[Congressional Record Volume 160, Number 86 (Wednesday, June 4, 2014)]
[Senate]
[Page S3428]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. WARREN (for herself, Mr. Franken, Mr. Harkin, Mr. Reed, 
        Mr. Durbin, Ms. Baldwin, Mr. Rockefeller, Mr. Reid, Mrs. 
        Feinstein, Mrs. Boxer, Mrs. Murray, Ms. Landrieu, Ms. Stabenow, 
        Mr. Cardin, Mr. Brown, Ms. Klobuchar, Mr. Whitehouse, Mr. Udall 
        of Colorado, Mrs. Shaheen, Mrs. Hagan, Mr. Merkley, Mr. Begich, 
        Mr. Bennet, Mrs. Gillibrand, Mr. Blumenthal, Mr. Schatz, Mr. 
        Murphy, Ms. Hirono, Ms. Heitkamp, Mr. Markey, Mr. Booker, Mr. 
        Udall of New Mexico, Mr. Heinrich, Mr. Sanders, Mr. Menendez, 
        and Mr. Schumer):
  S. 2432. A bill to amend the Higher Education Act of 1965 to provide 
for the refinancing of certain Federal student loans, and for other 
purposes; read the first time.
  Ms. WARREN. Mr. President, outstanding student loans now total more 
than $1.2 trillion and millions of young people are struggling to keep 
up with their payments. But we have a chance to give those borrowers 
immediate relief by cutting the interest rates on existing student 
loans. Make no mistake--this is an emergency. Federal watchdog agencies 
such as the Federal Reserve, the Consumer Financial Protection Bureau, 
and the Treasury Department are already sounding the alarm.
  Forty million Americans are saddled with student loan debt. It is 
holding them back, and it is holding our economy back too. Crushing 
student loan debt is keeping many young people from moving out of their 
parents' homes, from saving for a downpayment, from buying homes, 
buying cars, starting small businesses, saving for retirement, or 
making the purchases that grow our economy.
  It doesn't have to be this way. Congress set artificially high 
interest rates on old student loans that generate extra money for the 
government. The GAO recently projected that just the slice of Federal 
student loans issued between 2007 and 2012 will generate $66 billion 
for the U.S. Government. Those are the kinds of profits that would make 
a Fortune 500 CEO proud.
  These young people didn't go to the mall and run up charges on a 
credit card. They worked hard and learned new skills that will benefit 
this country and help us build a stronger America. They deserve a fair 
shot at an affordable education. We can give them a fair shot by 
cutting those interest rates and cutting those government profits.
  Along with more than 30 of my colleagues, I introduced the Bank on 
Students Emergency Loan Refinancing Act to do just that. The idea is 
simple. With interest rates near historic lows, homeowners, businesses, 
and even local governments have refinanced their debts. But a graduate 
who took out an unsubsidized loan before July 1 of last year is locked 
into an interest rate of nearly 7 percent. Older loans run 8 percent, 9 
percent, 10 percent, and even higher. We need to bring those rates 
down, and we need to do it now. The Bank on Students bill would give 
student loan borrowers the opportunity to lower their interest rates on 
old loans to match the rates the government offers to new borrowers 
today. That is 3.8 percent for undergraduate loans, 5.41 percent for 
graduate loans, and 6.41 percent for PLUS loans.

  I want to be clear. These rates are still higher than what it costs 
the government to run the student loan program. The government won't be 
subsidizing student loans. In fact, the government will be making a 
profit on these loans--just a much smaller profit. And let's also be 
clear that our work is not done until we eliminate all of the profits 
from the student loan program.
  But this is a step that both Republicans and Democrats can easily 
support right now. Last year nearly every Republican in Congress in 
both the House and the Senate voted for the exact same loan rates that 
are in this legislation. If Republicans believe that 3.86 percent is 
good enough for new undergraduate borrowers, then it should be good 
enough for all the existing undergraduate borrowers. There is no reason 
on Earth to say that some kids could get a better deal than others when 
they all worked hard to do exactly what we wanted them to do--get an 
education.
  Passing this bill would have a real impact for people who are 
struggling to make it--college students, young graduates who are only 
starting to build their lives, parents who are juggling their own 
student loans and trying to figure out how they are going to pay for 
their kids' educations, and parents who guaranteed their kids' student 
loans. Student loan refinancing can save real money for millions of 
Americans, and they are voicing their support. Letters, emails, and 
phone calls are already pouring in, and petitions for the bill's 
passage have already garnered hundreds of thousands of signatures. 
Think tanks such as Demos and the Center for American Progress, student 
groups such as Generation Progress and Young Invincibles, and teachers 
groups such as the AFT and NEA have all come forward and endorsed this 
proposal.
  Today the Congressional Budget Office announced that the bill 
actually saves billions of dollars and reduces the Federal deficit. 
That is because the refinancing proposal is fully paid for by 
implementing the Buffett rule, which limits the ability of millionaires 
and billionaires to exploit tax loopholes and pay a lower tax rate than 
middle-class families.
  Later today we will introduce an updated version of this legislation 
in the hopes that we will be able to consider it on the floor of the 
Senate very soon.
  I am encouraged by the fact that some Republicans have also come 
forward to say they are open to considering a refinancing proposal. I 
want to be clear. This should not be a partisan issue. I am eager to 
work with any of my colleagues regardless of party who believe that we 
need to do something about this growing debt crisis. If they have 
issues with the proposal, if they want to suggest different offsets or 
policy changes, they should bring their ideas forward. We are ready to 
hear them.
  What we cannot do is continue to ignore this problem and hope that it 
will go away on its own. Congress made this mess by setting 
artificially high interest rates that are crushing our kids. It is 
Congress's responsibility to clean it up. Refinancing won't fix 
everything that is broken with our higher education system, but the 
need for comprehensive reform must not blind us to the urgency of 
addressing massive debt that is already crushing young people.
  This is personal for me. I grew up in an America that made it a 
priority to invest in young people, and it opened a million doors for 
me. I will keep fighting to make sure that every kid who works hard and 
plays by the rules gets a fair shot. I urge my colleagues to join me in 
supporting this bill. Student loan borrowers don't have armies of 
lobbyists to fight for them, but they have their voices and they are 
asking for our support. Let's give it to them.

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