[Congressional Record Volume 160, Number 68 (Wednesday, May 7, 2014)]
[Senate]
[Pages S2782-S2785]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STUDENT DEBT
Mr. BLUMENTHAL. Mr. President, I would like to proceed with remarks
on the student debt and loan issue, and I will be brief because I know
it is late. There have been some very remarkable and eloquent remarks
and personal stories about the meaning of college education.
My dad came to this country in 1955 at the age of 17 without even a
high school degree. He never had one. He spoke very little or no
English and had virtually nothing more than the shirt on his back and
knew no one. Throughout his life one of his highest aspirations was for
his children, my brother and me, to have a college education. He valued
it almost more than anything else that he could hope for us to have. It
was part of his dream. For him and countless immigrants and countless
working men and women born in this country for decades, a college
education has been part of the American dream, part of the fair shot
that every American should have, an economic opportunity at self-
fulfillment and developing their full potential because that is what
education helps us to do. That is the reason why Americans are going
into debt at unprecedented levels, because they believe in that
American dream and the fair shot that it gives people through
opportunity in this greatest Nation in the history of the world. It is
part of our DNA as Americans that we aspire to educate and fulfill all
of our potential, which benefits not only us but the whole country and
all of our society.
The average level of debt in Connecticut is about $27,000--
calamitously bad not only for those individuals but also for our
Nation. For the individuals it means that financially crippling burden
stops them from marrying at the time they wish, having children when
they might like, starting businesses, buying homes, and moving forward
with their lives. Who can start a small business with tens of thousands
of dollars of debt? Risk taking is constrained and straitjacketed.
People's personal lives are affected and changed forever.
Student debt today has increased concurrently to approximately $1.2
trillion in this country. What we are doing in this proposal by
providing a fair shot to those folks who have debt now and those who
will incur it in the future is simply enabling them to do what people
are able to do with other kinds of debt, whether it is their homes or
their cars--to refinance so that they get the benefit of lower interest
rates so they avoid that financially crippling burden saddling their
lives so that they are able to buy homes, start families, and begin
businesses in ways that benefit them and everyone in our society.
There is another dark side of this conversation which is that the
American government profits off the backs of students who have incurred
debt and who are beginning their lives in debt right now. In fact, the
United States profits from these loans even at 3.86 percent. So the
stark crass fact is that even with this relief that we are suggesting
and proposing and agitating to
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give to these students who have debt now, graduates that are out there
with debt with 8, 10, some 11 or 12 percent interest rates, the U.S.
Government will still make money from those loans--less money but the
loans are still profit-making.
We should regard higher education as an investment in the future and
not a revenue source or profit source. We should regard students as an
investment--a personnel investment, a human resources investment, to
put it again in crass business terms--that will pay off for years, not
as immediate profit centers. That kind of wise investment looks beyond
this quarter or next quarter. It looks to the human revenue in quality
of life and contributions and new inventions that will change our lives
for the better, in a more productive workplace that will make our
companies more successful and profitable.
I hear from people all around the State of Connecticut. I got a
stirring and moving email today from Bob in Naugatuck who told me his
granddaughter has a student loan that he has cosigned and therefore he
is potentially liable for it. Dean told me about his master's degree
and that he is $55,000 in debt, struggling to support his family with
his wife. Between them they have four jobs.
Alese, a mother of three, went back to school when her children were
young because she ``wanted to make sure they had an example to follow
when they finished high school.'' She is now $46,000 in debt.
As much as our economy is recovering, these folks are in danger of
being left behind.
There are other measures that we should adopt, such as the uniform
forms for college costs that will fully inform people about what debt
they are incurring, the Pell grant expansion, the bills mentioned for
net price calculated, and expanding other types of grants. We should
take a step forward to provide a fair shot for all Americans in this
measure that enables refinancing of loans that otherwise will crush our
human potential and leave us poorer as a Nation.
I thank the Chair, and I yield the floor for my distinguished
colleague from Wisconsin.
The PRESIDING OFFICER. The Senator from Wisconsin.
Ms. BALDWIN. Mr. President, I rise today to speak about a growing
crisis in our Nation that threatens our economy and the future strength
of our country. A college education should be a path to the middle
class, not a path to indebtedness. But today America carries the burden
of $1.2 trillion in student loan debt.
In my home State of Wisconsin almost 70 percent of the students
graduating from 4-year institutions will have student loan debt, and
the average debt amount will be $28,000. This is real money. This is
real money that isn't going into growing our economy at a time when we
desperately need economic growth. This is real money that isn't going
towards buying a student's or graduate's first car or first home.
The total amount of student debt in the United States has tripled in
the last decade, from $363 billion in the year 2005 to over $1 trillion
today. At the same time Federal financial support for students has not
kept up with the need. The Pell Grant once covered $7 out of every $10.
Today it covers $3 out of every $10 in college costs. In addition many
States have scaled back their investments in higher education. The fact
is that State investment in higher education has declined significantly
over past decades, which has exacerbated the problem, particularly as
States struggle to balance their budgets in these tough economic times.
Their investments in students have decreased, meaning higher tuition,
fewer grants, and fewer scholarships.
I heard from Wisconsin students that the cost of a higher education
in my State puts college out of reach for too many. Thirty years ago
undergraduate tuition at the University of Wisconsin-Madison campus was
about $1,000. Today it is well over $8,000, and it is not just in my
home State of Wisconsin. Across the country tuition at public 4-year
colleges has tripled. This all means that more students are borrowing
through Federal student loan programs to cover the high cost of a
higher education. For students in the University of Wisconsin system,
unmet need after grants and scholarships is over $9,000, nearly
doubling in the last decade. Yet the Federal Government limits on
subsidized loans have remained relatively stagnant over those same 30
years. In many cases the limit on what a student can borrow through the
Stafford Loan Program means their loans will not even cover the cost of
tuition, let alone other significant college expenses. The promise of a
higher education has instead become a burden that has fallen squarely
on the shoulders of students and their families.
Today, reflecting the trend of shifting costs onto students, 44
percent of college operating expenses are paid through tuition.
Nationwide, 49 States, including my home State of Wisconsin, are
spending less on higher education than they did before the great
recession. Wisconsin has seen a 20-percent decline in State spending on
higher education since 2008 while instate tuition has increased by
almost 6 percent over the same time period.
It has not always been this way, and we seem to have lost touch with
the American idea of building a path to the middle class by making a
strong investment in higher education and giving Americans a fair shot
at upward mobility.
In 1944, starting with the compact to returning soldiers from World
War II made through the GI bill, our Nation made a commitment to future
progress by investing in education. Between 1944 and 1951, 8 million
veterans received education benefits, including many former
distinguished Members of this body.
In 1958 President Dwight Eisenhower, a Republican, signed the
National Defense Education Act, providing loans for college students
and funds to encourage young people to enter teaching careers--the
precursor to our current program for student loans.
President Lyndon Johnson built upon this legacy. A cornerstone of the
Great Society was a path to the middle class through a college
education. The Higher Education Act of 1965 gave us the Federal Student
Loan Program, known today as the Stafford Loan Program, and the
Educational Opportunity Grant Program, known today as the Pell Grant
Program. This generation of Americans and lawmakers lived in trying
times. Yet they still had the foresight to make the hard choices, the
choices necessary to invest in the future--our future.
Throughout our Nation's history, the Federal Government has made
major investments in expanding access to higher education for all
people willing to work hard to pursue their dreams. Unfortunately, in
recent years we have neglected that proud legacy.
Recently, Congress lowered interest rates for new borrowers but not
for those borrowers who are stuck paying back old loans with much
higher interest rates, be they public or private. Further, for those
who are in true financial distress, Congress has made discharging loans
in bankruptcy nearly impossible, first by eliminating this option for
Federal loans in 1995 and then for private loans as well in 2005.
Tonight we are giving a voice to the debt crisis that faces millions
of American families and students. Tonight we are giving voice to a
number of solutions that can address this crisis if we work across
party lines.
I believe Congress must take action, and that is why I am proud to
join my fellow freshman colleague Senator Warren as a cosponsor in
support of the Bank on Students Emergency Loan Refinancing Act. This
legislation would allow those with outstanding student loan debt to
refinance their debt at the lower rates currently offered to new
borrowers. It is simple. It is paid for by making millionaires and
billionaires pay their fair share in taxes to give our students a fair
shot at a bright future, and it will help strengthen the economic
security of American families who are struggling with this debt.
I believe making college affordable is one of the most important
steps we can take toward rebuilding our middle class and breathing new
life into the American dream. I want to live in an America where
everyone has a fair shot at getting ahead.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Jersey.
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Mr. BOOKER. Mr. President, it is an honor to stand here with a chorus
of my colleagues speaking about an issue that goes to the core of the
idea of this country; that is, every generation will be better than the
one before. It is the idea that in this Nation we should lead globally
in enriching the lives of our citizenry.
The Presiding Officer and I talked a few seconds ago. He said he was
going home after this to put his kids to bed. I hope the Presiding
Officer doesn't mind me sharing that. I know the Presiding Officer is
going to teach his kids the same thing my parents taught me: Work hard
and play by the rules so you can go to college and try to achieve your
dreams.
When I have traveled all over the State of New Jersey--North Jersey
and South Jersey, from urban towns to suburban towns and even rural
towns--I have heard the same kind of frustration, which is the rising
costs of college. Not only that, I see more and more people who try to
take on the challenge of paying for those rising costs and find
themselves saddled with staggering debt. The facts reflect the
sentiments, frustrations, concerns, and anguish that I hear.
Today the average student graduates from college with around $29,000
in loans. That is up from an average of $27,600 in 2011 and $23,792 in
2010. In fact, right now in New Jersey 16 percent of my constituents
are carrying student debt. That is over 1 million New Jerseyans who are
weighed down by this significant financial obligation.
Let me put this in perspective because it has a ripple effect within
our economy. Take, for example, our housing. Housing is such an
important driver to economic development, and it is an important driver
to jobs. Owning a home is a dream many people in America have as well.
Well, the reduced purchasing power due to high student debt levels is
holding back people's ability to help drive our economy forward.
The housing industry, which is still recovering from a crisis, is an
example. The National Association of Realtors cited student loan debt
as a primary reason for the decline in housing purchases among first-
time buyers. Of 20 percent of first-time buyers who find it difficult
to save for a downpayment, 54 percent of first-time buyers said student
loans make it tough to save money. According to a recent survey by the
National Association of Realtors, about half of all the people polled
in a survey said student debt was a huge obstacle to buying a home.
According to the Federal Reserve of New York, from 2009 to 2012 home
ownership rates fell twice as much for 30-year-olds who had a history
of student loans than it did for those who don't.
This is a problem which is impacting families, and it is stifling
people's ability to participate and make our economy robust. It is
making job growth a challenge. It has many different layers.
What I want to focus on for the last few moments is my desire to keep
America No. 1. When it comes to educating our populous, we should be
and have been historically top in the globe, especially at the higher
education levels. When we created programs that many of my colleagues
have cited--I heard Senator Durbin speak about programs that literally
took him from a lower middle-class environment to achieving his dreams.
Accessing affordable college loans allowed him to achieve his dreams.
We created these programs because we understood that the workforce in
this Nation is essential for economic competitiveness. Indeed, in a
global knowledge-based economy, it is the knowledge of the people that
drives the economy forward. Without highly skilled workers, America
simply won't be able to compete in this new global economy. This wisdom
has been understood for decades, for generations. You educate your
workforce to the highest levels on the globe, and your economy will
lead the globe.
Well, today we are seeing challenges, and we are seeing this reality
change. Today the average price of a college degree in the United
States has climbed to $13,856. Compare that with some of our critical
global competitors. Take the UK, for example. In the UK, the average
cost is $5,288 for a higher education. Take Germany, another one of our
global competitors. German students pay a mere $933. Those competitive
economies understand that they don't want to put up barriers so their
young people can learn. They want to remove them.
The cost of college in America puts our young people at a severe
disadvantage compared to their peers around the world. It is not a
level playing field. We are asking our kids to compete globally, but we
are putting up barriers that are unique to this economy.
When the cost of college in the United States is now more than 51
percent of the median income in America--let me say that one more time.
The cost of college in America is now 51 percent of the median income
in America, while the cost of college in Germany is just 4.3 percent of
that country's median income. When the United States has one of the
highest percentages of adults--we are one of the top in the globe for
adults 55 to 64. That generation of Americans which had the kinds of
student loan programs and opportunities Senator Durbin talked about are
at the top, but only 43 percent of Americans ages 25 to 34 have a
degree. Instead of that younger group being at the top, America has
now--compared to our competitors--fallen to 16th place globally.
In other words, older Americans who benefited from a rational system
of affordable college and abundant affordable loans are leading. Madam
President, 55- to 64-year-olds are leading the globe in the percentage
of population with a college degree. The younger we are getting in our
country, the lower we are falling in our competitiveness with our
competitors in terms of the kids who have college degrees. We wonder
why that is. It is because the ability to afford college has been
getting more and more difficult.
I am encouraged by my colleagues. We should be doing everything to
encourage forthcoming generations to pursue higher education so we
don't slide further in global rankings and compromise our long-term
ability to compete. That is why I am standing here right now. That is
why I am proud to cosponsor Senator Warren's newly introduced
legislation, the Bank on Students Emergency Loan Refinancing Act, which
would allow those with outstanding student loan debt to refinance at
the lower interest rates currently offered to new borrowers. It simply
allows them to refinance loans the way you can with a mortgage and
other types of loans. This will make us more competitive.
I commend a lot of my colleagues who spoke here. I especially commend
Senator Harkin, Senator Reed, and Senator Gillibrand, who have been so
active in calling attention to this issue.
We cannot afford for the cost of obtaining a higher education to be
decades of crushing debt. It is unacceptable. The legislation we are
talking about today seeks to lighten the burden on student borrowers
and to put money back in their pockets and to help fuel our economy
but, more importantly, to help everyone understand that in this Nation
we are still doing everything possible to lead the globe in education.
There is a lot of work to do. My team is trying to focus on some
issues I saw as mayor. For example, when I was mayor we worked with
schools and financial aid counselors to help families simply fill out
these forms that are necessary to obtain aid.
The College Board estimates that 2.3 million students do not fill out
the free application for financial aid form, better known as the FAFSA
form. They don't fill it out because of its complexities. They don't
fill it out because of issues that make it difficult to even report
what is necessary. As a result, many qualified students are skipping
this process because they find it complex and burdensome. They are not
even getting into college, not even afforded that pathway to cultivate
their genius and apply it to our economy.
So much more can be done. This should be a national call to make
college as affordable in this generation as it was for past
generations. Past generations in America led the globe and drove the
top economy on Earth because of that education, but now we are raising
the wall and shutting out more of our young minds from this pathway
because of unaffordable colleges.
For individuals, a college education translates to more than just odd
job opportunities, more than just higher earnings, it is an ascent up
the economic ladder.
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The PRESIDING OFFICER. The Senator's time has expired.
Mr. BOOKER. Mr. President, I will conclude with this: In a recent
study, it was found that the United States could add $500 billion to
the gross domestic product over the next 15 years by increasing the
number of workers with postsecondary education by 20 million--more
workers, a greater economy, a more successful America, and a nation
that leads the globe. Let's do and learn from what our parents and
grandparents knew and did in this body and around the Nation.
Let's make college affordable for our citizens.
I thank the Presiding Officer and yield the floor.
The PRESIDING OFFICER. The Senator from Hawaii.
Mr. SCHATZ. Mr. President, on the Senate floor we have been focusing
on policies that give Americans a fair shot, bills that would help to
reverse the growing trend of income inequality and create more
opportunities to climb the economic ladder, the idea that if you work
hard and plays by the rules, you can do well for your family and you
can create a better opportunity for your children and their children.
Making college more affordable and reducing student loan debt is
central to these goals. In fact, I think it is the middle-class issue
of our generation.
It is hard to get ahead nowadays without a college degree, but the
cost of college is growing faster than the cost of all other consumer
goods--twice as fast as health care costs.
The growing cost of college is preventing some from getting a degree
in the first place and leaving others with unmanageable levels of debt.
This is the middle-class issue of our time.
Students have taken on more than $1 trillion in debt to cover the
cost of college. Student debt is now the fastest growing and highest
consumer debt burden behind mortgages.
This debt burden is not sustainable. Saddled with this debt, young
adults are delaying starting families, buying homes and cars, and
starting new businesses. The rate at which students are failing to
repay their loans is alarming. Over one-third of borrowers who are in
repayment are delinquent on their loans by 90 days or more. One-third
of borrowers are delinquent.
One of my constituents from Wahiawa, HI, took out a loan to help
their son go to college. The loan was for $92,000 in 2006. Today they
owe $143,000. This local resident says:
The interest compounds. It's like a loan shark, pretty
close. There's no way out. No way to pay it, ever.
We are hearing these stories far too often from many families in
Hawaii and across the country, and they need our help. A college
education is supposed to be a path to opportunity and the American
dream, not a life of debt. It is clear our current system is not
working.
The Federal Government is giving $140 billion a year in financial aid
to institutions of higher learning in Federal grants and loans. That is
good, not bad. Higher education is the straightest line for us to
develop the workforce we need and for people to move up the economic
ladder, but with that $140 billion we should be making college more
affordable for students. Instead, we are getting the opposite result
for the $140 billion.
Average Pell grant awards have increased by almost 20 percent in the
past 10 years. In that same time period, Pell grants covered 25 percent
less of the average public school's tuition and fees. We are paying
more and we are getting less. There is a growing gap between the
financial aid that is available to students and the cost of college. To
fill that gap, students are loading up on debt.
Last summer, Congress passed a bipartisan student loan compromise
that lowered the student loan interest rate for new borrowers, but
millions of student borrowers were left out of that deal and are paying
much higher rates.
I am proud to join Senator Warren in introducing the Bank on Students
Emergency Loan Refinancing Act. This bill will allow students with
outstanding student loan debt to refinance at the same low interest
rates offered to new borrowers under the bipartisan student loan
compromise.
That is fair. Students struggling with student debt deserve to get
the same deal Congress is giving to new borrowers. But when we talk
about making colleges more affordable, we need to remember that
lowering student loan interest rates is only part of the problem. It is
not just the interest; it is the principal.
We need a bold long-term plan to bring down the cost of college. That
is why I introduced the College Affordability and Innovation Act with
Senators Chris Murphy, Patty Murray, and Bernie Sanders. The bill is
about holding schools accountable to taxpayers and students. We want to
reward those schools that are focused on affordability and give
incentives for the rest to make affordability part of their mission. If
you are a college, you can have whatever mission you want, but you have
no special right to Federal funding.
Our bill says, very simply, if you receive Federal dollars, part of
your mission must be about affordability and access. There are
potentially billions of dollars that are not being used wisely.
As we invest in higher education--and we should, through student loan
subsidies and Federal financial aid--we should make sure schools are
actually fulfilling our Federal public policy goals of making college
more affordable and more accessible for all students.
Let's work together to make sure a college education is a path of
opportunity for all students and not a life of debt.
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