[Congressional Record Volume 159, Number 112 (Wednesday, July 31, 2013)]
[House]
[Pages H5214-H5221]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BIPARTISAN STUDENT LOAN CERTAINTY ACT OF 2013
Mr. KLINE. Mr. Speaker, I move to suspend the rules and concur in the
Senate amendment to the bill (H.R. 1911) to amend the Higher Education
Act of 1965 to establish interest rates for new loans made on or after
July 1, 2013, to direct the Secretary of Education to convene the
Advisory Committee on Improving Postsecondary Education Data to conduct
a study on improvements to postsecondary education transparency at the
Federal level, and for other purposes.
The Clerk read the title of the bill.
The text of the Senate amendment is as follows:
Senate amendment:
Strike all after the first word and insert the following:
1. SHORT TITLE.
This Act may be cited as the ``Bipartisan Student Loan
Certainty Act of 2013''.
SEC. 2. INTEREST RATES.
(a) Interest Rates.--Section 455(b) of the Higher Education
Act of 1965 (20 U.S.C. 1087e(b)) is amended--
(1) in paragraph (7)--
(A) in the paragraph heading, by inserting ``and before
july 1, 2013'' after ``on or after july 1, 2006'';
(B) in subparagraph (A), by inserting ``and before July 1,
2013,'' after ``on or after July 1, 2006,'';
(C) in subparagraph (B), by inserting ``and before July 1,
2013,'' after ``on or after July 1, 2006,''; and
(D) in subparagraph (C), by inserting ``and before July 1,
2013,'' after ``on or after July 1, 2006,'';
(2) by redesignating paragraphs (8) and (9) as paragraphs
(9) and (10), respectively; and
(3) by inserting after paragraph (7) the following:
``(8) Interest rate provisions for new loans on or after
july 1, 2013.--
``(A) Rates for undergraduate fdsl and fdusl.--
Notwithstanding the preceding paragraphs of this subsection,
for Federal Direct Stafford Loans and Federal Direct
Unsubsidized Stafford Loans issued to undergraduate students,
for which the first disbursement is made on or after July 1,
2013, the applicable rate of interest shall, for loans
disbursed during any 12-month period beginning on July 1 and
ending on June 30, be determined on the preceding June 1 and
be equal to the lesser of--
``(i) a rate equal to the high yield of the 10-year
Treasury note auctioned at the final auction held prior to
such June 1 plus 2.05 percent; or
``(ii) 8.25 percent.
``(B) Rates for graduate and professional fdusl.--
Notwithstanding the preceding paragraphs of this subsection,
for Federal Direct Unsubsidized Stafford Loans issued to
graduate or professional students, for which the first
disbursement is made on or after July 1, 2013, the applicable
rate of interest shall, for loans disbursed during any 12-
month period beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and be equal to the lesser
of--
``(i) a rate equal to the high yield of the 10-year
Treasury note auctioned at the final auction held prior to
such June 1 plus 3.6 percent; or
[[Page H5215]]
``(ii) 9.5 percent.
``(C) PLUS loans.--Notwithstanding the preceding paragraphs
of this subsection, for Federal Direct PLUS Loans, for which
the first disbursement is made on or after July 1, 2013, the
applicable rate of interest shall, for loans disbursed during
any 12-month period beginning on July 1 and ending on June
30, be determined on the preceding June 1 and be equal to the
lesser of--
``(i) a rate equal to the high yield of the 10-year
Treasury note auctioned at the final auction held prior to
such June 1 plus 4.6 percent; or
``(ii) 10.5 percent.
``(D) Consolidation loans.--Notwithstanding the preceding
paragraphs of this subsection, any Federal Direct
Consolidation Loan for which the application is received on
or after July 1, 2013, shall bear interest at an annual rate
on the unpaid principal balance of the loan that is equal to
the weighted average of the interest rates on the loans
consolidated, rounded to the nearest higher one-eighth of one
percent.
``(E) Consultation.--The Secretary shall determine the
applicable rate of interest under this paragraph after
consultation with the Secretary of the Treasury and shall
publish such rate in the Federal Register as soon as
practicable after the date of determination.
``(F) Rate.--The applicable rate of interest determined
under this paragraph for a Federal Direct Stafford Loan, a
Federal Direct Unsubsidized Stafford Loan, or a Federal
Direct PLUS Loan shall be fixed for the period of the
loan.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect as if enacted on July 1, 2013.
SEC. 3. BUDGETARY EFFECTS.
(a) Paygo Scorecard.--The budgetary effects of this Act
shall not be entered on either PAYGO scorecard maintained
pursuant to section 4(d) of the Statutory Pay- As-You-Go Act
of 2010.
(b) Senate Paygo Scorecard.--The budgetary effects of this
Act shall not be entered on any PAYGO scorecard maintained
for purposes of section 201 of S. Con. Res. 21 (110th
Congress).
SEC. 4. STUDY ON THE ACTUAL COST OF ADMINISTERING THE FEDERAL
STUDENT LOAN PROGRAMS.
Not later than 120 days after the date of enactment of this
Act, the Comptroller General of the United States shall--
(1) complete a study that determines the actual cost to the
Federal Government of carrying out the Federal student loan
programs authorized under title IV of the Higher Education
Act of 1965 (20 U.S.C. 1070 et seq.), which shall--
(A) provide estimates relying on accurate information based
on past, current, and projected data as to the appropriate
index and mark-up rate for the Federal Government's cost of
borrowing that would allow the Federal Government to
effectively administer and cover the cost of the Federal
student programs authorized under title IV of the Higher
Education Act of 1965 (20 U.S.C. 1070 et seq.) under the
scoring rules outlined in the Federal Credit Reform Act of
1990 (2 U.S.C. 661 et seq.);
(B) provide the information described in this section in a
way that separates out administrative costs, interest rate,
and other loan terms and conditions; and
(C) set forth clear recommendations to the relevant
authorizing committees of Congress as to how future
legislation can incorporate the results of the study
described in this section to allow for the administration of
the Federal student loan programs authorized under title IV
of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.)
without generating any additional revenue to the Federal
Government except revenue that is needed to carry out such
programs; and
(2) prepare and submit a report to the Committee on Health,
Education, Labor, and Pensions of the Senate and the
Committee on Education and the Workforce of the House of
Representatives setting forth the conclusions of the study
described in this section in such a manner that the
recommendations included in the report can inform future
reauthorizations of the Higher Education Act of 1965 (20
U.S.C. 1001 et seq.).
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Minnesota (Mr. Kline) and the gentleman from California (Mr. George
Miller) each will control 20 minutes.
The Chair recognizes the gentleman from Minnesota.
General Leave
Mr. KLINE. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks on
H.R. 1911.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Minnesota?
There was no objection.
{time} 1615
Mr. KLINE. Mr. Speaker, I yield myself as much time as I may consume.
I rise today in strong support of the Bipartisan Student Loan
Certainty Act, also known as the Smarter Solutions for Students Act.
After many weeks of delay, I'm pleased we finally have a bipartisan
agreement to address the student loan interest rate problem. My
colleagues and I have been fighting for months for a long-term, market-
based solution that will serve students and taxpayers, and the
legislation before us today will do just that.
As you can see in this chart, much like the Smarter Solutions for
Students Act approved by the House back in May, the Bipartisan Student
Loan Certainty Act will tie student loan interest rates to the market,
taking away the uncertainty that comes with allowing Congress to
arbitrarily set rates.
Similarly, both bills provide a permanent fix to the interest rate
problem, granting students the certainty they need to make smart,
fiscally responsible investments in their education.
And most importantly, this legislation, like its predecessor, doesn't
unfairly penalize taxpayers. Unlike some half-baked proposals that
would put taxpayers on the hook for billions of dollars to pay for
artificially low student loan interest rates, both the House-passed
Smarter Solutions for Students Act and the Bipartisan Student Loan
Certainty Act will generate a small amount of savings over 10 years.
Reports confirm the similarities between the House bill and its
Senate companion. MSNBC has said the House bill is ``very similar'' to
the Senate proposal. The Minneapolis Star Tribune recently noted the
Senate compromise ``closely resembles'' the House-passed Smarter
Solutions for Students Act, and the Associated Press called the
differences between the two proposals ``relatively small.''
While I'm happy with the legislation we will consider today, I'm
disappointed it took us so long to get to this point. Students and
their families got roped into an all-too-tumultuous debate and were
forced to deal with the fallout when Congress was unable to reach an
agreement to prevent subsidized Stafford loan interest rates from
doubling on July 1.
By getting politicians out of the business of setting student loan
interest rates, the measure we consider today will protect students
from future uncertainty. I applaud my colleagues on the other side of
the aisle for finally recognizing this long-term, market-based proposal
for what it is: a win for students and taxpayers.
Mr. Speaker, I strongly urge my colleagues to join me in supporting
H.R. 1911.
I reserve the balance of my time.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself 4
minutes.
Mr. Speaker, I rise in support of the Bipartisan Student Loan
Certainty Act. It has been nearly a month since interest rates on
student loans were allowed to double on millions of our neediest
students, but thanks to the bipartisan negotiations in the Senate, we
now have a solution that provides real relief. And I want to thank
Senator Durbin, Senator Harkin, Senator Manchin, and Senator King for
all of their work on this effort.
Thanks to this legislation, over the next 5 years, borrowers across
the country will save $25 billion in interest payments. In my home
State of California, this bill will cut the cost of college for more
than 550,000 students this coming academic year. It was worth the wait.
When we started work on this issue, I said that any long-term
solution to student loan interest rates must help, not harm the
students or their families, must not make college more expensive, and
it must protect students in the future from spiking interest rates. I
believe that this bipartisan bill accomplishes that goal.
It locks in interest rates for borrowers when they sign on to their
loans; it provides a reasonable cap to protect students from rising
interest rates; and it rolls back the doubling of interest rates,
saving students and families real money right now.
Today's bipartisan student loan deal stands in stark contrast to the
partisan bill passed by the House majority in May. The bill would have
made college more expensive by nearly $4 billion to students and their
families. It would have subjected students to a bait-and-switch scheme.
It offered students teaser rates that balloon annually, leaving
students deeper in debt and guessing what they will owe.
If you look at this chart, you will see that, under the bipartisan
agreement we're voting on today, it will cost students about $11,363.
The current law raises the cost to $14,000, and the bill that passed
the House, the Republican
[[Page H5216]]
bill, was $16,400. So it's been well worth students to have this
disagreement, to have this wait so that we could save this kind of
money for students and families.
Next year's freshmen who borrow a maximum amount of subsidized and
unsubsidized Stafford loans over 5 years would have paid $5,000 more in
interest rates under the House Republican plan than under today's
bipartisan compromise, and nearly $2,000 more than if we did nothing.
The House majority's solution wasn't a solution at all. Their
approach was best summed up by the chair of the Higher Education
Subcommittee who recently said, ``It is not the role of the Congress to
make college affordable or accessible.''
I couldn't disagree more. That statement explains why their bill
piled debt on the backs of students rather than trying to lighten the
load.
The Senate bill before us today takes the opposite approach. It saves
students and families money.
I understand the concerns that some have raised by this solution.
While it provides real relief for the next few years, it does not solve
the long-term student debt crisis. We have much more work to do to
address the underlying cost of college, and we must remain on guard
against any unacceptable rise in interest rates.
In the meantime, we now have a bill that will make a positive
difference to families struggling to pay for college.
Today, I ask the Republican majority to drop their support for the
original House bill that was so devastating to students and families
and, instead, support this bipartisan bill that delivers real interest
rate relief for millions of Americans.
I reserve the balance of my time.
Mr. KLINE. Mr. Speaker, I yield 4 minutes to the gentlewoman from
North Carolina (Ms. Foxx), the chair of the Higher Education
Subcommittee.
Ms. FOXX. Mr. Speaker, I thank the chairman for yielding time.
I rise in support of the Smarter Solutions for Students Act, renamed
as the Bipartisan Student Loan Certainty Act by the Senate. It's about
time that bipartisanship on this issue won the day in Washington.
Earlier this year, my colleagues and I warmly welcomed the
President's ideas to settle how student loan interest rates are
calculated. Referencing his plan and his premise that student loan
interest rates should be permanently free of politics and set using
market interest rates, we introduced, and a bipartisan House majority
passed, the Smarter Solutions for Students Act in May, well before
rates were scheduled to double on July 1.
Our friends in the Senate were on a much different schedule. Rather
than immediately building on the striking similarities between
President Obama's initial proposal and the House Republican solution,
Senate Democrats chose infighting over completing this important work.
July 1 came and went without any agreement from the Senate. Rates
doubled.
But advocates of common sense and bipartisanship made a better case.
Last week, Senate Democrats finally chose to support a permanent,
market-based solution much like what the President had originally
requested and practically identical to our Smarter Solutions for
Students Act.
Campaign promises and political posturing should not play a role in
the calculation of student loan interest rates. As we've seen,
Washington's involvement in the rate-setting equation is a recipe for
uncertainty and confusion. Borrowers deserve better.
The Bipartisan Student Loan Certainty Act will apply predictable,
market-based interest rates to all Federal Stafford and PLUS loans,
ensuring that student and parent borrowers will be able to capitalize
with certainty on low rates while being shielded from high rates by
specified caps.
From personal experience, I know that paying for college is hard
work. It's getting harder as tuition and fees increase, and the vast
majority of American households are feeling that pressure.
The need for solutions to help ease the challenge of college
affordability is especially acute in today's jobless economy. Many
recent graduates took out loans with the expectation that they would be
able to find a job to pay off their debt. Now, many find themselves
among the 53 percent of their peers struggling with un-or
underemployment.
Like our colleagues across the aisle, we want every student to have
the necessary, honest information they need to make an informed
decision about the financial obligations they voluntarily assume, and
we want taxpayer subsidies for higher education to be well-spent, not
wasted.
Now, with interest rates settled permanently for students and
taxpayers, the Higher Education Subcommittee I chair will continue to
look for and promote solutions to help bring clarity to college costs
for all students and families considering the investment.
Students, families, and taxpayers deserve a long-term student loan
solution, not more can-kicking from Washington. The Bipartisan Student
Loan Certainty Act, like the House-passed Smarter Solutions for
Students Act, puts an end to temporary fixes and campaign promises that
have failed to strengthen our Nation's student loan system. This
legislation offers students simplicity and predictability as they
prepare to pay for college.
The American people deserve the clarity, certainty, and protection
guaranteed by this legislation. I urge a ``yes'' vote.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself 30
seconds.
I would not want the Members of this House to believe that somehow
this bill that we're going to vote on in a few minutes is the same as
the Republican bill. This bill saves $25 billion for those students
over the next 5 years. The Republican bill that was voted on in this
House costs those students a billion dollars. So there's a big
difference. As I say, it was well worth the wait.
So let's understand very clearly. The Members of this House are
getting a better deal with this legislation if they vote ``yes'' on
this bill, both sides of the aisle.
I yield 3 minutes to the gentleman from Connecticut (Mr. Courtney).
Mr. COURTNEY. Mr. Speaker, I, too, rise in support of the Student
Loan Certainty Act and again want to emphasize the fact that, compared
to the product that came out of this Chamber on May 23 that the
majority passed on a partisan, party-line vote, on which the White
House issued a veto threat, the final bill that's before us here today
is a far superior piece of legislation that protects students.
Again, as Mr. Miller said, the numbers don't lie. The bill that the
Republicans passed on May 23 had a 4.3 percent interest rate, which was
a teaser rate. The bill that's being passed here today is 3.86 percent,
and over time, that nets about $5,000 of additional savings for
students. That's real money, and that certainly is something that's
worth the wait.
But what I want to point out is that there is actually, in my
opinion, a more fundamental difference which is so critical for
borrowers, which is that this piece of legislation will fix the rate at
time of origination. In other words, when students take on these 10-
year notes, which is what Stafford student loans are, the rate is fixed
at the time the note is written.
The bill that came out on May 23 was a floating variable rate product
which would not be set until the time that students commenced payment.
Some students take Stafford loans out over a period of 5 and 6 years,
so the rates that they were touting back on May 23 were an illusion.
They were not what the rate was that the student actually was going to
be paying.
And again, for this country, which went through the trauma of the
subprime mortgage variable rate fiasco, this is a critical difference
which provides greater protection for the borrower.
If you go online today, a 30-year mortgage for a house is about 4
percent, for an auto loan it's about 3.8 percent. They are fixed loans
if you took those loans out today. And that's exactly what this
compromise creates is that there will be real borrower certainty and
protection, unlike the bill that recklessly, and on a partisan, party-
line basis, flew out of this Chamber on May 23.
This is a better deal for America's students. It's why, again, the
process that we went through was worth it. And again, it's certainly
worth people's support.
At the end of the day, though, let's remember, students are still
paying
[[Page H5217]]
into the deficit of this country. The Congressional Budget Office has
told us over 10 years, $184 billion of revenue is going to be generated
through this program towards the deficit.
We need to change that. That's not the purpose of the Stafford
student loan program. When Senator Stafford from Vermont passed it many
years ago, it was about providing an affordable system of access for
higher education, not a cash windfall for the coffers of the
government.
And that's why we have more work to do. That's why we need to pass a
Higher Education Authorization Act which, again, balances these
priorities in the right direction for students, not for government
coffers. And again, this legislation gives us the time to address that
issue and come out with an even better program for students which,
again, is good for them and good for our country, to make sure that we
have a workforce which is ready for the challenges of the future.
{time} 1630
Mr. KLINE. Mr. Speaker, I yield 2 minutes to a member of the
committee, the gentleman from Nevada, Dr. Heck.
Mr. HECK of Nevada. Mr. Speaker, I rise in strong support of the
Bipartisan Student Loan Certainty Act of 2013.
As the first in my family to go to college--and as a parent--I fully
understand the value of a high-quality education and the opportunities
it provides. I also know that accessing higher education is not cheap.
I just started paying back the student loans of my daughter. I'm still
paying back my student loans for medical school.
Throughout Nevada, many new high school graduates are preparing to
head to college this fall. Without this bipartisan compromise,
originally proposed by the House Committee on Education and the
Workforce and based largely on the President's own proposal, students
face significant uncertainty over their student loans. This legislation
provides a permanent, market-based solution that gives students and
taxpayers the certainty they need and deserve. Additionally, by
ensuring the interest rates are set by the market, rather than
legislators, this bill rightly takes politics out of the student loan
discussion.
While we must continue our work to address the skyrocketing costs of
higher education--because the much greater issue is the total
indebtedness upon graduation--this bill is an important step in
addressing the near-term needs of students.
I strongly support H.R. 1911 and urge the passage of this important
bill to help not only Nevada students, but students throughout our
Nation.
Mr. GEORGE MILLER of California. I yield 3 minutes to the gentleman
from New York (Mr. Bishop).
Mr. BISHOP of New York. I thank the gentleman for yielding.
I rise today in support of the underlying legislation. Although this
compromise is far from perfect, it is a step that must be taken in
order to provide financial relief to American students and their
families.
This legislation will bring undergraduate interest rates back under 4
percent for the upcoming academic year--a far more sustainable and
appropriate level than the current 6.8 percent rates. Graduate students
and parents will also benefit from lowered interest rates within this
bill. Importantly, and in contrast to the bill that previously passed
the House, the legislation also locks in those interest rates for the
lifetime of each annually disbursed loan, providing student borrowers
with critical consumer protections and a measure of predictability.
Finally, this compromise provides interest rate caps for all student
loans, offering an essential safety net to protect students and their
families from the whims of market-based rates.
While this isn't a bill that I would have written, we must all
recognize the urgency of our current situation and pass it today.
Classes are starting at many institutions within just a few weeks.
Students around the country are signing master promissory notes even as
we speak, committing themselves to years of debt and loan repayments in
order to make an investment in their future. At the very least, this
Congress has the responsibility to momentarily end the political
gridlock that paralyzes our Nation and notify these hardworking student
what their interest rates will be.
However, let's not think for one second that our work on college
access and affordability is now complete. With the Congressional Budget
Office projecting interest rates of 10-year Treasury notes--the
baseline that determines student interest rates--to rise significantly
over the next 5 years, we must work proactively and cooperatively to
assure affordable student interest rates not only for present students
but future students as well.
American student loan debt stands at $1.1 trillion. And it continues
to rise. The Federal Government continues to make a huge profit on
student loan repayment, even as students are forced to shoulder more of
the burden than ever before. Balancing our deficit on the backs of
student is simply not right, especially when considering the broader
economic impact of saddling students with untenable amounts of debt.
When borrowers are forced to devote huge chunks of their paychecks to
student loan repayment, it means they will have less income to spend on
major purchases like homes or vehicles. They are less likely to start a
business. They are less likely to invest in retirement accounts or the
stock market--all negative indicators that will affect our economic
prosperity now and into the future.
Mr. Speaker, a college education has represented a path to the middle
class for millions of American families. Taking direct action to bring
down the cost of a college degree by lowering student loan interest
rates is a step in the right direction. I urge my colleagues to support
this bill.
Mr. KLINE. I yield 2 minutes to another member of the committee, the
gentleman from Pennsylvania (Mr. Thompson).
Mr. THOMPSON of Pennsylvania. Thank you, Mr. Chairman, for yielding.
Mr. Speaker, as an original cosponsor of H.R. 1911, the Bipartisan
Student Loan Certainty Act, I rise in support of the Senate amendment
to H.R. 1911.
President Obama, as part of his budget request, proposed returning
student loan interest rates to a system of market-based variable rates
tagged to the 10-year Treasury note.
As a member of the Education and Workforce Committee, I can attest
the committee staff and members worked in good faith to meet the
President's request, developing a bill that could pass the House and
promote certainty for student borrowers. The House moved to pass the
bill in May, reasserting that access to education for so many of
America's young people should not be subject to annual political
battles. Unfortunately, the Senate chose politics over students and
delayed passage of the legislation until last week.
The positive is that H.R. 1911 is a complete departure from what had
become an annual debate within Congress on how to set the rates for
student loans. This measure modifies how interest rates on most Federal
student loans are set, returning to a system under which interest rates
are tied to market rates, but with rates fixed for the period of the
loan. It would apply retroactively to any loans since July 1, when the
3.4 interest rate on Stafford loans rose to 6.8 percent.
This bill will transition the student loan system to one that is more
predictable and affordable--one that protects both taxpayers and
students. We have a responsibility to America's youth. We have a
responsibility to the students such as those seeking opportunities at
Penn State, Pitt, Lock Haven, Clarion, Edinboro, Juniata, Dubois
Business College, and South Hills. We have to put forward a long-term
plan for college affordability. This bill is a good first step and will
offer students the lowest possible rate for higher education while
ensuring the solvency of these important loan programs.
I urge my colleagues to support this commonsense, bipartisan
legislation.
Mr. GEORGE MILLER of California. I yield 3 minutes to the gentleman
from Colorado (Mr. Polis).
Mr. POLIS. I'm very pleased that finally we are taking action on the
pressing issue of college affordability for constituents of mine across
Colorado and Americans across our country.
Absent congressional action, the current law today has effectively
doubled
[[Page H5218]]
the interest rate that our neediest families pay to be able to borrow
money for afford college to 6.8 percent. I believe that the previous
bill that passed the House was better than the doubling to 6.8 percent.
It would save families money in the short- and medium-term while
Congress worked through a final solution. But I'm very proud to say
here today that this bill is far better. And I encourage my colleagues
on both sides of the aisle to support this bill, which has several
features that are strong improvements over the original House-passed
version, including a fixed interest rate for the life of the loan so
that our students are not beholden to the fluctuations of the market
when they can least afford it--after they graduate.
This bill would keep interest rates low for our neediest students and
their families, providing some certainty and some surety. Under this
bill, the typical undergraduate student borrower this year will save
$1,500 over the life of a loan. A graduate student will save over
$3,000.
This bill is a step towards making sure that our student loan system
is not subject to the whims of Washington every week, with arbitrary
expirations and control over the interest rate. We have to make sure
that our students are able to plan their futures.
This bill is but the first step in the much-needed reforms that we
need as we reauthorize the Higher Education Act. I encourage all of my
colleagues to support this bill to keep college affordable now, and I
hope that my colleagues will be able to consider Representative Petri's
and my H.R. 1716 bill as we look towards long-term solutions.
The ExCEL Act, H.R. 1716, would replace this complicated array of
loans, subsidies, deferments, forbearances, and repayment options with
a single loan repaid through simplified and improved income-based
repayment. One of our goals is to protect our neediest Americans.
Income-based repayment is a better tool than interest subsidies. While
interest subsidies are based on a student's family income before
school, income-based repayment ensures that students are protected when
they truly need it--when they graduate from school, if they go through
tough times, or if they're in a service-related profession. Under the
ExCEL Act, we include strong borrower protections so our neediest
students after graduation will be paying effectively a zero percent
rate for the balance of their payments.
We need to pass this bill now and send it to President Obama to
prevent our students this fall from paying 6.8 percent. I hope we can
continue the discussion and dialogue about thoughtful student loan
reform proposals like the ExCEL Act that address keeping college
affordable for American families.
I am so grateful the Democrats and Republicans have come together to,
hopefully, pass a bill here today that will be able to be brought to
President Obama for his signature to provide some commonsense and
predictability by lowering the student loan interest rates from 6.8
percent, which they are under statute today, and putting us on a path
toward fiscal sustainability.
I urge my colleagues to support this bill.
Mr. KLINE. Mr. Speaker, can I inquire as to how much time is
remaining on each side?
The SPEAKER pro tempore (Mr. Hultgren). The gentleman from Minnesota
(Mr. Kline) has 10\1/2\ minutes remaining. The gentleman from
California (Mr. George Miller) has 7 minutes remaining.
Mr. KLINE. Thank you, Mr. Speaker.
I yield 3 minutes to another member of the committee, the gentleman
from Indiana (Mr. Messer).
Mr. MESSER. Mr. Speaker, I rise today in support of the Smarter
Solutions for Students Act, also known as the Bipartisan Student Loan
Certainty Act. I commend Chairman Kline; our Education Subcommittee
chairwoman, Ms. Foxx; Ranking Member Miller; and others for their hard
work and diligence throughout this process of getting this bill where
it is today.
I am pleased that cooler heads have prevailed and Senate Democrats
finally have agreed to the commonsense solutions proposed months ago by
House Republicans and the President in his budget to stop interest
rates on student loans from doubling. This is a good deal for 11
million students. The rates are better in this agreement. Students will
save an estimated $1,500 in interest over the life of their college
loans as a result.
Those beneficiaries include more than 200,000 students in Indiana
alone, who will be taking out their student loans this year. It will
help young people like John Houston, a Ball State University student
and intern in my office this summer, who will be taking out student
loans as he heads back to school this fall. Getting Congress out of the
business of randomly setting interest rates is a good deal--both for
students like John and taxpayers.
The bill will allow students to benefit from lower interest rates and
prevent taxpayers from being forced to subsidize arbitrary rates set by
politicians for political reasons rather than for policy purposes.
Maybe most importantly, Mr. Speaker, this legislation shows that, even
in a challenging partisan environment, Congress can come together and
work on behalf of the American people to make their lives a little
easier. I hope this agreement builds momentum for reaching bipartisan
solutions to other problems that our Nation faces.
I urge my colleagues to support this measure.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield 2 minutes to
the gentlewoman from Texas (Ms. Jackson Lee).
(Ms. JACKSON LEE asked and was given permission to revise and extend
her remarks.)
Ms. JACKSON LEE. I'm just delighted to be able to say that the
leadership of the Senate realized that the Republican bill would have
overwhelmed our young people.
I was just talking to someone just a few minutes ago, and they were
saying we need to have a commitment that every person that graduates
from college has a job. We should also have a commitment that every
young person that wants to go to school and get a higher education
should not be burdened with hundreds of thousands of dollars of debt.
For over 2 years, our good friend, Mr. Courtney from Connecticut,
Democrats, the Education Committee, and Mr. Miller have been begging on
behalf of the American children to not cause them to pay this enormous
amount but to hold the interest rates for middle class families and
working families at 3.4 percent. And we struggled. There were many
discussions in the United States Senate. And the reason why they
continue to struggle is because they wanted to make sure that the
victory came out for those young people of working parents and middle
class parents. That's why we're here today--because they held out and
we held out. Now we're glad to be in a bipartisan mode. But it's
important to note that this was a struggle.
If we pass this bill and get it on the President's desk, the 3.6
percent or so will be held. As we go forward over the years, we'll have
a measured increase. Not a high increase to market rates or rates
higher than that, but a measured increase or 3, 4, or 6 percent. And
then some 5 years out, when it reaches about 7 percent, we'll have the
ability as a Congress to come back and look. Because we should not
burden our students to the point where they cannot get an education.
We all are created equal. Maybe education is not written in the
Constitution, but certainly the opportunity for the pursuit of
happiness. Therefore, the opportunity for education must be protected.
This is a crucial difference between the bipartisan Senate bill of
$11,000. The current law right now is $14,000. And what the House
Republican bill passed was almost $17,000.
Mr. Speaker, this is a relief. This is to be applauded. And I'm
delighted that we have finally come to our senses.
Today the House of Representatives will have a second chance to get
Student Loans right. This is an opportunity to relieve the fears and
anxiety of families of college bound students across the nation by
passing H.R. 1911--the Bipartisan Student Loan Certainty Act of 2013.
By passing this legislation the Congress can take a concrete step
toward restoring the economic security, educational opportunities, and
peace of mind of America's students.
The goal of our nation should be to educate our youth to reach their
greatest potential in life. A good education should be accessible and
affordable to all of your young people.
[[Page H5219]]
For too long, millions of America's best and brightest have been
waiting for Congress to find a responsible solution to rising student
loan interest rates. While House Republicans have insisted on saddling
students with even more debt, the bipartisan legislation we passed
today seeks to ease that burden.
This bipartisan compromise offers hardworking students and families
critical protections, reduces rates on all new loans this year, and
saves undergraduates $1,500 on average over the life of their loans.
The plan caps market-based interest rates, ensuring students won't
bear the brunt of skyrocketing rates in the future. While the House
Republican bill considered earlier this year only offered uncertainty,
insecurity, and more debt for our students, the Senate compromise that
we are considering today will restore a sense of security for nearly 11
million Americans who are seeking a better life through higher
education.
The passage of the College Cost Reduction and Access Act of 2007,
Congress made historic investments in student aid. The law did what
Congress should always do when considering the needs of students
seeking education to improve their chances of success. This bill halved
interest rates on need-based federal student loans to 3.4 percent--
making these loans more affordable for low- and middle-income students.
If Congress doesn't act before July, the rate will jump back up to 6.8
percent, making it much more difficult for many American students and
their families to afford a college education.
I represent colleges and universities in my District who serve the
higher education needs of tens of thousands of Houstonians and others
who come to our city for its education opportunities.
A college education should not be only for the lucky few, but should
be available to all of those with skill and determination. Given the
opportunity, millions of young and older Americans would access higher
education to provide their families with a more certain financial
future, while also strengthening our nation's economic and national
defense human capital. A college degree is also becoming essential to a
growing number of jobs in the 21st century economy.
STEM Education Statistics
STEM workers earn 26 percent more than non-STEM graduates.
By 2018 we will need: 710,000 Computing workers, 160,000 Engineers,
70,000 Physical Scientists, 40,000 Life Science workers, and 20,000
Mathematics workers.
STEM Computing Jobs are critical to America's future: Software
engineers, Computer networking workers, Systems analysis, and Computer
researcher or support workers.
College student STEM retention according to the President's report is
improved when students have the proper peer and instructor support
system, which is what Superintendent Dr. Soner Tarim has done at each
of the area's 17 Harmony Schools.
By providing access to an affordable education we are eliminating the
shortage in two ways by: (1) creating opportunities for Americans to
prepare for STEM careers, and (2) by welcoming those from other
countries who choose to study and remain in the United States to work.
According to the Association for Computing Machinery K-12 computer
science education as a component of STEM education would help students
have a deeper understanding of the fundamentals of computing, which is
a critical foundational knowledge for a wide range of education needs
for other STEM education programs and future jobs.
We know that fewer than 40 percent of new college students enter
College intending to get a STEM related degree. This is not good enough
for America--we need to do much better.
By making college more affordable and accessible we could increase
the retention of the STEM degree majors from 40 percent to 50 percent,
if we reach this goal the nation can meet three fourths of the 1
million STEM workers we will need.
Minority college students who major in STEM higher education make 25
percent more than minority graduates with non-STEM educations. Minority
students who take STEM jobs make 50 percent more than minority non-STEM
graduates.
Students and families cannot wait any longer to know how much they
will owe on their student loans in the coming academic year. Making
college more affordable is critical to sustaining America's economic
competiveness. Business leaders know it is vital for the workforce of
tomorrow to get an education beyond high school. If more of today's
students cannot afford college, businesses will not have the workers
with the education and training they need to keep our economy
competitive and dynamic far into the future.
I urge my colleagues in joining me in support of this Student Loan
legislation.
PROJECTED INTEREST RATES UNDER SENATE BIPARTISAN AGREEMENT
Below are the projected interest rates under the bipartisan Senate
agreement for 2013-2023:
----------------------------------------------------------------------------------------------------------------
Undergraduate
students Parent loans for
Year (subsidized and Graduate students undergraduate
unsubsidized students (PLUS)
Stafford loans)
----------------------------------------------------------------------------------------------------------------
2013............................................. 3.86 5.41 6.41
2014............................................. 4.62 6.17 7.17
2015............................................. 5.4 6.95 7.95
2016............................................. 6.29 7.84 8.84
2017............................................. 7 8.55 9.55
2018............................................. 7.25 8.8 9.8
2019............................................. 7.25 8.8 9.8
2020............................................. 7.25 8.8 9.8
2021............................................. 7.25 8.8 9.8
2022............................................. 7.25 8.8 9.8
2023............................................. 7.25 8.8 9.8
Caps............................................. 8.25% 9.50% 10.50%
----------------------------------------------------------------------------------------------------------------
Note: Rates fixed through repayment once borrowed. Rates are based on CBO projections of 10-year Treasury rates.
Mr. KLINE. Mr. Speaker, I have no other speakers, and I'm prepared to
close.
Mr. GEORGE MILLER of California. I have no further speakers.
Mr. Speaker, in closing, I want to thank the chair of the committee
for bringing this bill to the floor as soon as it was possible to do,
but certainly before we break for August.
This legislation, as I said earlier, is a vast improvement over what
we voted on before and what was presented to this House. I think
families all across the country with students heading off to college or
returning to college this fall will be happy to know that as they take
out a student loan this year, they will save over the next 5 years some
$25 billion because those loans that they take out will have that
interest rate guaranteed at that rate today and for the life of that
loan.
{time} 1645
Big distinction between this bill and the bill that was presented for
the House to vote on, which many of us rejected but the Republicans
supported and was passed to the Senate. Over the next 10 years, it
provides about $4 billion in additional relief.
What's important to know is that this will deal with making college
more affordable. But, clearly, what is on the agenda of the Education
and Workforce Committee is making sure that we're dealing with the cost
of college so that we can reduce the student debt in this country, we
can reduce the affordability of college in this country.
We expect that as we struggle to try to figure out how to provide
this loan money on behalf of the taxpayers to these students who are
the future of our economy, the future of our society, that the
institutions will struggle with seeing what they can do to lower the
cost of these colleges.
This is a very exciting time in postsecondary education because we
have opportunities now with technologies and the ability to present
classes in new formats, in new forums for students much differently
than in the past. We've got to make sure that we're providing that
quality education, but perhaps in a way that's more cost efficient. And
efficiency isn't the enemy of intellectual curiosity or intellectual
achievement or scholastic achievement, but it may be helpful to
[[Page H5220]]
those families who are struggling with a debt to provide one, two, or
three children a college education, or for those students who graduated
who are struggling with that debt as they enter the job market.
So we really want to say that we've done the best we can under these
circumstances with this legislation, but we expect the institutions of
higher education all across this country to reexamine how they're doing
their business and what they can do to reduce the cost of college. And
we'll continue to do our part, trying to make it more affordable for
the American family.
But in the past, we've seen where we put money in at the top and the
States took the money out at the bottom. We're not going to play that
game anymore, and we can't play that game anymore. That has ended up
with a lot of increased debt on the part of students. Certainly with
respect to the public institutions, the States have to step up and
share the responsibility for their public institutions. We cannot have
this situation where they continue to decline their support and then
foster that off on parents and students, and then the parents and
students need help from the Federal Government. That chain has got to
stop here.
But I think today, this is a big and important step in terms of the
affordability of college for students. And all of the indicators are
that that college degree is well worth it over the lifetime of work of
students, over the types of jobs that they will get, the types of wages
that they will receive. It's still a huge benefit. There has been a lot
of discussion over the last few months that maybe college isn't worth
it anymore. It is, but we have to do it right. And young people have to
be able to obtain that college education, and they have to do it with
the least amount of debt possible.
With that, I yield back the balance of my time.
Mr. KLINE. Mr. Speaker, I yield myself the balance of my time.
It's always interesting to listen to the debate here on the floor. No
matter how hard we try to use the word ``bipartisan,'' we get into
these partisan squabbles: the Republican bill was bad and this bill is
good, and that bill is--look, we needed to change the status quo, and
that's always hard to do.
We had some pretty simple goals here that we were trying to reach. We
wanted to get out of the partisan political squabble that was occurring
in this city every year as we tried to figure out, through some
alchemy, what the student loan interest rate ought to be. The answer
has been in front of us for a long time: the market is the best
determiner of that.
So we wanted to put together legislation that would get us out of
this political squabble, let the market do this in a way that was fair
to students and fair to taxpayers. Let the market do it based on the
10-year Treasury, which is the best indicator of what it costs the
Federal Government to borrow money; do it so that it was as close to
budget neutral as we could get it.
The President of the United States had a proposal that did those
things. At the end of 10 years, I think the President's budget saved
the taxpayer about $3 billion. The House bill that we've been
discussing saved the taxpayers about $3.5 billion, And this bipartisan
Senate bill, just under $1 billion saved. That's budget neutral in this
city, in a 10-year window, from the Congressional Budget Office. We're
trying to get that.
It was a bizarre circumstance, Mr. Speaker, that I and House
Republicans were working with the White House and the Department of
Education trying to convince our Senate colleagues, Senate Democratic
leadership that the answer was there in front of them, all they had to
do was pick it up and pass it. We can get it done in this House. We can
answer the questions of parents and students and put some certainty in
this. I am very, very pleased that the Senate was able to put together
that bipartisan--
Mr. GEORGE MILLER of California. Will the gentleman yield?
Mr. KLINE. I yield to the gentleman from California.
Mr. GEORGE MILLER of California. I didn't mean to interrupt. I
thought you were going to yield back your time. I just wanted to ask
you for 30 seconds. I thank the gentleman for yielding.
We have these differences at the Member level and the institutional
level.
I just forgot, before I sat down, to thank the staffs of both sides
of our committee for their professional work. Because whatever's going
on on the surface here and surface warfare, we know that, underneath,
the staff is trying to make it work out whatever direction we decide to
move in. So I just want to thank so much the staff both of the majority
and minority side for their help.
Mr. KLINE. I thank the gentleman.
Reclaiming my time, I will pick up on that note because we could not
have done this without the hard work of some really instrumental
people.
Certainly, I'd like to take a moment to recognize and thank the
committee staff, as my colleague has done, for their hard work on this
important issue, both sides of the aisle.
First, I would like to thank the majority staff director, Juliane
Sullivan; our education policy director, James Bergeron; and
professional staff member Brian Melnyk; and of course Amy Jones,
sitting next to me here today, who started working to solve this
problem more than a year ago. That's the frustrating thing here, Mr.
Speaker. This problem didn't arise in April or May. We've known for
more than a year, with certainty, that we had to address this issue. So
I thank Amy for her passion in all higher education work. I know she's
just resting up so that we can start into reauthorization of the Higher
Education Act as we go forward.
Certainly I'd like to thank Virginia Foxx, the chairman of the
Subcommittee on Higher Education and Workforce Training, who helped
craft the Smarter Solutions for Students Act. Again, I would remind my
colleagues, this was a bipartisan bill. It came out of the committee
bipartisan, came off the floor with a bipartisan vote, and Ms. Foxx
deserves a lot of credit for her hard work.
In closing, I remind my colleagues, the legislation before us today
is a victory for students, families, and taxpayers. It deserves our
robust support.
I urge my colleagues to vote ``yes'' on the bipartisan Student Loan
Certainty Act, and I yield back the balance of my time.
Mr. DeFAZIO. Mr. Speaker, today I will vote for H.R. 1911, the
Bipartisan Student Loan Certainty Act of 2013. Due to congressional
inaction student loan rates doubled to 6.8% on July 1st. This is not
the bill I would've written but it was necessary to come to an
agreement so that today's students don't see their interest rates
double. It would have been my preference to pass the legislation
introduced by Senator Elizabeth Warren that gives students the same low
interest rates that the Federal Reserve grants Wall Street banks.
With passage of H.R. 1911, this year's students will only pay a 3.8%
interest rate when they go back to school in the fall. This rate will
be locked in for the entire life of their loan. Although the interest
rates will likely increase for future students under this bill, they
should remain below the current 6.8% for the next few years. This is a
short term solution to the long term problem of rising college costs
and increasing student debt. I stand ready to work with my colleagues
to address the issue of college affordability including student loan
interest rates in the upcoming reauthorization of the Higher Education
Act.
Mrs. McCARTHY of New York. Mr. Speaker, as you may know, on July 1st
the rate for subsidized Stafford student loans doubled from 3.4% to
6.8%. Today, students already face over $1 trillion in student loan
debt nationally and any effort to further indebt hardworking students
and families would be disgraceful. This Congress needs to act in a
responsible fashion in order to help alleviate the cost prohibitive
status of higher education in this country. Today, I am pleased to say
that this Congress has acted to help students and families by putting
forward H.R. 1911, the Bipartisan Student Loan Certainty Act of 2013,
legislation that I am proud to support.
Unlike the proposals floated earlier this Congress by the House
majority, this bill offers students and families a reasonable way to
finance higher education. As opposed to rates that fluctuate throughout
the life of the loan, H.R. 1911 allows for a variable rate for new
borrowers that adjusts yearly but is fixed for the life of the loan
once borrowed. Further, the bill offers lower interest rates for
undergraduate borrowers of subsidized and unsubsidized Stafford loans
by pairing them to the 10 yr Treasury (T) bill + 2.05% as opposed to
the 10 yr T bill + 2.5% in the original House majority proposal.
Lastly, the bill offers interest rate caps for borrowers to ensure that
interest
[[Page H5221]]
rates do not soar to undesirable levels in the years to come.
If this bill is signed into law, rates on new subsidized Stafford and
PLUS loans will go down this year. Undergraduates would borrow at
3.86%, a cut from 6.8%, graduate students would borrow Stafford loans
at 5.4%, a cut from 6.8% and parents and graduates borrowing PLUS loans
would borrow at 6.4%, a cut from 7.9%. For a freshman undergraduate
beginning school this year and taking out the maximum amount of loans,
he/she will save $3,300 in interest payments over their college career
as compared to current law and undergraduate students would save $25
billion in debt relief, according to CBO projections, over the next
five years as compared to current law. While this bill represents a
significant improvement for students, I do have reservations that the
undergraduate interest rate cap, currently set at 8.25%, is too high.
While it is widely believed that students will enjoy low rates in the
short-term, there is a strong possibility that rates will skyrocket as
our national economy improves. I believe that, for undergraduates, a
lower cap should be considered and I would welcome its continued review
by this Congress in the years to come.
Overall, Mr. Speaker, this is a good bill that will give students and
families alike significant financial relief and stability in the years
to come.
Mr. GENE GREEN of Texas. Mr. Speaker, I rise today to express my
opposition to the Motion to Concur in the Senate Amendment to H.R.
1911, the Smarter Solutions for Students Act.
This bill returns federal student loans to a system of market-based
variable rates, an imprudent policy that seeks profits for deficit
reduction at the expense of students struggling with the substantial
and climbing cost of post-secondary education.
While the bill may appear to reverse the interest rate hike that
occurred on July 1, setting rates at 3.8 percent for this year and 4.6
percent for next year for undergraduate Stafford student loan
borrowers, it is essentially a bait and switch that will pile extra
debt onto students when the current record-low rates inevitably rise.
This is unacceptable. Student loan debt is a major drag on the
American economy, reaching $1 trillion and climbing, and recently
surpassing credit card debt as the largest form of consumer debt.
Approximately 60 percent of students take out loans to attend college,
and increasing the costs of borrowing will prevent millions from being
able to pursue higher education.
While the interest rate caps are a step in the right direction, they
are too high to meaningfully protect students when the temporarily low
rates give way to rates that are even higher than the 6.8 percent rate
this bill attempts to fix.
College educated students are the future engine of our country, and
anyone who wants to pursue a post-secondary education should have the
opportunity to do so without going into crushing debt. I urge my
colleagues to vote against this legislation and instead, extend the
current interest rate of 3.4 percent until Congress enacts a true long-
term solution to the cost of college that is worthy of our Nation's
young people.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Minnesota (Mr. Kline) that the House suspend the rules
and concur in the Senate amendment to the bill, H.R. 1911.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. GEORGE MILLER of California. Mr. Speaker, on that I demand the
yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
____________________