.
Students understand this. They looked at this and said: Well, gee,
here, this is kind of like bait and switch. We get a couple, 3 years
here where they are lower, and from then on everything is higher for
us. We don't want this.
By 2018, on the undergraduate loans, subsidized and unsubsidized
loans, it is at 7.1 percent. It is even more than the 6.8 percent that
is in permanent law.
Again, I repeat, we have always had an interest rate cap. For as long
as we have had student loans, we have had an interest rate cap. Even
when we had a variable interest rate from 1992 to 2006, as I pointed
out, five times we bumped up against that cap, so students were
protected.
I have read in S. 1241 the authors stated there is a cap. Does this
plan have a cap? It says yes.
There is a consolidation cap which we already have in law, by the
way. We already have a consolidation cap in law. They keep it. But a
consolidation cap is not a substitute for an interest rate cap. It is
apples and oranges. One is a repayment mechanism. That is a
consolidation cap. The other is a consumer protection called an
interest rate cap. A consolidation cap is not a real cap.
Look at it this way. Let's say interest rates go to 10 percent, 11
percent, 12 percent. It is not unheard of. We have had that in the
recent past. A student is in college, and that student takes out loans
at 10 percent, 11 percent, or 12 percent when they are a freshman, a
sophomore, junior, or senior. During the time they are in school,
interest is accruing on their loan at 10 percent, 11 percent, or 12
percent. They can't consolidate until after they graduate. Then they
say they can consolidate all of their loans at an interest rate that is
equal to 8.25 percent or the weighted interest rate of their loans,
whichever is lower.
I pointed out that under S. 1241, the Republicans' bill, if you took
out a basic loan under the basic program we have had for 10 years, at
the maximum, under present law, you would pay back about $21,000 in
interest and payments. Under S. 1241 you would pay back $28,000, $7,000
more. Get this--for the same loan under consolidation you pay back
$69,000.
Consolidation--and that is why a lot of students aren't
consolidating, because they know they are going to pay a lot more in
interest charges for a longer period of time. Think about a 15-year
mortgage versus a 30-year mortgage on your house.
Maybe a student would say: OK, I will consolidate. My monthly
payments will be lower, but the total amount I pay back will be three,
four, five times more than what it would be if I don't consolidate.
Consolidation may be useful to some students as a repayment
mechanism, but it is not the same as a cap on interest rates.
The bottom line is that an interest rate cap is the only way to
ensure all borrowers are shielded from exorbitant rates in the future,
and consolidation is simply not a substitute.
Let's take a look at the base rate in S. 1241. That is the 10-year
Treasury note. I asked my staff to take the provisions of the Alexander
bill, S. 1241, and let's go back in time. What would students have been
paying in interest rates? I looked at 1980, 1990, and 2000, every 10
years. Under S. 1241, undergraduate Stafford is 13.31, graduate
Stafford is 14.86, and 15.86 on the PLUS loans. For 1990, undergraduate
Stafford is 10.4, graduate Stafford is 11.9, and PLUS loans are 12.9.
In 2000, undergraduate Stafford is 7.88, graduate Stafford is 9.43, and
PLUS loans are 10.43. All of them are above the 6.8 percent that is
permanent law right now, permanent in every single case because there
is no cap. We have seen in the past 10-year Treasury notes as high as
14 percent.
There is no cap, so you take the 10-year Treasury note plus 1.85
percent or 2 percent, and you can see where students without a cap are
going to be paying a lot more money. The 10-year Treasury note is
already on the rise as the economy gets stronger. We know those
interest rates are going up and that is what CBO tells us. Without a
cap in place, students are highly vulnerable to this.
Again, I want to go back to this chart here. This is why
consolidation is something students need to think about. This is
$41,000 in Stafford loans borrowed over 2 years by a graduate student
enrolling in 2018. Under current law, they would pay back $21,716 in
interest payments. Under S. 1241, they would pay more, $28,607.
But then they say: Well, you can consolidate. If you consolidate, you
are going to pay $69,185. Look at the difference.
As I say, a consolidation cap is just a way to stretch out your
repayments, which means you are going to pay a lot more money over
time. I am not certain that is what we wish to do to students over the
next 20 to 30 years, burden them with even more debt for over 20 to 30
years.
Again, as I have said before, I think S. 1241 is not good for our
students, it is not good for the middle class, and for America's
competitiveness in the future. I think we ought to take the time to do
it right.
People say: Well, gee, we had an extension of this last year until
this year and you didn't do anything, so we should not extend it again.
There are probably a lot of reasons why Congress didn't do it. Last
year was an election year. We were gone a lot of time in the fall for
people to campaign for reelection for both the House and the Senate,
and it was a Presidential election year. Nothing was done, basically,
from October on.
Then there was the whole deficit reduction measure that had everybody
tied up in knots, and the sequester. We were trying to work that out
the first of the year, and the budget bill, getting that done. There
are a lot of reasons why this was not high on the agenda. There was a
lot of significant legislation going on here, plus, as I said, last
year was an election year and a campaign year.
What is different about next year is this: The Higher Education Act
expires this year. We need to reauthorize it. We need to reauthorize it
in a timely fashion.
As I said, this whole issue of student loans is only one part of it.
There are a lot of other parts, such as college accountability. What
are their graduation rates? What is their charge for per-course study
hour? How do they figure that amount of money? What are colleges doing
to keep tuition rates low? What are States doing to support higher
education?
We have had a number of hearings in our committee already on the
increasing cost of college education and what is causing it. There are
a lot of different factors, but the one factor that overrode them all,
the one consistent, overriding factor of why college costs are going
up, Federal costs--why Federal costs of college education are going
up--is because over the last 20 to 30 years States were reducing their
support for higher education.
State legislatures have figured this out. They figured out that if
our State government doesn't put more money into higher education,
students are going to get Pell grants. They will get these loans. The
Federal Government will back them up. What has happened is States have
reduced their support for higher education and shifted it to the
Federal Government.
What should be the States' responsibility in higher education? What
should be our partnership with the States in supporting higher
education? That is, again, an issue for the reauthorization of the
Higher Education Act, and what we are going to do about student loans
in the future is a part of that.
That is why I argued for an extension for 1 year, because we can look
at it in a comprehensive, systemic way as to what we ought to do about
college affordability. This is why I say the best course of action to
follow right now, both for students, for middle-class families, and for
our country, for getting a better higher education bill that addresses
all of this--the best thing to do is a 1-year-more extension.
As Senator Reed said earlier, there is a loophole in the law that
deals with individual retirement accounts. IRAs were meant for
retirement, but now
[[Page S5548]]
there is a loophole in the law that allows millionaires and
billionaires to take IRAs and give them to a younger generation, which
they then take over a period of years--and a lot of times escape paying
taxes for years and maybe even for decades. Everyone agrees it is a
loophole. It was never intended to be there for IRAs. By closing that
loophole, we can pay for the 1-year extension at 3.4 percent. It seems
to me the students need this loophole in IRAs more economic-wise than
the top one-tenth of 1 percent in our country. So that is why I think
we just need to take a deep breath and quit trying to rush to judgment.
There has been more bad legislation in my 39 years here that has
happened because we wanted to rush to judgment on a deadline rather
than taking the time to go through the committee structure, having the
hearings, working things out on both sides of the aisle through our
committee, and then bringing decent legislation to the floor.
Quite frankly, I think we can point to the immigration bill. That is
what was done there. This immigration bill didn't just pop up on the
floor. It went through a long process in committee, with hearings and
witnesses and debate and amendments.
That is what we need to do here. Don't rush to judgment. I am afraid
if we rush to judgment the losers will be the students and middle-class
families and, quite frankly, our economy in the future if we move to a
system that is going to cause higher and higher interest rates way out
into the future for students just entering college.
So I plead with my colleagues to support the cloture vote tomorrow to
give us this 1-year extension. Let the committee do its work properly
and bring a proper bill to the floor that will be open for amendment.
People will be able to amend it at that time. I believe that is the
deliberate, thoughtful, and the responsible way to address this issue--
not just to vote something out that is separate and apart from
everything else that adds to the burden of student debt in this
country.
So I plead with my colleagues to do the responsible thing and extend
the 3.4 percent for 1 year, and we will address this next year in the
Higher Education Act.
With that, Mr. President, I yield the floor.
The PRESIDING OFFICER (Mr. Manchin). The Senator from Ohio.
Mr. BROWN. Mr. President, I want to echo the words of my colleague
from Iowa about the upcoming vote this week, which is so important. We
know a lot of what has happened with student loan debt, which now
exceeds $1 trillion--that is 1,000 billion dollars. It is more than
credit card debt in this country. It is more than auto loan debt. It is
also second only to mortgage debt of 300 million people of this great
country.
According to the Wall Street Journal, the average student loan debt
for a college graduate who borrowed to finance a bachelor's degree this
year is nearly $30,000.
My wife, who graduated some years ago from Kent State University--the
first of her family to go to college--graduated with just $1,200 in
debt. Her father carried a union card, worked at the local utility
company in Ashtabula. Her mother was a home care worker. They had no
real money to put into her education or the education of her two
younger sisters and younger brother. Yet she graduated with only $1,200
in debt, getting a 4-year degree from Kent State University and going
on to a very good career in journalism.
For students such as the young man named Amish Patel, who works two
jobs to pay tuition at that same university, Kent State, Stafford loans
are important. Stafford loans are essential to helping students such as
Amish achieve their goal of obtaining a college degree.
Just 7 days ago, because of inaction by Congress--as we know so well
from the comments of Senator Harkin and others on the floor--the
Stafford interest rate doubled from 3.4 percent to 6.8 percent.
We have a chance to address this private student loan market today
also. My legislation, introduced not so long ago, helps those 2.9
million students across the country with more than $150 billion in
private student loan debt. Overall, student loan debt is $1 trillion.
Most of that is with the direct lending program--the Stafford loan
program from the Federal Government. But $150 billion, or about 15
percent, which burdens about 2.9 million students, is private student
loan debt. Private loans typically have higher interest rates,
sometimes topping 15, 16, 17, 18 percent. They are more difficult to
refinance, and they offer fewer payment options than those loans
administered by the U.S. Department of Education.
Recent graduates with private loans, such as Lynsay Spratlen of
Macedonia, a community in northeast Ohio, are living with their parents
because their heavier debt burden often means they are unable to buy a
home, to start a business, to buy a car, or to go on to graduate
school. So along with Senator Heitkamp, I am introducing legislation to
help stop the fleecing of college graduates who are stuck under a
mountain of private student loan debt.
Often these banks will not refinance these loans. They are paying
much higher interest rates. Sometimes they are cosigned, other times
they are not cosigned, by a family member, by a parent, typically. But
either way they are a huge burden, and a significantly lower interest
rate would be available if they could refinance these loans.
The legislation authored by Senator Heitkamp and myself--Refinancing
Education Funding to Invest for the Future Act--addresses this problem
by authorizing the Treasury Department to make the private student loan
market more efficient.
I want to read a couple of letters. We come to the floor of the
Senate and talk about statistics, but we don't often enough illustrate
or recite notes and letters and stories and discussions from people we
meet or who write our office or we meet on college campuses or around
our States.
This is a letter from Chad, age 25 from Toledo. He is from the
University of Toledo:
I am currently pursuing a Bachelor's Degree in electrical
engineering at the University of Toledo. I live 15 minutes
away from there so I am a commuter living at home. My parents
don't have the funds to help me pay for college, so in order
to attend I must work full time to cover expenses. The
Federal aid I receive helps me cover a good portion of the
tuition costs. Increasing the interest rate for my loans
would be devastating to me on a financial level. It is hard
enough to pay them at the rate they are now; increasing them
would only make things a lot worse.
They are now at 3.4 percent. He wrote this before it had gone up to
6.8.
Mr. Brown, if there is anything you can do to prevent this
from happening please do so. I am not the only one that will
feel the major effects.
That is why this upcoming vote is so important.
Let me share one other letter from Oregon, OH, also near Toledo. It
is from Mlynek:
I have been a single mother of twin boys since 1989. They
were born October 1, 1986. I co-signed on loans for both of
them so they could further their education in the field they
love ``music.'' Jason Mlynek went to Ball State University
for 2 years and then transferred to Carnegie Mellon
University for his BA and obtained his Master's Degree in
arts management. Jason is working in New York City for
Distinguished Concerts International, but due to the loans he
incurred and the cost of living barely has enough to buy
food. He is paying $1,300 a month on his loans.
Shawn Mlynek received his BA from Carnegie-Mellon and then
went to the University of Miami 1 year and then transferred
back to the University of Cincinnati Music Conservatory and
received his Master's Degree in vocal performance. He works
as a singing waiter and has voice students but is in the same
situation. His income for 2012 was under $20,000, but he is
paying over $900 a month on his loans.
I work full time, have been at the same company 19 years,
make $35,000 a year, have good credit, own by own home . . .
and wanted to refinance. I was told I have too much
outstanding debt due on the loans I cosigned for my children.
Too much debt to ratio so I cannot refinance to lower my
payments.
So not only do these burdensome student loans with interest rates too
high--if they double to 6.8 percent, but with costs already too high--
affect the student when she or he graduates and wants to buy a house or
start a business, but they affect the whole economy, and they also
affect the debt burden of parents, such as this mother--Jason and
Shawn's mother--who couldn't refinance her own mortgage because of the
debt burden she was carrying because she cosigned on student loans for
her sons.
Finally, she writes this:
[[Page S5549]]
The American Way is to help our children and they would not
have been able to accomplish their dream of an education in
the music field if I hadn't cosigned for their educational
loans.
Mr. President, I think that sums it up. These two letters--the one
from the University of Toledo student and from the mother of the
twins--sum up in so many ways why this issue is so important and why
the Senate needs to act, and act quickly, because the interest rates on
student loans doubled last week.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. CORNYN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Nuclear Option
Mr. CORNYN. Mr. President, it seems as if the majority leader and
some others are rattling the cage once again in favor of the so-called
nuclear option. For those who may not follow this topic closely, this
is simply breaking the Senate rules in order to impose majority will on
the minority party by changing the procedures by which the Senate
functions. In other words, it refers to a process by which the rules of
the Senate are broken in order to change the rules themselves.
As the distinguished majority leader has pointed out in the past--
right here on the Senate floor in front of his colleagues and
constituents and all the American people, Senator Reid affirmed that
the proper way to change the Senate rules was through the procedure
laid out in those rules. The majority leader, Senator Reid of Nevada,
went on to say that he would oppose any effort in this Congress or the
next to change the Senate rules other than through the regular order,
and he recommitted himself to this proposition in a colloquy with the
Republican leader earlier this year.
So I would ask the majority leader: Do you plan on keeping your word
or are you going to resort to brute political force and break the
Senate rules in order to change the rules and fundamentally transform
the nature of the U.S. Senate?
Should the majority leader break his promise, I believe he will
inflict lasting and perhaps irreparable damage to this institution. And
during a time when cooperation is very important--as it always is--to
try to actually solve some of the Nation's biggest problems, poisoning
the well by exercising this so-called nuclear option would be the
opposite of what we ought to be doing, which is coming together in a
bipartisan way to address some of the Nation's biggest challenges.
I would also ask my Democratic colleagues, how do you reconcile your
desire for a filibuster-free Senate with the simple fact that Democrats
will not always be in the majority in the Senate? As we know, what goes
around comes around, and the shoe will always be on the other foot. I
can think of a number of legislative proposals that Republicans on this
side of the aisle would happily advance with a simple majority--let's
say, for example, a full repeal of ObamaCare. That would be a good
place to start. As the senior Senator from Tennessee Mr. Alexander
recently pointed out, we could finally establish the Yucca Mountain
nuclear waste facility in Nevada. But the truth is that prudence and a
healthy respect for the fleeting nature of power in the Senate, as well
as a healthy respect for the voices represented by the minority in the
Senate, compel a different course of action because, as we know, the
shoe will always be on the other foot at some day in the future.
I think it is worth pausing to examine the source of the majority
leader's renewed interest in the so-called nuclear option. On the heels
of the President's judicial nominations, many of our friends across the
aisle are renewing their wayward cries of Republican obstructionism in
the Senate, but the facts simply don't bear this out. The facts do not
support this conclusion.
Indeed, as the Washington Post Fact Checker recently pointed out,
from nomination to confirmation, President Obama's district court
nominees have moved through the Senate at only a marginally slower pace
than his predecessors, while his appeals court nominees have sailed
through at a much faster clip than President Bush's. The Senate has
confirmed 28 of the President's judicial nominees so far this year. By
this point in President Bush's second term, this body had confirmed
only 10. Twenty-eight under President Obama and 10 under President Bush
at this point in their second term. In total, 199 of President Obama's
judicial nominees have been confirmed and only 2 have been defeated.
That doesn't sound like obstructionism to me.
Meanwhile, the President has failed to produce nominees for 65
percent of the vacant judicial seats, many of which are in my home
State in Texas. As the distinguished Presiding Officer knows and as the
American people know, it is the President who nominates Federal judges,
and then it is the responsibility of the Senate to advise and consent
on those confirmations. That is in the Constitution. But if the
President doesn't nominate people for these vacancies, then the
Senate's role is never engaged on those 65 percent of vacant judicial
seats where the President has not even nominated an individual to
serve. I would argue that is the true reason for the majority of
vacancies and one that calls for the President's immediate attention.
So I hope that during the remaining few weeks here in July before the
August recess, we don't see a manufactured crisis over how the Senate
operates on nominees. We have some very controversial nominees--for
example, three of whom were unconstitutionally recess-appointed by the
President. And don't take my word for it. In the case of the National
Labor Relations Board, the court of appeals held that those were
unconstitutionally appointed in order to circumvent the Senate's
constitutional role.
It is true that the U.S. Supreme Court has taken those cases, and we
will soon hear--perhaps by next summer--what the Supreme Court's view
of the recess appointment authority of a President might be. But we
know that at least three of them--two at the National Labor Relations
Board and the so-called Consumer Financial Protection Bureau nominee--
were recess-appointed and, I think it is pretty clear, in violation of
at least the court of appeals' view of what the President's
constitutional authority would and should be.
We also have other nominees, some of whom are more controversial than
others. We have Gina McCarthy, who has been nominated for the
Environmental Protection Agency. We have James Comey, who was this
morning before the Senate Judiciary Committee and who I believe will
enjoy broad bipartisan support as the next FBI Director. We have other
more controversial nominees, such as Thomas Perez to the Department of
Labor. That is in part due to his activities as head of the Civil
Rights Division of the Justice Department, where he was harshly
criticized by the inspector general for politicizing what should be a
nonpolitical position, enforcing the civil rights laws of the United
States.
So we are going to have plenty to talk about and a lot to do, but
this should not be used as an excuse by the majority leader to break
his word when it comes to changing the Senate rules through this
nuclear option process. That would be a disservice to the country. It
would certainly irreparably damage the Senate as a deliberative body.
It would poison the well when we need to work together as much as we
can to try to get other important work done. And it would be extremely
shortsighted because majorities can be fleeting, and those who are in
the majority today will find themselves in the minority in the future.
I think that recognition would caution prudence and temper the
political ambitions of the majority leader when it comes to jamming
through some of these nominees.
Mr. President, I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BLUNT. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BLUNT. Mr. President, I would ask unanimous consent to speak as
if in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
[[Page S5550]]
Affordable Care Act
Mr. BLUNT. Mr. President, I would like to talk about the Affordable
Care Act. I have long been concerned that this is an act that simply
won't work. I think the premise the bill was built around is a premise
that won't work.
I know things like guaranteed insurance sound very popular--that you
can get health insurance no matter what your health condition is--but
the problem with getting insurance after the fact as one of the
potentials is that it discourages getting insurance before the fact.
Getting insurance after you are sick is like getting fire insurance
after your house is on fire. You could probably get fire insurance
after your house is on fire, but it would sure cost a lot more than it
would have cost under what we would see as traditional insurance. So I
have always thought that premise was a problem.
I have always thought the requirements in the bill that depend
heavily on young people who are healthy buying insurance at higher
rates than young people have ever looked at before--and remember, that
is probably the biggest uninsured component in this society because
young and healthy people think they are young and healthy, and the
truth is that they normally are young and healthy, and they don't need
insurance like many members of this body might need insurance because
they just simply don't and they know it.
Frankly, now that the least likely to be healthy among us can't pay
more than three times the most healthy--we have never had that
requirement before--doesn't mean the cost of insurance goes down for
unhealthy people as much as it means it goes up in cost for people who
are healthy. And I think those young healthy people will be smart
enough to figure out that it is probably not in their best interests,
either their health or their finances, to buy the insurance they don't
need rather than to have the ability later to buy insurance if it turns
out they need it. It just never made much sense to me.
Meanwhile, as we see that happening, from insurers to doctors to
employers, people are looking at this law and figuring out if this is a
place where they still want to focus their energies. I met with a
number of doctors this morning who talked about how doctors are selling
their private practices to hospitals and how specialty doctors are not
going into specialty medicine because the cost is too high for the
reward they might get.
I have talked to employer after employer who said: We have done all
we could to provide the insurance we have provided, but we can't meet
these new benefits and still stay in business. And even more employers
have said: We may not let anybody go who is a full-time employee, but
in the future we are going to hire more part-time employees because we
don't have to cover those part-time employees under the law.
Then, as people are leaving health care behind and they are leaving
their obligation to help provide health care behind, they keep getting
different messages from the Federal Government itself. Not too long ago
the supporters of this act--and I have never been one of them, I will
admit that right upfront--but the supporters of this act are saying we
are going to stick with this, we are going to implement it, we are
going to stay fully committed to it. But while we were gone last week,
the administration announced that in fact--they did it on a blog post,
which I suppose is a way to announce something that is as consequential
as this. It certainly got a lot of attention. But the blog posting said
the insurance reporting rules and penalties for employers would be
delayed for another year.
Suddenly, one of the wheels on this bicycle is gone. The employer who
was going to have to provide insurance or pay a penalty now does not
have to do it. But apparently the individuals who are going to have to
buy insurance for themselves, if it is not provided at work, have to.
At the same time the administration announced the income verification
to have taxpayers help pay for a person's insurance would be waived.
Remember, the income verification for any person or family at less than
400 percent of poverty--which is a pretty big number; it is around
$90,000 for a family of 4--you get some taxpayer assistance to pay for
your insurance. But now you do not even have to verify your income to
get that. You can just say here is my income and whatever it is I want
to have the taxpayer insurance based on what I believe my level of
income would be that I am willing to tell you about.
Suddenly the money the Government is spending is going to people who
are getting taxpayer-paid insurance. There is no penalty for people who
do not provide insurance at work as the law requires. So, for a law I
have had problems with all along, I have even more problems with it
now. It is like: Never mind the employer mandate. Never mind the
individual income verification to get taxpayer assistance. How could
you take those two principles out of that law and expect it to be
implemented in a fair way?
The new plan apparently is let the Government sign up as many new
people as they can for government-assisted insurance. I understand why
that might be the most popular aspect of this bill. One of the great
principles of society and people is when somebody is giving you
something you are usually more glad to get it than you are when
somebody is taking something away from you. But in this case you are
taking money away from taxpayers to give to individuals to pay for
their insurance and not fulfilling the rest of the commitments of the
bill.
The administration obviously believes that paying the bill will make
an unpopular piece of legislation more popular. In fact, many of the
administration's advocates are talking about how politically smart it
is to put off the implementation of this bill for employer-based
insurance until after the next election. You can hardly find a story
about this without it talking about how shrewd it is, putting this off
until people have voted one more time before they find out what is in
it.
There were no real rules that came out until after the 2012 election,
and then suddenly after the 2012 election, between then and the end of
the year, there are 20,000 pages of rules, rules that nobody saw before
election day, but suddenly the 20,000 pages of rules, 7\1/2\ feet
high--7\1/2\ feet of rules that will be challenging to comply with but,
more importantly, nobody saw them before the 2012 election--now nobody
has to have a penalty as an employer until after the 2014 election.
I think I am getting to see a pattern develop here and the pattern is
when people find out what is in this law they are not going to like it.
If it was believed they were going to like it, I think we would be
rushing to implement the law before the 2014 election, not after. I
think we would be rushing to have the 20,000 pages of regulations out
before the 2012 election, not after it. They had 3 years to get the
regulations out before the 2012 election, 3 years, but they all come
out after November. Now we are told we do not have time to implement
this. It has been 3\1/2\ years since the bill was signed into law. If
this is ever going to work, how much time is it going to take to
implement it?
This is a determined effort to get further and further down what I
think may be the wrong road before people find out what has happened to
their insurance, before people know what has happened to their doctor,
before people know what has happened to their health care. And when
they find out, I think they are not going to like it.
Since the passage of the bill, the law has had 8 interim final rules,
3 final rules, 20 requests for comment, 21 proposed rules--according to
the Wall Street Journal, 1 information collection request, 2 amendments
to the interim final rules, 6 requests for information, and 1
frequently-asked-questions document.
The administration announced about a year ago that the long-term care
provisions of the bill, the so-called CLASS Act, simply wouldn't work.
I remember when this was before the committee in the House of
Representatives, when it was said: Look, there is no way this can
possibly work. The advocates said no, this is actually going to make
money. But once the bill was signed into law and was out there for
about a year, the Department of Health and Human Services said this
long-term care thing was not going to work; even though it is in the
law, we are not going to implement it.
Then they announced we are not going to have the small business
exchange available in January 2015; it
[[Page S5551]]
will be at least another year for that. The very same week they said we
are not going to have income verification, we are not going to have the
employer mandate, there is another 606 or so pages of new rules and
regulations. The rules and regulations seem to come out, but nobody
seems to want to implement the law. There were 3\1/2\ years to get
ready. Now they can't get ready until after the next election.
If employers should have a delay, so should individuals and so should
families. In fact, I think what we should have is a permanent delay
while we look for a plan that works, that can be implemented, that
makes sense, that is based on good health care and good health care
decisionmaking. I hope this Senate and this Congress and this
administration will try to find a plan that works instead of constantly
saying: You know, we are not ready to make this plan--which has been
out there for 3\1/2\ years now--work and work to meet the needs of the
American people.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. WICKER. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered. ]
syria
Mr. WICKER. Mr. President, last week I led a bicameral delegation
that visited the Syrian border with Turkey. What we witnessed on the
ground highlighted the critical nature of events and the desperate need
for American leadership and eventually a negotiated resolution to the
Syrian civil war.
This civil war is now in its 29th month. More than 100,000 people
have been killed, including at least 36,000 civilians, and 1.7 million
people have been forced from their homes, fleeing for their lives as
the chaos escalates. To describe this conflict as anything less than a
regional disaster is to ignore the magnitude of its impact.
According to the United Nations High Commissioner for Refugees, the
violence has pushed over 400,000 refugees to Turkey, almost 500,000
refugees to Jordan, 160,000 to Iraq, 587,000 to Lebanon, and 88,000
refugees to Egypt--a stunning development. The people of Turkey and
Jordan, including Prime Minister Erdogan and King Abdallah, should be
specifically applauded for their generous support of these refugees.
I also point out there are now secure locations inside Syria where
refugees can be housed within their own country.
There is noted international support to prevent the spillover of
violence. At the request of the Turkish Government and in fulfillment
of our NATO obligations, the U.S. Patriot missile batteries at
Gaziantep are one example of efforts to deter the threat of ballistic
missiles beyond the Syrian border. Additionally, the Dutch and Germans
have deployed batteries to Turkey.
American troops are working diligently to strengthen our regional
security and protect innocent lives in harm's way. Our delegation was
able to meet and visit with troops in Gaziantep last week. These highly
educated and motivated men and women are proudly serving American
interests, and I commend them for their dedication to a critical
mission.
Turkey must have the support it needs to defend its population and
territory from the raging civil war next door. Without robust
cooperation among NATO allies, the stability of this entire region is
at risk.
During our visit to a refugee camp in the town of Killis near the
Syrian-Turkish border, roughly 40 miles from Gaziantep, we saw
firsthand the dire situation facing the countries that have accepted
Syrian refugees and the challenges these individuals now face. At the
refugee camp, our delegation met with a women's group, children in
school, and with the elected camp council. Our conversations were
insightful--and heartbreaking. Over and over, the same question
emerged: Why aren't the Americans helping to bring down Asad? Why are
the nations of the world allowing the slaughter of innocent people to
continue? Is there no outrage over the displacement of more than 1.5
million people from their homes?
Frankly, these questions are very difficult to answer.
So far, the Obama administration has been reluctant to help in
contrast to the aggressive military and humanitarian aid provided by
some of our NATO allies such as Britain, France, and Turkey. I wish to
emphasize: No one is asking for American boots on the ground. No one is
asking President Obama to put troops in Syria. America is
understandably war-weary from Iraq and Afghanistan, but our hesitation
to provide adequate arms to the anti-Asad rebels is hard to justify,
especially when multiple red lines have been crossed.
Those who share President Obama's reluctance to assist opposition
forces point to the uncertainty surrounding those who might assume
control of Syria if the rebels win. They ask: Which faction will
emerge? The more moderate rebels under the Free Syrian Army or a
radical Islamist band of opposition rebels?
While caution is definitely called for in this dangerous and volatile
situation, our reluctance to act reminds me of Shakespeare's Hamlet who
once observed that men ``rather bear those ills we have, than fly to
others that we know not of.''
I would remind Members--and the administration--that Hamlet's hand
wringing and indecision ultimately led to his demise. In bowing to a
fear of uncertainty and choosing disengagement, the implication is
essentially that the world is somehow better off with a known
quantity--even a known quantity in the person of Bashar al-Asad. I
disagree.
Here are a few facts about the ``ills'' we know regarding the Syrian
dictator known as Bashar al-Asad:
No. 1, Asad is supported by the extreme Islamist regime in Iran, with
a supply of Iranian Revolutionary Guards to embolden his rampage.
No. 2, his grip on power has been serviced by Syria's client-state
relationship with Russia, which continues to defend its military aid to
him. President Vladimir Putin refused to join other nations at last
month's G8 Summit in explicitly calling for an end to the Asad regime.
No. 3, Asad has tolerated--if not overseen--the killing of at least
36,000 civilians in his own country, and this is according to numbers
from the Syrian Observatory for Human Rights. More than 3,000 of these
have been women and more than 5,000 were under the age of 16.
No. 4, under Bashar al-Asad's rule, the number of refugees has topped
1.7 million, with thousands more seeking safety every day.
No. 5, Bashar al-Asad has targeted the villages of his enemies in a
merciless attempt to eradicate any who oppose him.
No. 6, following in his father's ruthless footsteps, he has shown
that he is willing to use every tool at his disposal to hang on to
power, and that includes the use of chemical weapons, a development
President Obama once called a red line, as well as rocket attacks on
his own people.
No. 7, we have every reason to conclude that Bashar al-Asad is a
calculating strategist and student of history who has learned from what
he views as the mistakes of Iraq's Saddam Hussein or Libya's Muammar
Qadhafi.
With Russian and Iranian assistance and arms, Asad has succeeded in
stopping the momentum of the rebels. But with sufficient military
support, the pendulum can, in fact, swing back toward the rebels.
I strongly disagree with those who suggest that the opposition rebels
could somehow turn out to be worse than the nightmare that has
unfolded.
Increasing America's assistance to Syrian rebels, short of boots on
the ground, must be decisive and strategic in order to be effective.
That does not mean we send arms freely to all rebels. I challenge the
notion that in sending military aid, we forfeit the authority to choose
which rebel leaders to support. I would also point out to Members that
both the Chairman of the Joint Chiefs of Staff, Martin Dempsey, and
former Defense Secretary Leon Panetta have testified before the Senate
Armed Services Committee that within the administration, they argued in
favor of arming the rebels.
General Salim Idris, chief of staff of the U.S.-backed Supreme
Military Council, has emerged as anything but a
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radical Islamist in presiding over the armed opposition and serving as
a conduit for military aid. A New York Times profile described him as
``soft-spoken and humble compared with many military men.'' He defected
from the Syrian military after an attack on his village last year--the
same village where he and his eight siblings were raised by a grain
farmer.
In a recent letter to the United Nations Security Council, General
Idris's pleas for the Syrian people were clear and simple: ``Syria
should not be allowed to become the Rwanda of the 21st century.''
As I emphasized when speaking with Syrian refugees at the camp in
Killis, a negotiated settlement will ultimately require reconciliation
by representatives of all factions of the Syrian society--Alawites,
Sunni, Shia, and Christians. They must be prepared to negotiate with
and eventually forgive their fellow Syrians who have made war against
them. But I do not believe that can happen as long as Asad and his
Russian and Iranian backers see the momentum going their way. Russia
will never agree to back a meaningful peace negotiation if the Russian
leadership thinks Asad can win outright. A leading-from-behind strategy
will not expedite the overthrow of the Asad regime. There is still an
urgent need for American leadership.
There is no peaceful future for the Syrian people if Asad remains in
power--only one of more violence, oppression, and regional instability.
Should he prevail, the impact could have drastic implications on
America's national security interests, including the prospect of
increased sectarian violence in the region, the rise of al-Qaida-
affiliated groups in Syria, and the expansion of Iran's extremist
influence. The United States must not shy away from our potential to
make a meaningful difference.
Our Nation led an international coalition to act in Bosnia and
Kosovo, and we did so with success. We did not do so, regrettably, in
Rwanda--a mistake President Clinton has called his greatest regret.
I do not suggest that one visit to a refugee camp is by any means a
comprehensive assessment of U.S. foreign policy in Syria. Military
assistance would be fraught with difficulties, and it produces a host
of conflicting viewpoints among people for whom I have great respect.
But my visit to the refugee camps does have a profound effect, and my
observations of what is happening on the ground certainly bring home
the enormity of human suffering and devastation this conflict has
caused.
Most of those unfairly caught in the crossfire just want to get on
with their lives and protect their families. Instead, they have been
forced from their homes and from their livelihoods--their entire way of
life ripped apart by the bloodshed that no human should endure.
I invite the American press to visit Gaziantep and the refugee camps
nearby. The American people are entitled to know what is happening to
1.7 million people. After more than 100,000 deaths, with so many people
left without a home, we should not stand by as the horrors continue to
mount. The administration's hesitation leaves the fate of Syria's war-
torn people to a regime willing to kill and destroy to stay in power.
In summary, we know too much about Bashar al-Asad to maintain the
status quo. Backed by Russia and Iran, he has overseen the massacre of
innocent lives, boldly crossed red lines, and violently suppressed any
who challenged him. To suggest we cannot do any better--that Asad is
somehow more acceptable than the opposition forces--falls short of
taking an honest, realistic look at what is happening.
The question now is not whether America puts boots on the ground. We
should not and will not do that. The question is whether the
administration will strengthen the capabilities of Asad's adversaries.
The question is whether the administration will trade its reluctance
for resolve and--like that of our NATO allies--respond with robust
military aid. So far, efforts in Geneva have failed to bring about a
consensus among major world powers that outlines a lasting political
transition. Without changing the momentum back to the rebels, the
current situation will not change, and the threat to regional stability
and to American interests will continue.
Thank you, Mr. President. I yield the floor.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. CARDIN. Mr. President, on July 1, interest rates on subsidized
Stafford loans rose from 3.4 percent to 6.8 percent. This means for
students across the country, the annual cost of their student loans
will go up by as much as $1,000 a year. This makes no sense. The cost
to the government is not 6.8 percent. In other words, the government
will be making money on the student loans. That was never our intent,
and that makes absolutely no sense.
I hear many of my colleagues talk about how we do not want to
increase tax burdens on American families. Now we are taking our most
vulnerable--students who need affordable higher education--and telling
them they are going to have to pay more money for their student loans.
And, by the way, the government is going to make money off of that? We
have to do something about that.
Let me talk a little bit about the size of student loans today. Total
student debt passed the $1 trillion mark last year. There is more debt
in student loans than there is in credit cards in America. Sixty
percent of the students must borrow money in order to afford a college
education. Thirty-five percent of America's 35 million students are
behind on their loan payments. This is an enormous problem, and on July
1 it became a more difficult burden for American families because of
the higher interest rates.
Senator Harkin, the chairman of the education committee, is
absolutely correct that we should take up a revision of how we charge
students for loans and the availability of loans and the cost of
education when we take up the Higher Education Act reauthorization.
That committee will be taking it up shortly. But in the meantime, we
should take action to prevent the increase in these student loans from
going forward. That is why I am a cosponsor and urge my colleagues to
support S. 1238, the Keep Student Loans Affordable Act of 2013. That
act is pretty simple. It just says we are going to extend the 3.4
percent for another year. In other words, the government will not make
that money off the backs of our students. I hope all of us would agree
that we need to get that done now so the increased burden, the
increased costs, and the unnecessary costs to students are avoided.
Now, because of our budget scoring rules, S. 1238 needed to be paid
for. It is fully paid for. In other words, because current law would
allow interest rates on subsidized loans to go up to 6.8 percent, to
take it back to 3.4 percent, the budget scorekeepers say we have to pay
the cost of that difference, even though the government would be making
money at the 6.8 percent. So S. 1238 is fully paid for. We take a
provision that the Senate Finance Committee has been looking at, known
as the stretch IRAs that basically deal with inherited individual
retirement accounts, and we require that those funds be taxed in a more
timely way than they are today--a noncontroversial provision. It
provides the money.
I must tell you that I do not necessarily agree that the 3.4-percent
continuation should not be baselined. Why do I say that? I hear so many
of my colleagues say, when we have a tax bill and we extend tax relief,
that if we do not extend that tax relief, that is raising taxes on
individuals. In other words, what they are saying is that the temporary
tax relief is really baselined and that if we do not extend that, we
are increasing taxes. Well, here, for students, the 3.4 percent was the
law. Why now, just extending that, do we all of a sudden have to come
up with a different standard on how we pay for it? That being said, S.
1238 is fully paid for.
What I think is wrong is for us to allow interest rates to go up
where the government is making money off the backs of our students. We
should not be doing that. Higher education is already too expensive. We
should be looking at ways to make college education more affordable for
American families. For generation after generation, we have been
telling our children that the American dream is achievable to those
individuals willing to pursue an education and work hard. Are we now
prepared to tell millions of students that
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we are pushing the American dream beyond their grasp?
Let me give one example. Amanda McIntosh wrote me a letter. She is a
first-generation college student who holds a college degree from
Christopher Newport University, a master's degree from Columbia
University, and a graduate certificate from Johns Hopkins University.
Amanda is not from a wealthy family, so she has over $100,000 in
student loan debt. Amanda would like to earn her doctoral degree so
that she can conduct research that influences policy regarding access
to higher education for historically underrepresented populations, but
she is buried under student loans and unable to continue her education,
unable to afford a car or make a downpayment on a home or otherwise
invest in the economy. She simply cannot afford to take on more loans.
What is the message here? What are we telling the future generations
of Americans? We are saying: You need education in order to succeed.
You need education so we can have a competitive workforce. And then we
tell them that the cost of education is out of their reach. And then we
are going to tell them that the loans are going to be more expensive.
In Amanda's case, she would like to do something with her future that
could be extremely helpful to our country and to herself. She may not
be able to do that because of the cost of higher education. And then so
many students graduate with such large debt today that they have to
look at paying off their debt and it affects their career choice. These
might be gifted scientists who could really do something to help
discover the answer to dread diseases, how we could cure them, but
instead they have to opt out for a short-term career decision to pay
off their student loans.
We need to have a policy that makes higher education more affordable,
not more costly. Yet increasing the cost of the Stafford loans from 3.4
percent to 6.8 percent will make it more expensive for families to be
able to afford a college education.
Obtaining a college degree is not a luxury; it is an economic
imperative. Affordable access to higher education means more
scientists, doctors, nurses, engineers, computer programmers, and other
highly skilled workers our economy will need to fill the high-tech jobs
of the future. A well-educated, highly skilled workforce is vital to
sustain our national security and prosperity in a globalized 21st-
century job market.
So I urge my colleagues to support S. 1238, the Keep Student Loans
Affordable Act of 2013, as a commonsense approach to protecting
students at no additional cost to the taxpayer. As I said earlier, this
bill would simply allow the 3.4 percent to remain in effect until our
committee has the time to pass reauthorization of the Higher Education
Act, and they could then take into consideration not just the
availability and the cost of student loans but the cost of higher
education, the transparency in the cost of higher education, the
concerns we have about different types of schools and whether we are
getting value for the dollar. All that can be done as we reauthorize
the Higher Education Act. But in the meantime we should keep the loan
cost to students at 3.4 percent and not allow it to increase as it did
on July 1. We will have the opportunity to do that, I understand,
tomorrow on the bill on the floor. I would urge my colleagues to
support that effort.
Tribute to Jodi Schwartz
On a personal note, let me point out that a very valuable member of
my staff, Jodi Schwartz, will be leaving us at the end of this week.
She is our education person in my office who has been so helpful to me
not just on the student loan issue but on all educational issues--
affordability of education, the quality of education, the opportunity
for everyone to have the great dream of America. She has been a very
valuable asset to our staff. I will certainly miss her in my Senate
office, and I wish her only the best.
With that, I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. THUNE. I ask unanimous consent that the order for the quorum call
be rescinded.
The PRESIDING OFFICER (Ms. Warren). Without objection, it is so
ordered.
ObamaCare
Mr. THUNE. Last week on July 2, the Tuesday before the Fourth of July
Independence Day on Thursday, the administration made an announcement
that they were going to delay implementation of a key component of the
ObamaCare law. I think that came as a surprise to a lot of people
because the expectation has been all along that in January of this next
year many of the provisions in that law were going to go into effect.
Tomorrow, a majority of the Senate Republican conference will be
sending a letter to President Obama asking for a permanent delay of the
employer mandate. I say permanent delay because they talked about
delaying it for 1 year. In making the announcement about the delay of
the employer mandate, the administration unilaterally acted and failed
to work with Congress on what is a very significant decision.
This action finally acknowledges some of the many burdens this law
will place on job creators. I believe the rest of this law should be
permanently delayed for all Americans in order to avoid significant
economic harm to American families.
In response to questions about the administration's decision, the
President's senior adviser Valerie Jarrett said, ``We are listening,''
while referring to the concerns of the business community over the
onerous employer mandate that will result in fewer jobs and employees
working fewer hours.
We have been listening as well. As more employers have attempted to
understand the burdensome requirements in the President's health care
law, the louder their outrage has become. In particular, small- to
medium-sized businesses are simply drowning, drowning in their efforts
to understand all of the regulations.
We are also listening to the views of the American people. A recent
Gallup poll from this week showed that a majority of Americans still
disapprove of the health care law. The survey showed that 55 percent of
respondents disapprove of ObamaCare. A Gallup survey last month
revealed for every one person who believes they will be better off
under ObamaCare, two believe they will be worse off.
Opposition to the health care law is growing and it will continue to
grow as more Americans realize the law is built upon broken promises
and will result in higher health care costs and more taxes.
Under the individual mandate, the IRS, which is still under multiple
investigations for unfairly targeting conservative groups, will play a
central role in the implementation of the health care law in our
country. Last fall the Congressional Budget Office estimated nearly 6
million Americans, primarily in the middle class, will have to pay a
tax under the individual mandate, which was 2 million more than were
initially estimated.
When the Affordable Care Act is fully implemented, the average
individual mandate tax will be nearly $1,200, which clearly--clearly--
contradicts the President's previous statement that the individual
mandate is ``absolutely not a tax increase.''
Further, families are facing significant increases in premiums. The
Wall Street Journal recently published an analysis of premiums and
concluded under the health care law some Americans will see their
premiums double or even triple, which is the opposite of the promise
that was made by the President that premiums would go down by $2,500
for American families.
Given the widely held belief by the American people the Affordable
Care Act will not fulfill its promises and will result in higher costs
for American families, I believe this law should be permanently
delayed. This law is unworkable, harmful to the economy and to American
families, and action to delay the employer mandate is an acknowledgment
of that very fact.
Public opinion about the Affordable Care Act has been consistently
low. Perhaps Americans don't like it because it is affecting their
jobs. Four in ten small business owners say they have held back in
hiring, and one in five owners says they have let employees go due to
the health care costs associated with the Affordable Care Act. As
implementation of the law continues, the number of small business
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owners who take these steps could increase.
Employers are also cutting back on hours in anticipation of the
mandate. Even though enforcement of the employer mandate may be
delayed, employers still know this is coming down the pike and will
continue to make adjustments to their workforce in anticipation of the
new mandates.
A new mandate will also be imposed on individual Americans. On
January 1, Americans will be forced by their government to buy a
product--health insurance--for the first time ever. This mandate will
be enforced by tax penalties administered through the Internal Revenue
Service. The Obama administration has requested over $400 million in
funding and nearly 2,000 bureaucrats for the IRS to implement the
individual mandate and 46 other statutory provisions.
The blizzard of ObamaCare rules and regulations continues. Regulators
have now written over 20,000 pages of ObamaCare-related rules and
notices in the Federal Register. And just this last week another 606
pages of new regulations were released that were designed to assist in
implementing this massive law. It is no wonder the public outcry from
employers was so loudly opposed to the employer mandate.
American families are also struggling to understand how this complex,
burdensome law will affect them. It is critical the President and his
administration listen to the American people and permanently delay this
law.
I would add that if we look at the impact on the economy, not only is
this about higher premiums for middle-class families in this country,
not only is it about higher taxes that are going to be imposed upon
medical device manufacturers, on health insurance plans, pharmaceutical
companies--all of which, by the way, will be passed on to individual
consumers--it is also about the impact this will have on jobs and the
economy. If we look at the numbers that came out last week and what
they said about the impact of policies coming out of Washington, DC,
and the impact they are having on jobs in this country, the number of
people working part time for economic reasons--sometimes referred to as
involuntary part-time workers--increased by 322,000 people to 8.2
million total people in the month of June. These are people who are
working part time because their hours have been cut back or because
they were unable to find a full-time job.
The real unemployment rate, or what we call the U-6 rate, is 14.3
percent for June of 2013, which is an increase of one-half percentage
point over the previous month. That is the total percentage of
unemployed and underemployed workers, making the real number of
unemployed Americans in this country 22.6 million people. These are
people who are unemployed, want work but have stopped searching for a
job, or are working part time simply because they can't find full-time
employment.
I would add that when policies coming out of Washington, exemplified
by the ObamaCare mandates, are imposed on the American economy, it
makes it harder for job creators and employers in this country to
create the jobs necessary to affect these numbers in a positive way, to
get Americans back to work, and back to work in a full-time way and
back to work in a way where they are actually increasing their take-
home pay rather than having it decreased by higher costs for everything
they have to spend their income on, including the cost of health
insurance coverage.
We have been saying for a long time and there is study after study
that comes out that talks about how the health care law is going to
cause health insurance premiums to rise, and there have been a lot of
people who have gotten up here in the Senate, others in the
administration, in an attempt to defend the ObamaCare law who have
said: Oh, no, no, no, that is not going to be the case; it is actually
going to drive premiums down. We continue to hear that, but more and
more evidence comes in, and not just studies being done out there but
real-life examples of the impact this law is having on insurance
premiums.
In fact, there are some actuarial studies that have estimated
premiums in various States around the country and what the impact on
premiums would be. For the State of Colorado, in the individual market,
the estimate by the actuaries is that the insurance premium rates are
going to go up by 19 percent; the State of Indiana by 95 percent in the
individual market, by 10 percent in the small group market; the State
of Maine, the estimates are the individual market premiums are going to
go up by 40 percent, 9 percent in the small group market; the State of
Minnesota, in the individual market, a 42-percent increase in premiums
and 20 percent in the small group market; the State of Wisconsin, a 30-
percent increase in the individual market. In the State of Ohio, last
month the Department of Insurance announced the average individual
market health insurance premium in 2014 will cost 88 percent more.
According to Ohio insurance regulators, the department's initial
analysis of the proposed rate shows consumers will have fewer choices
and pay much higher premiums for their health insurance starting in the
year 2014.
Well, it shouldn't be any big surprise when we look at the
requirements in the new health care law. The new health care law says
you have to have a certain kind of coverage. You can't continue to
offer coverage available to people who might want to have different
choices about what types of things they want covered, what they want
their copays or their deductibles to be. Basically, the law says if you
are going to offer a plan, you have to offer this plan, it is a
government-approved plan, and it has to have these sorts of coverages
and these sorts of things and these bells and whistles.
The new law also says you can get insurance after you get sick. It is
called the guarantee issue. No longer is there any requirement to go
out and get insurance to protect yourself and prevent yourself from
having to be in that situation when illness strikes. Now, if you get
sick, you can go out and buy insurance.
It also requires community rating, which changes the way in which
health care costs are distributed across the range of people who are
covered by health care premiums in this country, making it more
expensive for younger people to get their health insurance coverage.
That is why we are seeing these steep increases in the individual
market.
Madam President, I ask unanimous consent to continue for a couple of
minutes.
The PRESIDING OFFICER. Two minutes?
Without objection, it is so ordered.
Mr. THUNE. So when we look at all the mandates, the new requirements
in the legislation, the new taxes in the legislation, and when we look
at all the States trying to deal with and cope with this, and all the
small businesses--and small businesses, obviously, weighed in heavily,
which is why, as I mentioned earlier, the White House said, look, we
are listening, we got the message, and so they waived this, they
delayed this at least for 1 year for the small businesses under the
employer mandate--all we are simply saying is: Look, there are lots of
problems associated with this law. This was a bad law. It is based upon
broken promises. It promised lower premiums; we are seeing higher
premiums. It includes higher taxes. We are going to see effects all
across the economy when it comes to jobs as people cut back and start
forcing people into part-time jobs so they are not hit with the
employer mandates under this legislation.
So the law affects jobs and it affects the economy. We have a
sluggish economic growth rate that has now been adjusted down to 1.8
percent in the last quarter, and we continue to sort of muddle along.
One of the reasons for that is because we here in Washington, DC,
continue to pile more and more costs on employers trying to do
business. So until we understand that to create jobs and grow the
economy we have to make it less difficult and less expensive for
employers and job creators to create jobs, we will continue to see this
trend in the future.
I would simply say to my colleagues here in the Senate, and to the
administration, if we are going to delay implementation of the employer
mandate for a year, let's delay the individual mandate as well, and
let's not just do it for a year, let's permanently delay this. Let's
start over and do this the right way, in a way that actually reduces
premiums and health care costs for people in this country, that makes
it less expensive and less difficult for small businesses to create
jobs and
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grow the economy, and to get Americans back to work in good jobs that
pay well, that increase the take-home pay so they can provide in a
better way for their families.
Madam President, with that, I yield the floor.
The PRESIDING OFFICER. The Senator from West Virginia.
Mr. MANCHIN. Madam President, I wanted to speak in a little detail on
another topic, and that is the direction we are going on the student
loan crisis, I guess. It is a shame we have come to this. A year ago, I
voted for the extension. We were told at that time that due to the
political atmosphere, we had the big election year coming up, that we
couldn't get into the details and fix it the way it maybe needed to be
fixed and should have been fixed back then. So a lot of us went ahead
and voted for the extension, and now we find ourselves in the same
position this year as we were last year. There will be another election
in 2014. So it seems as though we are always in an election cycle, and
if we allow that to continue to direct what we do and how we do it, we
would get little done here, which is what the public is getting
frustrated with.
A few of us got together, myself, Senators Alexander, Carper, and
King, and we decided maybe we could come together and work on
something. There is no perfect fix for anything here, I have found, and
this is complicated and confusing if you don't delve into it. So I
started looking into it more this year than I had before.
I think a lot of our colleagues, and a lot of people in the country,
believe the so-called ``doubling of the rates'' from 3.4 to 6.8 meant
everybody's rates had doubled. First of all, there was just a small
percentage of the loans we loaned out that were getting the advantage
of the 3.4 if we extend it. Seventy-five percent of the loans--75
percent of the money out there--is at the higher rate of 6.8 or above.
I have tried to understand, the best I can, all the different aspects
of the loans we have out there. We have the subsidized loans. Because
of family income and participation someone is able to get a subsidized
loan. What that means, if we break it down, is the first year you
qualify for a subsidized loan you can borrow up to $3,500, and $3,500
in today's higher education world doesn't go very far. You are also
allowed to borrow $2,000 of unsubsidized money, which means you would
have been paying 3.4 percent on the $3,500 and 6.8 percent on the
unsubsidized.
So as you can see, it is not all clear-cut. Then, in the second year,
you can borrow $4,500 subsidized and $2,000 in unsubsidized; and then
it goes to $5,500 and stays at $5,500 for the fourth year.
The thing that happens is the unsubsidized loans, if we are looking
at the unsubsidized loans at 6.8 percent, they are staying. We have had
some say it is better to leave it alone, do nothing. Let it go ahead
and double at 6.8 and leave it where it is. We worked out a proposal
along the lines of the President's proposal. Also, we had the so-called
House Republican proposal.
Our proposal is much different. This is not a Republican or
Democratic piece of legislation. It is a bipartisan piece. We looked at
all aspects of what we have to deal with in today's market.
On July 1 the rates went up. If we are able to come to agreement this
week or maybe the first of next week, we can retroactively bring those
back so that when you go to school this fall you will know exactly what
your rates will be. We came to a bipartisan agreement that those rates
could be 3.66 percent, and that is for all undergraduates.
Now if you are getting a subsidized or unsubsidized loan, a 1-year
extension goes from 3.4 percent to 6.8 percent. Under our proposal,
everything is at 3.66 percent. That will save about $9 billion this
year in interest that students would be responsible for paying--$9
billion for the youth of this country trying to get a higher education.
If we just do the 1-year extension, that is only a savings of $2
billion. So there is a $7 billion savings beyond what the 1-year
extension would do. We are just dealing with the facts that we have in
front of us.
So let's say you are going to a graduate unsubsidized Stafford loan,
which many people in graduate school get. Right now, that is at 6.8
percent. Under our proposal, that goes to 5.21 percent.
If you have a PLUS loan--that is parents and graduate students--today
you are paying 7.9 percent, and you have been paying 7.9 percent. Our
bill takes that to 6.21 percent. You can see the savings.
Some might say, well, the interest rates will go up after 3 or 4
years, and then you will be at a higher rate. We put also, the same as
in the law right now, an 8.25 percent cap. So if you borrow money this
year at 3.66 percent, that is locked in for the life of the loan. That
is what you pay for the money you borrow this year for the life of that
loan. Now, next year it could be 4.5 percent. It could go up with
inflation.
When I was in school, and later on, inflation kicked up to 16 or 17
percent. That is outrageous.
In the Senate, Republicans and Democrats have come to an agreement
that we don't think the policy of this country should be that we should
make a profit on the loans that students are receiving to educate
themselves to have a better quality of life and opportunity. We have
come to that agreement. That is not the bill we got from the House.
They want to use profits to pay down debt.
Now, I understand there is a lot more that needs to be done on the
profit end of it and how we get to the true cost. The Presiding Officer
has been working hard on that, and I am willing to work with her. But
the agreement we have in front of us today is that we are not going to
make any profit that will go to debt reduction. If there is a so-called
profit, it should go to reduce and give the lowest rate we could
possibly offer. That is what we have agreed on. We agreed on fixing the
rates for the life of the loan. That is not what came from the House.
So when I say it is a bipartisan bill, these are things we are
agreeing on that make a better piece of legislation.
People might say: But 4 years from now it might go up higher than 6.9
percent. In the 3 or 4 years that we know we will have tremendous
savings, there is a difference of $36 billion versus maybe $8 billion
if you just keep extending 1 year at a time. A $2 billion savings here,
a $9 billion savings here. It is not hard to do the math.
Then, talk about a comprehensive education bill, I pray to God that
we can get a comprehensive education bill, but I am not sure the
American public believes we are able to get any type of a consensus on
any type of comprehensive bill.
When I first got here, they told me we were trying to get our
financial house in order. Then we had the sequester coming at us. The
sequester basically was a penalty we voted on, but no one ever thought
we would let it get that Draconian, to the point we couldn't come to an
agreement and we would have to have this type of a punishment put on
ourselves. So we put a supercommittee together for the purpose of
getting a superdeal so we could get our financial house in order. It
wasn't that super. It didn't work.
So then the sequester kicked in and the Draconian cuts across the
board. You don't run your life that way, your business that way,
whether it is small or large. You don't cut everything. You have your
priorities and necessities you have to maintain in your life on a daily
basis. Then you have excesses you can do without. So you make
adjustments and you pick and choose.
That is not working right now, and what is happening is people are
suffering needlessly because we cannot come to an agreement to get our
financial house in order, to find a budget that works for this country,
to find a tax system that is fair and equitable that people believe in.
We haven't been able to do that.
We are being told: Let's go ahead and extend the 3.4 percent for the
smallest portion of the amount of loans that we loan out, and everyone
else can pay the higher rate.
I am not willing to do that. I think we can do better. I think we are
better than that--on both sides of the aisle. Chastising each other and
saying one wants to raise rates and one is insensitive toward students,
and it is a Republican or Democrat plan, doesn't fix anything around
here. It hasn't since I have been here, and I don't think it is going
to. It will if we put our country first. And we know one thing: By
putting our country first, we put our students first.
[[Page S5556]]
Without educating the populous, we have nothing. We can't compete in
the world of economics. We can't compete in the world of science and
technology. We just can't.
The best investment we can make is in our youth. The best investment
we can make is in education. We might buy a car and think that is a
great investment. We might buy a piece of property or a house and think
that is a great investment. The best investment we will ever make is in
education. We want to make it as affordable and doable as humanly
possible, and that is what we have worked on together, on a bipartisan
basis. We are hoping we can find common ground.
We have talked about caps. The caps are inherently built in. Let's
say you graduate, get a degree, and find a job that pays $40,000--which
is not a lot in today's market for the money invested--and get married
and have a child or two. With the system we have built in right now,
you only pay 15 percent of your disposable income. That breaks down to
about $142 a month that you will pay on your student loan to make it
affordable. If you are not able to pay that off at the end of 25 years,
it is exonerated and wiped out.
Pell grants. If a person is in need because of their income, they can
get up to $5,645 a year free. Those are grants we give out, which are
excellent, helping students who don't have an opportunity or chance,
with any support from their family, to be able to get a higher
education. We are doing an awful lot of things to help. The bottom line
is that we have come to an agreement that it shouldn't be subsidized,
there shouldn't be a profit made, and it should be affordable--and it
has to run efficiently.
I think $36 billion in savings over 4 years is pretty substantial
compared to us doing nothing. I also think those who say let the rates
go up to 6.8 percent are misinformed. I don't think they have been told
the facts or the truth.
What we are asking for is basically a level playing field, looking at
what we can do that is positive, getting more groups to sit down and
sincerely work toward what I think is going to be a good outcome and a
good process.
Extending what we have doesn't work. Not being able to come together
to make sure our loans are affordable is not acceptable. I think if we
continue to strive to work toward finding a reasonable outcome, we will
be able to succeed.
Tomorrow we will have a vote, and there will be more discussions
about student loans. The bottom line is we want rates to come down for
everybody. Every student in every category should have the benefit of
the lower rates that are available to the public today.
Madam President, I yield the floor
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. BLUMENTHAL. Madam President, over this past week I had the
opportunity to visit with many students, many faculty and staff of our
colleges, both private and public, all around the State of Connecticut.
I know the Presiding Officer has led very strongly in this effort.
What I found is that students and teachers of Connecticut and around
the country absolutely understand how destructive and lastingly harmful
this doubling of interest rates will be for people of all ages in
America.
Never before has higher education meant more to earning potential and
employment, now and in the future. Never before have the faculty,
staff, and students of America been more united in their understanding
of how critical higher education is--not only to them but to our
economy. Our students are the ones who will buy homes, build families,
start businesses, and contribute to our economy. They will do more to
give back and contribute if they have the great advantages of higher
education spared from the financially crippling debt that threatens
them now.
In fact, financially crippling debt is a reality for more than 73,000
people who owe an average of $29,000 in Connecticut alone. That debt is
a burden for our entire economy as much or more as it is for those
individuals. So there is a strong societal and national interest in
this issue.
I didn't need to tell the students of Connecticut what the
consequences are of doubling the interest rates, and I didn't need to
tell them what it would mean for their future. They told me.
They told me at Middlesex Community College, where I spoke to the
community college sector--I discussed the issue with the president of
that college, Anna Wasescha, along with public officials, students, and
financial aid people.
They told me at Northwestern Connecticut Community College, where I
spoke with the president Barbara Douglass and individuals there,
students and faculty, who noted to me that 51 percent of their students
received some kind of financial aid, including Stafford loans.
All around Connecticut I spoke to faculty and students, such as Sam
Chaney, who is a 2010 graduate of Quinnipiac. He said to me when
students graduate:
. . . you're not just paying rent, you're paying as much or
more in student loans. . . . I hope they're not in the
position I was in, being told not to worry about the sticker
price of college.
I heard from Irene Mulvey, the president of the Connecticut chapter
of the American Association of University Professors. Her organization
is constantly in touch with student borrowers and knows just how much
subsidized Stafford loans mean to them. As she said to me, ``As faculty
members, we see the impact that student loan debt has on our students
and their families every day.'' She called this doubling of interest
rates ``indefensible.''
She is correct. It is indefensible, unconscionable, unacceptable.
Even at 3.4 percent, as the Presiding Officer well knows, our Federal
Government profits from the student loan program. It profits in the
amount of $51 billion a year. Doubling the interest rate simply means
more profits for the Federal Government.
There is a fundamental principle at stake; that is, whether our
Nation is going to continue profiting from student loans, which should
be regarded not as a benefit to the students but an investment in our
Nation, not as a charitable or eleemosynary program but as a vital
investment in the skills and talents and the major resource our Nation
has as a free and democratic society, the talents and skills of our
people.
Freedom from student debt should be a fundamental national interest
as important as any that this body addresses. It is as vital to the
future of the country as our national defense.
I did not need to tell the students of Connecticut what this doubling
of interest rates would mean to them--$31 a month, $1,000 a year. They
know. They do the math. They get it better than people in this Chamber
or in the House of Representatives. They told me what the $1,000 would
mean to them. Elizabeth Tomasco: ``Textbooks and start saving for my
very own car.''
Gina: ``I would use $1,000 to pay for books. Don't double my rate.''
Across Connecticut, students are telling us: Don't double my rate.
I did not need to tell them as well that there are a lot of borrowers
in this country who get a pretty good rate, a lot better than 3.4
percent. In fact, those borrowers are the biggest financial
institutions, the big banks who borrow from the Federal Reserve at a
discount window at less than 1 percent--.75 percent often.
They are angry about it; that they are worth less in these financial
markets, in the view of our Federal Government that loans money, than
the big banks and big institutions that, in fact, are sometimes
regarded as too big to fail. Students are failing to pay back those
debts, but the nation is failing our students and it is failing itself
because our national interest is in the student loans and talents and
skills and opportunity it provides, not just in the next year or couple
of years but for a lifetime and for the long term of our Nation.
I am a proud supporter of the Bank on Student Loan Fairness Act,
which would give them the same kind of fairness, equivalent fairness
that our big banks enjoy when they borrow from the Federal Reserve. But
in the meantime, we need a solution for this next year, and it is the
Keep Student Loans Affordable Act. It is a remedy of short duration, I
hope, that will in the end be accompanied and followed by longer term
reforms that will give students the benefit of those lower rates, lower
even than 3.4 percent, so our Federal
[[Page S5557]]
Government ceases to use students as a profit center and ceases to take
advantage of them.
I am not against smart cuts to reduce our debt and our deficit. These
kinds of burdens on students, using them as a deficit solution, is not
a smart cut. That is an understatement. In the long term, we need to
reduce the cost of higher education, which has increased over the last
few decades by 1,000 percent. That is the result of year after year
overinflationary increases in tuition which over time have managed to
make a college degree unaffordable to all but the most well off unless
they use that kind of financially crippling debt to attend.
The age of supporting oneself through a 4-year college degree is past
for most. This unfortunate trend has been coupled with more and more
employers requiring a bachelor's degree for even consideration in the
hiring pool. So the doubling of interest rates is indeed indefensible,
as Irene Mulvey told me. It is indeed unacceptable in the greatest
nation in the history of the world--which must continue the quality and
affordability of higher education if we are to remain the greatest
nation in the history of the world.
I hope my colleagues will join the Members of this Senate who have
supported the Keep Student Loans Affordable Act and will support a
reasonable measure keeping these rates at 3.4 percent. To allow
variable rates and, in effect, teaser loan levels that can rise beyond
affordability, without caps, without protection is, in fact, against
the national interest. This measure will help us keep students in
school and spare them the kind of financially crippling debt that all
too many of our young people have when they leave college.
I yield the floor. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. WHITEHOUSE. Madam President, I ask unanimous consent the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WHITEHOUSE. I ask I be permitted to speak in morning business for
up to 20 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Time to Wake up
Mr. WHITEHOUSE. Madam President, I am here for my 38th weekly ``Time
to Wake Up'' speech, and today I want to ask the question: What if?
What if climate change is real? What if the 30-plus gigatons of
carbon pollution mankind is dumping into the atmosphere every year
makes a difference? What if it is warming the planet and changing the
weather? What if it is warming the seas and raising their level and
making them more acidic? What then? What if this is serious?
What if this is serious and we are not? What if this is serious and
we are sleepwalking when we should be awake? What if this is deadly
serious and we are reckless when we should be responsible?
What if we are completely missing this moment in history? Winston
Churchill talked about ``sharp agate points upon which . . . destiny
turns.'' What if our destiny will turn based upon what we do about
carbon? What if we have been warned? What if we have been thoroughly
and convincingly and reliably warned? What if we have been warned by
virtually every climate scientist--at least 95 percent of them--by the
scientists who work for the United States of America at the National
Oceanic and Atmospheric Administration, at the National Aeronautics and
Space Administration, by the vast majority of scientific societies,
such as the American Association for the Advancement of Science, the
American Geophysical Union, and the American Meteorological Society,
among others?
I ask unanimous consent to have a letter from a great number of those
organizations printed at the conclusion of my remarks.
What if we have been thoroughly and convincingly and reliably warned
by thorough, convincing, and reliable scientists and have chosen
instead to listen to the cranks and the polluters?
Let's play this out a bit. Foresight is supposed to be a capability
of our species. What if it turns out the world will care about this? We
Americans have held ourselves out as a beacon of light to other
nations. We have proclaimed we are a shining city on a hill. What if
that is true? What if President Clinton was right; that the power of
our American example is, indeed, greater than any example of our power?
What if Daniel Webster was right; that if the example of our great
democratic experiment ever became an argument against that experiment,
it would sound the knell of popular liberty throughout the world? What
if our political and moral failure to address carbon pollution became,
in fact, an argument against our American example, an argument against
our American example punctuated by the exclamation points of local
climate change happening right there in towns and barrios, hills and
hamlets, on coasts and farms all around the world?
What if the world takes notice of that? What if the world takes
notice of what is already happening all around them and takes notice of
how we blew it at dealing with carbon pollution and, as a result, turns
away from our great American experiment because of this conspicuous and
consequential failure of American democratic governance and leadership?
Let's really push it here. What if Abraham Lincoln was right, was not
just making it up when he said America was ``the last best hope of
Earth.'' The last best hope of Earth. He was not alone. Thomas
Jefferson too in his first inaugural said this American Government was
``the world's best hope.''
What if we are, indeed, the last best hope of Earth, a hope which it
is up to each American generation to, as Lincoln said, ``nobly save or
meanly lose''? What if we in this generation of Americans meanly lose
such a measure of that American light and hope in the world? What if
we, the children of the ``greatest generation,'' were to blunder into
history as the ``vilest generation'' because we failed so badly at this
plain and present duty?
In sum, what if the deniers, the mockers, and the scoffers are wrong?
What if they are wrong? Someone has to be. There are two sides to this.
What if it is the deniers and the scoffers and the mockers who are
wrong? What if the evidence keeps piling up and the tide of public
opinion keeps going out and the deniers are left stranded with their
inadequacies plainly visible?
Please, let's look at the two sides. On the side of waking up and
doing something about carbon pollution: the President of the United
States of America, the Joint Chiefs of Staff and our military leaders,
the U.S. Conference of Catholic Bishops, the National Council of the
Churches of Christ, and many faith groups and leaders. On the side of
waking up: icons of our American corporate community, including GM,
Ford, Coke, Pepsi, Nike, Apple, Walmart, and hundreds of others. Also
on the side of waking up: the property casualty insurance and
reinsurance industry and many in the electric utility industry and the
vast majority of national scientific societies. In particular, I wish
to mention the scientists at NASA who right now are driving an SUV-
sized rover around on the surface of Mars. That might be an
organization whose scientists actually know what they are talking
about.
What if it turns out that the other side of the argument is actually
phony?
What if it turns out that the other side of the argument is a few
cranks, a lot of people and organizations on the payroll of the
polluters, and a cynical propaganda campaign intended to mislead and
deceive?
What if it is the argument that climate change is a hoax--which we
hear around here--what if it is that argument that is the real hoax?
What if the so-called climategate scandal was no fraud at all, but
the whipped-up allegations were the fraud and the so-called climategate
was really climategate-gate?
What if that cynical, polluter-driven propaganda campaign is one of
the biggest and most successful frauds ever perpetrated on the public--
a fraud that, when it is ultimately exposed for what it is, will change
the way we think about political information and trust in corporations,
just as my generation seeing the Cuyahoga River burn changed the way we
thought about the environment?
[[Page S5558]]
What if the great climate denial fraud will stand in the annals of
American scandal beside Watergate and Teapot Dome and the corruption
leading up to the great crash of 1929 as a dark smear across the pages
of our American history?
There was an iconic recruiting poster for World War I. I wish I had
it with me, but I don't. It is a picture of a fellow sitting in his
armchair with two little children, and they are asking him: ``Daddy,
what did you do in the Great War?'' And he is looking sadly out at the
viewer of the poster because clearly he had not done his part in the
great war. That was the message of that poster--``Daddy, what did you
do in the Great War?'' What if we have to be asked by our children and
grandchildren, when they are studying this disgraceful episode in their
history classes, ``Mommy, what did you do in the great climate fraud?
Grandpa, what did you do in the great climate fraud?''
Why do I come every week to give these speeches? Because these
questions stick in my craw. These are the questions that haunt me and
that I can't shake. And upon the answer to these questions, to these
what-ifs, the future may depend, destiny may turn. I have asked them
today as questions, but many of the answers are already clear. Many of
the answers are crystal clear. Many of the answers are so likely clear
that no rational person would bet against them. And many of the answers
carry stakes so high that they cry out for prudent choices to be made.
Many of the answers are crystal clear--as clear as measurement. For
at least 800,000 years the concentration of carbon dioxide in the
Earth's atmosphere held between 170 and 300 parts per million of carbon
dioxide--for 800,000 years, always in that range. Now it is 400 parts
per million and climbing. That is a measurement. Oceans are already 30
percent more acidic than before the Industrial Revolution and getting
more so. That is a measurement. The winter water temperature of
Narragansett Bay has risen 4 degrees since the 1960s. That is a
measurement. Millions of acres of western pine forest, once protected
by cold, have been ravaged by the pine beetle. That is a measurement.
Thirteen of the past 15 years are among the hottest 15 years on record.
That is a measurement. Being against science is one thing. Being
against measurement, that takes us to a new extreme.
Many of the answers are so likely clear that no rational, prudent
person would bet against them. The principle that carbon dioxide and
water vapor in the atmosphere create a greenhouse effect that warms the
planet goes back to the time of the American Civil War. It is firmly
established science.
The head of the World Bank recently said, ``If you disagree with the
science of human-caused climate change, you are not disagreeing that
there is anthropogenic climate change; what you are disagreeing with is
science itself.''
I submit that my denier colleagues in their own personal lives would
never take the wild risks, the reckless risks they are asking us to
take on carbon. If they went to 100 doctors and 95 or more of the
doctors told them that their child or grandchild needed treatment and
it was urgent, I doubt very much they would go with the three or four
who didn't. In fact, it would probably be a matter for their State
child welfare services if they ignored that kind of warning about the
health of a child or a grandchild. But that is what they want us to do
on carbon pollution.
Many of the answers carry stakes so high that they plead for prudent
and rational choices. The downside is so deep that the balance has to
be toward precaution if we are indeed a rational species. We are
talking about fundamental changes in the habitability of our planet,
with considerable human dislocation and disorder a likely result. We
are talking about measurements of basic planetary conditions veering
outside the entirety of human experience, to measurements whose
antecedents are found only in geologic time and which we find there in
the geologic record, associated with massive disruptions, upheavals,
and die-offs.
The facts are clearly measured, the principles are solid and sound,
and the stakes are very high. Yet we sleepwalk on the precipice,
refusing to listen, refusing to speak of it, refusing to act when duty
calls us to act. It is time to wake up--or perhaps I should say, what
if it really is time to wake up and we are just missing it,
sleepwalking on the lip of the precipice, listening to the lullabies of
the polluters, and ignoring the facts and consequences that are plain
to our sight and reason, plain in front of our faces? What then?
There being no objection, the material was ordered to be printed in
the Record, as follows:
American Association for the
Advancement of Science,
Washington, DC, October 21, 2009.
Dear Senator: As you consider climate change legislation,
we, as leaders of scientific organizations, write to state
the consensus scientific view.
Observations throughout the world make it clear that
climate change is occurring, and rigorous scientific research
demonstrates that the greenhouse gases emitted by human
activities are the primary driver. These conclusions are
based on multiple independent lines of evidence, and contrary
assertions are inconsistent with an objective assessment of
the vast body of peer-reviewed science. Moreover, there is
strong evidence that ongoing climate change will have broad
impacts on society, including the global economy and on the
environment. For the United States, climate change impacts
include sea level rise for coastal states, greater threats of
extreme weather events, and increased risk of regional water
scarcity, urban heat waves, western wildfires, and the
disturbance of biological systems throughout the country. The
severity of climate change impacts is expected to increase
substantially in the coming decades \1\
If we are to avoid the most severe impacts of climate
change, emissions of greenhouse gases must be dramatically
reduced. In addition, adaptation will be necessary to address
those impacts that are already unavoidable. Adaptation
efforts include improved infrastructure design, more
sustainable management of water and other natural resources,
modified agricultural practices, and improved emergency
responses to storms, floods, fires and heat waves.
We in the scientific community offer our assistance to
inform your deliberations as you seek to address the impacts
of climate change.
\1\ The conclusions in this paragraph reflect the
scientific consensus represented by, for example, the
Intergovernmental Panel on Climate Change and U.S. Global
Change Research Program. Many scientific societies have
endorsed these findings in their own statements, including
the American Association for the Advancement of Science,
American Chemical Society, American Geophysical Union,
American Meteorological Society, and American Statistical
Association.
Alan I. Leshner, Executive Director, American Association
for the Advancement of Science; Timothy L. Grove,
President, American Geophysical Union; Keith Seitter,
Executive Director, American Meteorological Society;
Tuan-hua David Ho, President, American Society of Plant
Biologists; Lucinda Johnson, President, Association of
Econsystem Research Centers; Thomas Lane, President,
American Chemical Society; May R. Berenbaurn,
President, American Institute of Biological Sciences;
Mark Alley, President, American Society of Agronomy;
Sally C Morton, President, American Statistical
Association; Kent E. Holsinger, President, Botanical
Society of America; Kenneth Quesenberry, President,
Crop Science Society of America; William Y. Brown,
President, Natural Science Collections Alliance;
Douglas N. Arnold, President, Society of Industrial and
Applied Mathematics; Paul Bertsch, President, Soil
Science Society of America; Mary Power, President,
Ecological Society of America; Brian D. Kloeppel,
President, Organization of Biological Field Stations;
John Huelsenbeck, President, Society of Systematic
Biologists; Richard A. Anthes, President, University
Corporation of Atmospheric Research.
The PRESIDING OFFICER. The Senator from Michigan.
Ms. STABENOW. Madam President, before my friend from Rhode Island
leaves the floor, I wish to thank him for coming to the floor of the
Senate every week to give a message that we need to hear all the time
about a serious worldwide crisis. I thank him for his passion and for
calling on us to remember that when it is time for our children and
grandchildren to ask where we were, I want to say I was with Senator
Sheldon Whitehouse and those of us who care deeply about solving these
problems. So I thank the Senator from Rhode Island very much.
I thank all of our colleagues who have come to the floor today and
have spoken on the issue of keeping student loan rates low. I know
Senator Blumenthal was here a few minutes ago. Our chairman, Senator
Harkin, has come to the floor, as well as Senator Brown, Senator
Sanders, and Senator Reed, who has been such a passionate advocate and
leader on this
[[Page S5559]]
issue. I thank as well our Presiding Officer from Massachusetts for her
passion in keeping us on point. I thank Senator Boxer and Senator
Murray and others who have come to the floor, including Senator Kay
Hagan, who is leading this fight with Senator Jack Reed in what we
intend to do tomorrow, which is focus on a very simple issue: Let's not
do harm to students as it relates to student loan rates going up, while
we fix the larger problem of affordability of college.
Let's be very clear. The majority of the Senate voted on June 6 to
keep student loan rates at 3.4 percent--the majority. When we run for
office, if one person gets one more vote than the other person, that
person wins the election, and that is a majority. So it is unfortunate
that a majority could not have ruled here, but because of the rules of
the Senate, because of the rights of the minority and the filibuster
and so on, there have been objections from Republican colleagues, and
we have had to now go through this other process to overcome a
filibuster.
We had the vote, and the majority of the Senate voted to keep rates
low for students. Let's make that very clear. However, in order to
overcome a Republican filibuster, we need 60 votes to block that
filibuster. So tomorrow is about that vote.
We all know that on July 1 the interest rate for students jumped from
3.4 to 6.8 percent. Let's all look at what is happening around in our
communities with our families right now as well. Keep in mind, you can
get a mortgage or a car loan for about 4 percent. So we are now seeing
student loan interest rates higher than that. Under proposals we have
seen predominantly coming from the other side of the aisle that would
have those rates go up and up based on ``the market,'' we could see
those rates go to 7, 8, 9, 10 percent in the future. It makes no sense.
If you can get a car loan, if you can get a mortgage for about 4
percent, what about students? Why are we now in a situation where
college students are seeing their interest rates on their student loans
double--double--or higher, which has been proposed by many in this
body?
To add insult to injury, if we do not fix this the Federal Government
will start to gain huge profits, as our Presiding Officer has reminded
us over and over--more than $50 billion just this year on the backs of
students and families.
So what we are looking at right now is billions of dollars in profits
on the backs of students if the rate is doubled. If it goes higher, if
it goes to the 7 or 8 percent being talked about in the Republican
proposals or the 8.5 percent that was passed in the House, we are
looking at over $100 billion--more than that--in profits by the Federal
Government on the backs of students and families, right at a time when
they are just trying to hold it together.
They want to go to college. We want them to go to college. We want
them to get an education. We benefit as a country from making sure we
can outcompete and outeducate the competition around the world. Yet
those who say they care about students are proposing options that would
increase costs for students and profits for the Federal Government. We
should not be making profits on the backs of students who are trying to
go to college. So our proposal that we will be voting on tomorrow would
lock in the 3.4-percent interest rate on student loans to make sure
students and families can afford college.
I would like to share a couple of e-mails I have received out of
thousands. I want to thank students and families all across Michigan
who have engaged in this effort, who have gone to DontDoubleMyRate to
get information and tell their story, who have come to my Facebook page
and have called us and e-mailed us to tell us how this impacts them.
Corey, a student right now at Central Michigan University in Mount
Pleasant, MI, wrote to me about this issue and said:
I am asking you to please not allow my student loan rates
to be doubled. I am a hard-working and respectful student. I
make all of my payments. I go to class and do well. I work
hard and am grateful for the chance to get a higher
education, but if student loan rates go up I would be left to
make a decision whether or not school would be affordable.
Whether or not school would be affordable--that is what this issue
comes down to.
If we do not fix this, and fix it in a responsible way that keeps
costs low, students like Corey and 7 million students across our
country will have to rethink their college plans.
This issue should not be controversial. This is not a partisan issue.
If I were to pick a partisan issue on the floor of the Senate, it would
not be student loan interest rates and the cost of college. I would
think this is one of the areas on which we could come together.
Just last year we kept the interest rate low. We passed, for a year,
an extension of the 3.4-percent rate. It was good enough to do last
year; I do not know why we cannot keep that going while we tackle the
long-term solutions. This should not be partisan. I know there are
people of goodwill on both sides of the aisle trying to figure out
something. But, unfortunately, because of the desire of the other side
of the aisle and the desire of the House to have this market based and
float with the marketplace and go up with market interest rates, we
find ourselves in the situation where it is even worse to pass one of
the proposals that has been made rather than just allow the rates to go
back up to the fixed rate of 6.8 percent, which is really crazy.
Republicans, in what we see in the House of Representatives, cap the
rates at 8.5 percent and 10.5 percent. Now, again, remember, right now
you can get a car loan--you know, 15, 20 years, however long you
finance your car: 10, 15, 20 years--at 4 percent; have a 30-year
mortgage at 3.5, 4 percent, 4.5 percent, 5 percent--all less than what
we are talking about for a student to be able to get a loan to be able
to go to college, which we all say we want them to do.
We are lending to banks at a much lower rate, as our Presiding
Officer has reminded us over and over. I do understand it is a 24-hour
lending rate. I do understand it is a different structure. But, still,
if we can lend to banks at 0.75 percent, we cannot even fix a rate of
3.4 percent for students, when we have a tremendous stake in their
willingness to go to school and work hard and be successful?
So under the plans we are seeing on the other side of the aisle and
the plan we have seen in the House of Representatives, we would see
rates go to 7, 8, 9 percent; some of them tapped out at 10.5 percent--
10.5 percent. It makes no sense.
Corey from Central continues with his e-mail:
From the time we first start learning, we are encouraged to
attend college and get a good job so that we can be a part of
helping this country grow. I am simply asking you to help
continue to make this an affordable option for me, and many
others like me.
Our country will not grow without a strong middle class, and we will
not have a middle class if people cannot get an education to get the
skills they need, go to college, dream big dreams, and know they can be
successful in attaining those dreams.
We are saying we need to do everything possible to make sure students
can afford to go to college and that they do not come out with $20,000,
$30,000, $50,000 of debt. I talk to medical students coming out with
$100,000, $150,000 of debt. You could buy a house for that. Then,
rather than making a decision maybe to go into primary care, where we
certainly need doctors, they have to decide to go into a specialty
because they have to pay off their student loans. There are stories
like that all across our country--judgments being made.
So I have a very different view in terms of how we go about this--not
just in the short run but what we lock in for the long term. The
proposals on the other side lock in rates that will go up as interest
rates go up. I do not think we should be doing that.
Here is another e-mail from Matthew in Royal Oak:
Students are not asking for a bailout like the one Wall
Street got, just an opportunity to obtain an affordable
education so we can compete in a global economy.
That is what we are talking about: Corey and Matthew and 7 million
other people.
Let me conclude by saying that for me, this is very personal because
I would not have been able to go to college, I would not have been able
to be
[[Page S5560]]
the first one to get a 4-year college degree in my own family if people
I did not know in Michigan and in Washington had not decided that an
affordable education was important to have.
My dad was very ill when I was in high school. I had great grades,
but we did not have very much money. Because of a tuition-and-fees
scholarship I received and student loans I was able to go to college. I
want to make sure that every young person who wants to go to college
can do that, and that whether we know them or not--we know their name,
we know where they live--it does not matter. Nobody knew this red-
headed, freckle-faced kid from Clare, and yet because somebody put a
value on education and its importance to our country, I have had the
opportunities I have had in my life.
I think that is what this vote is about. Tomorrow is about keeping
the rates low, giving us time to address the broader issues around
affordability. There is a lot of work to do. We can do that on a
bipartisan basis, but first we need to start by doing no harm. That is
the vote tomorrow.
I hope we will see a ``yes'' vote on the Keep Student Loans
Affordable Act.
Thank you, Madam President.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. ALEXANDER. Madam President, I wonder if I might ask, through the
Chair, the Senator from Michigan a question. I notice her chart on 7
million students, and I wonder which 7 million students she is talking
about.
My understanding is there are 11 million students who will take out
new student loans this year, I believe that 2 million of them are low-
income students who get subsidized loans, and that the Democratic
Senator's proposal would help those 2 million students by keeping their
rate at 3.4 percent instead of 6.8 percent. So who are the 7 million
students the Senator from Michigan is talking about?
Ms. STABENOW. Madam President, if I might respond, this number comes
from the Joint Tax Committee. I would be happy to follow up with the
Senator on that, but that is where the number comes from.
Mr. ALEXANDER. I thank the Senator from Michigan.
It could be my numbers are wrong. I think the 7 million student
figure is actually a very good billboard for why not to support the
Democratic proposal but to support the bipartisan proposal because what
the proposal of the Senator from Michigan will do is keep rates high
for 7 million middle-income students whom her proposal does not help.
There are 11 million students across this country who are going to
college this fall. They will take 18 million loans out. They will
borrow over $100 billion. What happened on July 1 was that the rate
went back up to 6.8 percent for the loans that are for the lower income
students--only those. For the loans that go to the middle-income
students--and my understanding is there are about 7 million of those--
it stays right where it is: 6.8 percent.
Under the bipartisan proposal, their rates would be 3.66 percent. In
other words, the bipartisan proposal would not only create a permanent
solution, but it would lower rates--it would lower rates almost half--
for the 7 million middle-income students who otherwise would be
twisting in the wind for the next 10 years paying higher rates--
hundreds of millions of dollars of higher rates.
So the number 7 million, I believe, is correct, I would say to the
Senator from Michigan, but that is the number of middle-income students
who are going to be paying higher interest rates under her proposal. I
am glad she brought up the number. If I am mistaken about that, I need
to know it before tomorrow's vote because I believe there are 2 million
students with subsidized loans. That is who the Senator seeks to help.
There are 7 million students who are undergraduates who have loans that
are unsubsidized. Those are middle-income undergraduates. They are
going to be paying 6.8 percent under the Senator's proposal. They are
going to be paying 3.66 percent under the bipartisan proposal.
Ms. STABENOW. Would my friend from Tennessee yield for a question?
Mr. ALEXANDER. I would be happy to, Madam President.
Ms. STABENOW. I thank the Senator. First, in prefacing this in terms
of the number the Senator asked me about before, we will check. I do
know there are about 300,000 students in Michigan affected, over
500,000 in California. So that is almost 1 million. So the 2 million
the Senator is talking about seems low if those two States together
have about 850,000. But certainly we will check. We want to make sure
the numbers are right.
My question would be: The number the Senator quotes as the interest
rate in his proposal, is that a fixed rate or will that go up?
Mr. ALEXANDER. It is a fixed rate for the students who borrow the
money this year.
Ms. STABENOW. For next year, though?
Mr. ALEXANDER. Well, if you are 1 of the 11 million students who
borrow money under the bipartisan proposal--let's say you are an
undergraduate, and that is two-thirds of the loans--your rate would be
3.66 percent this year, next year, and for the next 10 years.
Next year it will be whatever it costs the government to borrow
money. The government will loan it to the student, without overcharging
the student, in order to reduce the debt to pay for government programs
or any other reason. So the formula would be that we would not add any
cost to the taxpayers, but we would not overcharge the students to
reduce the debt or to pay for a program. Next year the interest rate
might be higher. The next year it might be higher. But those would be
for new loans.
Then, of course, there are already two caps in the law that would be
continued under the bipartisan proposal. One says that any student at
any time can consolidate his or her loan at 8.25 percent. So the loan
cannot go higher than that.
The second says while you are paying off your loan, you will not pay
more than about 10 percent of your income. If after 20 years or so you
have not paid off your loan, it is forgiven. So these are two caps that
are already in the law.
Ms. STABENOW. Do I understand correctly, though, that for a student
next year who took out a loan, it might be higher? If a student took
out a loan in year 3, it might be higher? It is my understanding that
over time, over the next 3, 4, 5 years, we are looking at rates at
least of doubling, if not more. The Senator is saying cap it at 8.25.
That is a lot more than doubling of the rates that will happen right
now.
But is it accurate to say if the year in which you are taking out the
loan, depending on whether it is next year, the year after, the year
after, that it would be in anticipation that the interest rate would
rise?
Mr. ALEXANDER. I would say to the Senator through the Chair, she is
correct. The idea of this is instead of Congress playing political
``fix it'' during every election, we have turned this into a sort of
doc fix where we are treating students the same way we treat doctors
who serve Medicare patients. We run in here and have a big political
fight about what we should be paying. Instead of doing that, we have a
permanent solution that is based on what the market rate actually is.
We say whatever it costs the government, whatever it costs the
taxpayer, we loan it to the students at that level.
The Senator is correct; if it costs the government more to borrow the
money because the rates are higher that year, the rate will be higher
that year. But there is the 8.25-percent cap. Throughout the history of
the student loan program, there have been caps in the past. There was a
10-percent cap for about 15 years. There was a 9-percent cap for about
20 years. If the Senator is suggesting there be a cap on the loan at a
lower level than that, then the Senator will have to raise a lot of
money.
For example, if we had a 6.8-percent cap on all loans going forward,
my guess would be that it would cost $50 billion or $60 billion over a
10-year period of time. I do not know where we will get that money. So
the President made the proposal that we have a permanent solution. He
suggested that we take the amount of money--ask the Congressional
Budget Office. This is not some Republican or Democratic figure. Ask
the Congressional Budget Office: What does it cost to borrow the money
and to make the loans? Let's then loan it to the students. Let's not
overcharge them for any purpose. That is the proposal.
So my question would be, why would we do a short-term fix for 1 year
that
[[Page S5561]]
benefits a small percent of students, and leave 7 million middle-income
students twisting in the wind, paying an interest rate that is nearly
twice as much as they would pay under the bipartisan permanent solution
that is based on the very same idea the President proposed, that the
House of Representatives has passed, and that a bipartisan group here
has proposed?
I think the more Senators look into this and understand the cost of
it, they will agree the goal is to say, we do not want to add any cost
to the taxpayers, and we certainly do not want to overcharge the
students on a loan, that they will come out with something about like
what the bipartisan proposal is and what the House passed and what the
President proposed.
If I could make one other comment, the Senator from Michigan was
talking about large loans for students. I agree that is a problem. I am
a former university president. I am a former Education Secretary. I
have watched this for a long time. I think a lot of students are
borrowing too much money. We need to think about ways to change that.
Right now, they are entitled to borrow certain amounts, even if the
college thinks it is unwise for them to do that. Maybe we need to
change that. Maybe colleges need to have some skin in the game when
they make a loan, whether they are a public, or nonprofit or a for-
profit college. That is something we ought to look into.
But what we are debating this week is a simple question of what is a
fair rate? What is a fair rate? The bipartisan proposal is an 8-page
bill that says: Let's take what it costs the government to borrow the
money, that is whatever the Congressional Budget Office says it is,
let's loan it to the students without any profit, and let's have two
caps on it going forward. One would be 8.25 percent. Any student could
consolidate any loans at that level if it goes higher. The other would
be a cap on how much you have to pay each year as you pay your loan
back. I hope my friends on the other side recognize that unless I am
mistaken, their proposal does help, for 1 year, 2 million low-income
students who already have their interest paid by subsidy by the
taxpayers, who also are eligible, for the most part, for Pell grants.
But it does nothing for 7 million middle-income undergraduates whose
rates on new loans will stay at 6.8 percent.
The bipartisan proposal would lower those rates to nearly half that
level. Why would we leave those middle-income students--those 7 million
middle-income students--twisting in the wind, paying twice as much in
interest rates as they need to pay? That is the question. I hope after
the vote tomorrow that we can sit down, talk this through, and come to
a result. We should not be having political gamesmanship about this. We
are talking about 11 million families here, 18 million loans, over $100
billion. We are talking about people who are making their plans to go
to college. It is not easy to go. Many Senators have talked about that.
People might have $100,000 in loans, but they cannot get it through
the subsidized loan program. You can only receive up to $23,000 that
way. We can look at all of that at some point. But we need to pass this
8-page bill, set a fair rate, spare the taxpayers, spare the students.
There is no need to deal with ``some of the loans,'' when we can lower
rates for ``all of the loans'' and put it on a permanent fair basis,
very much in the way the President recommended in his budget, very much
in the way the House of Representatives passed it, and very much in the
way the bipartisan group has suggested.
I yield the floor.
The PRESIDING OFFICER. The Senator from New York.
Mr. SCHUMER. Madam President, I am going to be brief, because things
went a little longer. First, I have a great deal of respect for my good
friend, and he truly is my good friend, the Senator from Tennessee. I
understand what he is getting at. I certainly agree with one part of
his comments that the unsubsidized and subsidized students should be
given good treatment. We should not just aim at 2 million when there
are 7 million more. I am on board with that.
I would make three points in reference to my colleague's comments and
in reference to the bill, and why I am a sponsor of the Jack Reed bill.
First, the bottom line is, we here are in this mystical world of
baselines. Under present law, the government actually will make about
$180 billion from students over the next 10 years. It is revenue
neutral in the budgetary sense, but not in the family sense, in the
sense that families are actually going to end up paying more.
My good friend from Tennessee and many on his side--and they are
budget hawks--say they do not want to see that baseline changed. So
they have come up with a fine proposal if you believe that you should
not change that baseline. But if you believe, as I do, that actually
the government should not be making extra money from the students as
they pay, even if it means dipping into our Federal accounts to make
that happen, then it is not such a fine proposal. But let's not confuse
budget neutrality with neutrality between what the government does and
what students get.
The proposal is indeed budget neutral, as would be letting things
expire. The proposal is not family neutral. Students end up paying
more, more than the government's cost. That is point No. 1. I know my
colleague understands, and that is the dilemma we are in because there
are different values here. To me, if I had to do one thing, one of my
highest priorities and where the Federal Government ought to help out
families, middle-class families, is helping pay for the cost of
college.
Revenue neutrality, particularly at an artificially high baseline,
6.8 percent, does not help out families, does not make it worse than
the present baseline, does not make it better. I would like to make it
better.
Second point. I have spent much of my time in the Senate helping
middle-class families pay for college. I am the author of the American
Opportunity Tax Credit which gives every middle-class family up to
$180,000. So I agree with my colleague's point about the middle class,
gives them--I know he is going to want to ask me a question, but I
cannot. I will come back. I have a meeting on this issue with some of
the people from the White House right now, so I am not going to be able
to answer a question. I do not want my colleague to stay.
I believe in this strongly. The tax credit is something I am proud
of. That is on the books for 5 years, $2,500 in the pockets of middle-
class families to help pay for college. But one of the problems we face
is, every time we give the students a break, the colleges raise
tuition. So the family is not any easier off paying for college. We
need something to deal with that issue. I do not know what it is, but
it will not be in any plan we are going to pass in the next week or
two. So my view, to extend the present 3.4-percent rate for 1 year, to
keep the situation the way it was before July 1 for a year while we
come up with that type of solution, makes sense, makes a good deal of
sense.
Third. We have another problem. A lot of these for-profit colleges
have a high default rate. They raise the rates for everyone else. What
are we going to do about those? Some of those are not for-profit. But
any college that helps students get a lot of loans, and then has a huge
default rate, low graduation rate, makes all the rest of us pay. It is
a little like health care, where a few people are making the rest of us
pay quite a bit. That was through no fault of their own. Who knows what
this is. What do we do about them?
I agree with my good friend from Tennessee, we do not want to keep
doing this year to year, like the doc fix. It would be a lot better,
just like the doc fix, if we had a permanent solution that deals with
these two issues instead of brushes over them. A 1-year extension
keeping the present situation, not raising anybody's rates at all,
makes sense, because while students will gain some, not probably as
much as under present law, under the Reed law, now they may lose a lot
later, because there are no caps except for the 8.25 percent when you
refinance. But otherwise, the caps are each year. You can be 3.4 this
year, and if interest rates go up 3 percent, you will be at 6.4 next
year. If they go up 2 percent after that, you will be at 8.4. If they
go up 2 percent after that, you will be at 10.4 for your 4 years in
college.
We do not know what interest rates will be. It is anybody's guess.
But that is why caps are a good thing, so when
[[Page S5562]]
it gets too high, we have some limit. I am not sure a cap simply on
consolidation is a good enough cap.
I respect my friend from Tennessee, but I would argue there are two
reasons that the proposal Senator Stabenow talked about is better: One,
it does not make money from students to pay the government, which using
the present baseline and being budget neutral we would have to continue
to do.
No. 2, it doesn't allow us to get to a long-term solution, which we
must do and should do, and maybe now that we are in this dilemma we are
importuned for doing.
I wish to have a colloquy with my colleague from Tennessee. I will be
back after this meeting if he is still around. I respect him, and I
know he is trying to come up with a fair and good solution--one that
ideologically or substantively I might disagree with, but I hope we
keep moving toward one another so we can gain a good solution.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. ALEXANDER. I thank the Senator from New York. I understand he has
a previous meeting. I don't want to make him late because maybe it will
produce some result. I hope it will produce a result--I don't see an
issue that benefits either political party or any Senator.
The questions we who have been working on this have asked the
Congressional Budget Office are very simple. We have said our goal is
to create a permanent solution along the lines the President
recommended, that the House of Representatives has now passed, that
neither costs the taxpayers additional money or overcharges the
student. Please give us what the interest rates would be and what the
type of loan should be.
The Congressional Budget Office, the nonpartisan Congressional Budget
Office, goes through all of this and they suggest a variety of options
that we have.
What they have told us is that the proposal of the bipartisan group
comes as close to being equal as one can get. It is about nearly $1
billion over 10 years which, when you are loaning $100 billion a year,
is sort of a rounding error.
The intention is to loan it to the students for what it costs the
government to borrow the money, but we are not going to overcharge the
students and we are not going to ask the taxpayers to pay an additional
subsidy.
Within that, if you accepted that idea, then you could say there are
a variety of ways to do that. You could do it as the bipartisan group
has suggested or you could try to put a cap on it. Whenever you put a
cap on, it costs a lot more to students. A cap at 10 doesn't cost very
much because the interest rates aren't estimated to be that high for
undergraduates especially. But as you go down to 9, 8, 7 or 6.8, it
balloons very rapidly. We could meet that principle, fair to taxpayers
and fair to students, but we are going to have to raise a lot of money
to do it. I haven't heard anybody suggest where $50 or $60 million more
is going to come from.
I think it is better to go ahead and amend the House bill, get a
better bill, put the Senate's imprint on it, and send it to the
President. Let's let all of today's students take advantage of today's
low rates and pass a permanent solution that would reflect what the
actual cost is. It may go up; it may go down. That is the reality.
As we know, with low-income students, those eligible for subsidized
loans, the taxpayer already pays the interest on those loans while the
student is in college. That is about $50 billion over 10 years. Those
students are also eligible for Pell grants, most of them are, and that
is about $350 billion over 10 years. This is a substantial subsidy.
The Senator mentioned the Federal Credit Reform Act. The Federal
Credit Reform Act is the way the Congress has said the CBO should count
when it is making these computations, so it does that. It also does it
according to a fair value method of accounting. Maybe the simplest way
to explain it is to say the Federal Credit Reform Act actually favors
students pretty heavily in this computation. The fair market value
accounting is more realistic, and favors the taxpayers' point of view.
We are using the accounting system--or the CBO is--for this bill that
is more generous to students.
I still, after listening respectfully to all I have heard, don't see
why in the world we are going to insist that for the next year several
million middle-income students are going to have to pay 6.8 percent
when they could be paying 3.66. This is what I can't understand. I hope
we continue this debate and tomorrow we will have at least one vote on
it. I hope after that we have more discussion and that we come to a
result because there are a lot of families waiting for us to make a
decision.
The President has weighed in. The House of Representatives has passed
a bill. We have a bipartisan bill on the floor. We need to come to a
result, send it to the President so families can make their decisions
about how they are going to pay the college bills.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. MURPHY. Last year the most profitable company in America was
ExxonMobil. ExxonMobil made about $44.9 billion in profit last year.
America's student loan program did better. America's student loan
program last year made a profit of right around $50 billion, eclipsing
the profit of ExxonMobil, of Apple, of JPMorgan Chase. In fact, of
every U.S.-based company, none of them ran a profit as high, as steep,
as generous as the U.S. student loan program did.
Why I am coming down to the floor to support a 1-year freeze on
student loan rates is because, as you have led this argument, that is
the discussion we should be having. Why on Earth do we allow our
student loan program to make profits greater than any other American
company makes today? Why are our students being asked, more so than
almost any other population in our country, to bear the burden of
paying down our deficit? It doesn't make any sense.
It is time then that in the context of the Higher Education Act,
which we are hopefully going to debate later this year, we have that
broader conversation. This bill on the floor now, giving us a 1-year
freeze to keep students where they are today, paying a 3.4-percent
interest rate, just makes sense--both in the short term to try to make
sure students don't have to pay upward of $5,000 over the course of the
repayment of their loan but then allows us to start to have a
conversation with ourselves as to whether we want to allow the student
loan program to be the most profitable company in the United States on
the backs of students.
This matters to me because I am one of the millions of young
Americans who is still paying back my student loans. My wife and I are
paying them back as we speak. Of course, with two young little boys at
home, we are also scurrying to save as much as we can to pay for their
future college costs.
I am not going to stand here and complain because between my wife and
I we make a pretty good salary. We can afford to pay back our student
loans, and we can afford to squirrel a little bit away for our two
little kids. But our story is not the reality for millions of other
young families who can't afford to do both of those things.
The average college graduate in this country has a much lower
unemployment rate than other Americans, somewhere around 4 or 5
percent. Young college graduates today stand at an 8.8-percent
unemployment rate and an 18.3-percent underemployment rate. That is the
stuff we don't talk about enough. There are a lot of young people who
are working part-time or temporary jobs that don't bring in enough
money in order to pay back their student loans, which on average today
are somewhere around $30,000. That is the average. Everybody can point
to a neighbor or a friend who is walking out of their undergraduate
education today with $100,000 or more.
The fact is there are millions of families in the position of my
family. We are squeezed between paying back the debt we owe and trying
to put away money so our kids don't have to have the same kind of debt
we do. That is money that doesn't go into the main street of our
economy, doesn't go to fix up your house and put a carpenter to work,
and doesn't go to the local grocery store or to the restaurant around
the corner. Instead, it is money that gets sent, by and large, to the
big banks. It doesn't make sense. This bill on the floor allows us to
have this bigger, broader conversation.
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I will say this though. We are fooling ourselves if we think the
solution to our higher education affordability crisis is only the
interest rate we pay on loans. It is not. Shame on us if coming out of
the resolution of this debate, which I hope comes in the next couple of
weeks, we don't step back and say there is so much more that this
Senate and this Congress can be doing to take on the broader issue of
affordability.
Students took out about $113 billion in student loans this last year.
That is double what they took out just 10 years ago. We can't afford to
have the amount of money being taken out in student loans double on a
decade-by-decade basis. That will bankrupt not only our students, but
it will bankrupt our country no matter what interest rate we put on
these loans.
In the context of the Higher Education Act, we ought to start
challenging schools to think out of the box when it comes to assessing
the cost of education. Wesleyan University in Connecticut has given the
option to students to get a degree in 3 years instead of 4. More and
more schools are moving to cheaper but still high-value online
education.
It is probably time we stepped back and asked even tougher questions
about whether it makes sense to award degrees based on a largely
arbitrary number of credits, rather than an assessment of the skills
you have gained, maybe over 4 years but, frankly, maybe even over 2\1/
2\ or 3 years.
If college is about preparing students for the workforce, then maybe
we should be awarding degrees and costing out degrees based on whether
you are ready to enter the workforce, not just based on if you have
gone the requisite number of years or taken the requisite number of
courses. Maybe 50 years ago we could afford the system we have, but we
can't any longer. We can't have that conversation if we don't settle
this one.
My hope is we will be able to extend the 3.4-percent interest rate
for the time being and that we can have a serious conversation about
the issue of profitability in the long run.
Lastly, I will just say this. Senator Alexander has left the floor,
but the Republican proposal is temporary as well. He is right to point
out that for a certain subset of individuals who don't qualify today
for the 3.4-interest rate, the Republican proposal may, in the short
run, provide a different lower interest rate. But we know interest
rates are going up. We know their proposal is no less temporary than
the 1-year freeze we offered, because ultimately in the long run or,
frankly, in the medium run, those students who today might qualify for
a lower rate are going to be paying a much higher rate in the not-so-
distant future.
We are kidding ourselves if we think the benefit of the Republican
proposal is that in the long run students are all of a sudden going to
gain the benefit of today's interest rates, which is not how things
work. It is not how the trend line is going.
Lastly, about 1 month ago I was sitting with a group of counselors at
a local afterschool program in Danbury, CT. They were all sort of
working part-time jobs and counseling kids at this afterschool program
because they believed in the program. These were community-minded kids.
They were the salt-of-the-Earth kids who truly cared about trying to
help out disadvantaged youth in their neighborhood, but none of them
were going to college.
I asked them: Are you not going to college because of the cost?
They looked at me as if I had three heads. They said: Of course, the
reason we are not going to college is the cost. We would love to be in
college today, but there is no way we can afford it.
The fact is we are looking at 4.4 million students over the next 10
years who are likely to not be able to afford college simply because of
the cost. The difference between 3.4 and 6.8 percent can be $5,000 for
some students over the course of the repayment of their loan. That is
the difference maker for students. We are kidding ourselves if we don't
think that 18- and 19-year-old kids aren't doing the math when they are
deciding whether they can afford to go to college. They are much more
sophisticated than people on this floor think they are. They understand
the deal we are potentially giving them on the floor of the Senate is
one that will make college unaffordable for tens, if not hundreds, of
thousands of students. Shame on us if we don't have a better answer for
those kids in Danbury, CT, and millions of others similar to them
across the country who just want a shot at college and wish to make
sure that they alone are not asked to pick up the burden of paying down
the deficit of the United States.
I yield the floor.
The PRESIDING OFFICER (Mr. Murphy). The Senator from Massachusetts.
Ms. WARREN. Mr. President, I rise this evening in support of Keep
Student Loans Affordable, the bill that has been introduced by Senators
Reed and Hagan. We have been talking a lot in the last few hours about
student loans, about the cost of student loans, and we have talked
particularly about subsidized loans.
I just want to start this by pointing out that ``subsidized loans''
is not the right term. No one is subsidizing any of our students. The
lowest cost loans the U.S. Government issues today produce a profit for
the government. In other words, who is doing the subsidizing? Our
students are doing the subsidizing. They are the ones who are creating
the profits for the U.S. Government.
Let's talk about those profits. This year those profits, as the
Presiding Officer rightly pointed out, will be more than $50 billion.
Those are profits made on the student loans that are already
outstanding and the profits we are going to start making off the new
loans when the interest rate doubles at 6.8 percent.
Under this bill, Keep Student Loans Affordable Act, we are talking
about how to prevent making even more profits off our students--a
short-term patch to hold interest rates steady for all of our students
while we try to attack the core problems.
The problem we have as we deal with this, and the problem with the
Republican proposal, is right now the new loans are scheduled to
produce $184 billion in profits for the U.S. Government over the next
10 years.
Let me say that again. At the current interest rate of 6.8 percent,
which is where it went as of July 1 since Congress didn't act, the U.S.
Government will make $184 billion in profits off our students over the
next 10 years.
The Republicans have put forward a plan, and they have said in their
plan that they want to be ``budget neutral'' or ``deficit neutral.''
They have used both terms. But understand what that means. The proposal
they are putting forward, in fact, produces $184 billion in profits for
the U.S. Government. In fact, the Republican plan goes just a little
beyond that and produces an extra $1 billion in profits for the U.S.
Government. That is what the Republicans are putting forward.
How can you sell something that says we are going to make $185
billion off the backs of our students? The answer is, according to the
Republicans, to offer them a teaser rate. Tell them that just next year
we are going to keep that interest rate low. The year after that, well,
it might be a little bit higher, and the year after that it might just
be a little higher than that, and don't ask any questions about the
years going forward.
But understand this: Senator Alexander, for whom I have deep respect,
made the point he just wanted to use the CBO's scoring numbers. That is
the neutral arbiter of what things cost. What does the CBO say about
the Republican plan? The answer is it will produce more--that is just a
little bit more--than the same $184 billion in profits that come from
doubling the student loan interest rate to 6.8 percent.
In other words, what the Republicans are proposing is the same thing
you got in the mail when you got this zero percent interest teaser rate
credit card. Boy, we will give you something cheap up front, but don't
read the fine print, and don't see what is going to happen on down the
line--or the same thing that happened with the teaser-rate mortgages.
They were nice low payments at the beginning, until the whole thing
exploded later on.
That is the Republican plan. It is not a fix, it is just a different
way to make $184 billion in profits off the backs of our students.
What the Democrats are proposing is a plan that says: Don't raise the
interest rates on anybody. Just keep them where they are, including 3.4
percent on our Stafford loans. Let's keep it there.
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Here is a point I want to make that I haven't heard anybody talking
about. What the Democratic proposal has in it is an acknowledgement
that the U.S. Government is going to make less money doing that because
there is no back end to make this up. Because the U.S. Government is
going to lose money--it is not going to make as much money by doing
that--this plan has something in it to pay for it, to offset the cost
to the budget. We have proposed closing a tax loophole, raising about
$4 billion in new revenues so we don't make that $4 billion in revenues
off our kids immediately.
In other words, if we are going to reduce the profits we are trying
to make from our kids, there has to be a way to pay for it. The plan
proposed by the Democrats is short term. It is a 1-year fix, and it has
a proposal to pay for it because it actually proposes reducing the
profits the U.S. Government makes.
Take a look at the Republican plan. There is no pay in the Republican
plan because it proposes to continue to make that $184 billion over the
next 10 years.
So that is what this is about. We know what we need in the long term
is to solve two big problems: The first is the $1 trillion in
outstanding student loan debt. We have to find a better way to deal
with it, a way that is not continuing to produce profits for the U.S.
government. The second is the rising cost of college. We have to
address that, and it is going to be a hard problem to tackle. We can't
solve it in a matter of a few days. It takes time to do it.
So the Democrats propose: Don't raise interest rates on anyone. Don't
double my rate. Keep them where they are, and let's buy a year with a
short-term patch in order to address the systemic problems we need to
address--the outstanding student loan debt and the rising cost of
college for all of our students.
This is our chance to help our students. This is a small downpayment.
It is a small help for some of our students and a real commitment that
we are going to make a difference in the future. It is not a proposal
that says we are going to try to fool them, that we are going to reduce
prices just for a little while and then sock somebody else on the back
end. That is not what this should be about. That is not what the U.S.
Government should be doing. It is our responsibility, it is our
opportunity to invest in our students.
The Democrats propose we get started on that and we get started on it
tomorrow. I support the Keep Student Loans Affordable Act, and I
commend Senator Reed and Senator Hagan for their work. I hope tomorrow
this body will come together and pass it for our students and for our
country.
Mr. President, I yield the floor, and I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Ms. WARREN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Donnelly). Without objection, it is so
ordered.
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