[Congressional Record Volume 160, Number 89 (Tuesday, June 10, 2014)]
[Senate]
[Pages S3531-S3535]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STUDENT LOAN DEBT
Mr. MARKEY. Madam President, I was the first in my family to go to
college. I drove an ice cream truck to work my way through Boston
College as a commuter. I did the same thing to go to law school. I
lived at home all the
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way through college and law school in order to be able to afford to go
to college. As a result, I had to take out Federal loans like so many
millions of American students have to do today. But here is the thing.
If the owner of the ice cream truck company I worked for wanted to
refinance the loan he had for the trucking fleet, he could do that. If
my parents wanted to refinance the mortgage on their house, they could
do that. But if I wanted to refinance my student loans as would every
single student today, I was out of luck, and that is not right, that is
not fair, and that needs to change.
In Massachusetts, as the Presiding Officer knows better than anyone,
we recognize that education is a ladder of opportunity that allows
every child to maximize their God-given abilities. It is the best path
to middle class success and economic opportunity. The big dreams of
college should never be thwarted by the small print of student loan
agreements. The economic opportunities that students have because they
graduate should not be accompanied by the hopelessness from
overwhelming debt--almost like the mythical Sisyphus with a boulder on
his shoulders, trying to go up the side of a mountain. That is how
students feel with their student debt as they graduate from colleges
and universities across this country. So in the same way that mortgage
refinancing helps mortgage holders who are underwater, students
drowning in debt should benefit from refinancing their student loans at
a lower rate.
Today more than 70 percent of America's students borrow money to
attend college. The average student graduates from college owing nearly
$30,000. Americans today owe almost $1.2 trillion in student loans,
more than is owed on credit cards. Almost 1 million people in
Massachusetts currently owe more than $24 billion in student debt.
Thirty percent of young borrowers nationwide are unable to keep up with
their payments and are in default, forbearance or deferment. That kind
of debt makes it difficult to start a family, buy a home or save for
retirement. Reports show that high student loan debt deters our
promising minds from enrolling in graduate programs. That means fewer
highly skilled workers, which harms our economy now and makes us less
competitive in the world economy in the future.
There is a way to make it easier for those of us who have student
loan debts and to put more money in their pockets every single month.
That is to listen to the wisdom of our Presiding Officer, to make sure
that people here in this Chamber and across our country listen to this
guiding light that you are creating for our country to be able to move
from this present world where debt so saddles young people that they
really cannot ever plan to realize all of their dreams, to a new vision
of what might be possible in lowering this burden on young people
across our country.
Last year the Congress passed legislation that lowered Federal
student loan interest rates for new borrowers but did nothing for
existing borrowers. So today interest rates for new borrowers are just
under 4 percent while rates for older borrowers are around 7 percent
for recent undergraduates and even higher for some older borrowers. The
bill which you have introduced as the senior Senator from Massachusetts
simply allows 25 million eligible student loan borrowers the option of
refinancing down to the rates offered to new Federal student loan
borrowers this year.
The bill allows eligible student loan borrowers to refinance their
private loans into the Federal program. Many parents cosigned the
private loans for their children and are on the hook if their children
default on these loans. Your legislation will save existing student
loan borrowers thousands of dollars to help them get ahead, not fall
behind. This money can be used to help pay for the downpayment on a new
home, to start a new business or to start a family. This is one more
way to give Americans a fair shot at the American dream. So we thank
you for your leadership on this issue. We thank you for laying out a
pathway to make it a slightly easier place for young people to be as
they leave college, as they have this debt on their shoulders.
When I was in school the interest rate was 3 percent. Those loans
were called national defense student loans. Emblazoned over the Boston
Public Library it reads: ``The education of its people is the best
defense of a nation.'' That is what it says across the Boston Public
Library. That is what we have to once again understand, that the first
generation that was the beneficiary had 3 percent loans. This
generation--in a much more wealthy country--has loans at 6, 7, 8, 9
percent and more, and that just makes it very difficult for them to
maximize their God-given abilities in the same way that the Members of
the Senate were able to maximize theirs.
We have a responsibility to this generation to go back to that
original message, to go back to that incredible plan that was put
together after World War II to finally democratize access to education
for every family, for every child who wanted to work towards improving
themselves. Those national defense student loans understood that the
best defense of a Nation is the education of its people. That is how we
preserve order and liberty within our society, and that is what your
proposal does.
By using the Buffett rule, by using the offset which says to
billionaires and millionaires in our country that you are just going to
pay the same taxes as the middle class, well, then we finance something
that is really critical. We finance the dreams and the hopes of young
people in our country, so that the debt they have to shoulder after
they leave college is not so burdensome that they never really can
fully realize their dreams.
So I ask all my colleagues to support Senator Warren's legislation. I
think it is going to be without question at the top of the list of the
most important work we do in this Chamber this year, and I call upon my
colleagues on the other side of the aisle to respond in the kind of
bipartisan way that the American people want, those 40 million families
that need relief from this oppressive burden of student loan debt.
With that, I thank the Presiding Officer for her leadership.
I yield back the remainder of my time, and I note the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. BLUMENTHAL. Madam President, I ask unanimous consent that the
order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BLUMENTHAL. Madam President, tomorrow the Senate has a historic
and magnificent opportunity to increase everybody's fair shot at the
American dream--everyone's fair shot at a college education that
enables and opens the American dream to people who come from families
where college was an unachievable aspiration. I know about those
families because I come from one of them. I am the first man in my
family to have a college education, not to mention the opportunity to
go to law school.
There are a couple of hard, practical facts, apart from all the
rhetoric about the American dream. The fact is today college education
is a major--maybe the most important determinant--of income. It is one
of the major determinants of employment. The employment rate for
college graduates is much higher than for those who lack it. In fact,
the unemployment rates for college graduates are half or less than what
they are for those who lack that education.
College education--in fact, education in general--is the single most
important instrument of social mobility in this country. It is a way
for people to reach the middle class or for families to stay in the
middle class. Right now, the middle class is squeezed in every
direction by so many different economic factors and pressures, and the
cost of a college education is one of the most pressing of them.
So we have the opportunity tomorrow to enable countless people to
take advantage of the American dream in a very hardheaded, practical
way by enabling all college graduates or others who have student loans
to reduce the charges--the interest rates--on those loans to a lower
rate that is the lowest rate acceptable.
I thank the Presiding Officer for her leadership in championing this
cause before it reached the Senate floor--way before it became the
fashionable and
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popular issue it has become. I thank also the President of the United
States who, by Executive action, has helped to ease the burden of those
college loans to thousands of current student debtholders. He has
recognized the importance of reducing that burden by expanding a
program that was passed by Congress in 2010, tying monthly student debt
payments to a portion of the debtholder's discretionary income. He has
expanded that program to include many of those debtholders before the
date that it is currently operative, and I thank him for that step, but
it is a minor step compared to what we have the opportunity to do
tomorrow in realizing an opening to the American dream for many
students who have already been through education and now carry interest
rates on their debt of 8, 10, 11 percent. It is an opportunity not only
for them to reduce that interest rate but also for the economy to take
advantage of their purchasing power that will be unleashed--consumer
demands that will be enlarged--because people are more likely to buy
homes, start families, begin businesses, become entrepreneurs, be
innovators and inventors, who right now are making career choices
because they are saddled with debt that forces them to pay interest
rates much higher than current students do.
It is not a forgiveness program. They will continue to pay the
principal on that debt. It is not a free ride or a handout. They simply
get the benefit of the interest rates that our friends across the aisle
thought was absolutely right, just months ago, when applied to the
existing program.
So this opportunity is a commonsense, simple measure to provide some
relief to people struggling under a debt load that is suffocating to
them, their futures, their families, and our economy's future.
I believe sincerely there are equally important measures that
eventually we need to take in this body, in this Congress, in this
Nation, to make college more affordable. The costs of tuition and
college expenses need to be brought down. The grants we provide--so-
called Pell grants--and scholarships that come from other sources need
to be expanded and increased. The opportunities for people who incur
debt to work down or work off that debt through public service can be
dramatically and drastically enhanced for their benefit and for the
benefit of our communities and country that will stand to be
forthcoming by their policing, their teaching, their firefighting,
their public service that can be, in effect, rewarded and incentivized
by enabling them to work down or work off those debts.
These programs are a moral imperative, as is affording the
opportunity of students to discharge in bankruptcy those debts when
they simply cannot fulfill them, but this idea of giving everybody the
benefit of the lowest possible interest rates that will be part of the
bill we vote on tomorrow is a solid and sound and vitally important
beginning.
We enable homeowners to refinance and car buyers to refinance and
many other kinds of debtholders to refinance but not student loans.
That is a discrimination, maybe not unlawful but still a distinction
that makes no sense either from the standpoint of our economy or the
interests of the debtors. So I hope we will give them a fair shot but
also impose a basic and fundamental tenet, an ethos of fairness: If it
is good enough for home loans and car loans, why not for student loans?
We should not be adopting policies that encourage people to give up
on their dreams. In fact, we ought to be doing just the opposite,
making young people feel their dreams are within reach.
I will close by saying to my colleagues that in the last months I
have been listening around the State of Connecticut--at roundtables and
meetings--to both high school students and college students about this
issue of college affordability. What is so inspiring to me, in the
meetings I have had--in places such as Ansonia, Windham, and
Bridgeport--is the drive and determination of our students to embark on
a college education. They know its value, its realistic value, its
cost, and they want to do it because they know it is a way up. They are
gaining and they are giving back.
But many of them have to make compromises. They have been admitted to
schools. Their first choice is a first-rate school, but they cannot put
together the package financially that will enable them to go. It is
beyond reach financially, even as it is within their grasp
intellectually. So they may compromise--maybe the first of other
compromises that they will make throughout their lives, as they pursue
careers, as they have to make hard choices. But at that age, those
compromises should not be driven simply by financial imperatives. They
should have the best education that is possible for them, and this
country should make it available, not just for their sake but for all
of ours.
I have been listening to college students who are leaving--at the
commencement addresses I have given at law schools, as well as
colleges--listening to students talk about their futures as well,
futures that will be compromised because of the debt they have, an
average of $27,000 to $30,000 in the State of Connecticut alone, and it
is similar in many States around the country and the reason we have
$1.2 trillion in debt overall today.
They will compromise in doing a job that may be more lucrative but
less rewarding, less so to them and less so to our economy, less so to
our society--a lesser way of earning a living in terms of its impact in
contributing to our social fabric, qualify of life. They may not be
teaching, they may not be policing, they may not be doing things that
give back to our society because they need the income, the higher
income to pay back that debt.
So those compromises affect all of us as well. They are done because
they simply cannot afford either to go to the school of their first
choice or the career of their first choice, but the government can
afford to give them a lower interest rate. We know the government can
do so because right now it is profiting off the backs of students in
billions and billions of dollars. The estimates range, over a 5-year
period, from $66 billion to other amounts. We know the government will
continue to profit even at lower interest rates from the Student Loan
Program.
So let's have less profit to the government, better well-being in our
communities, and fairer treatment for our students--a fair shot for
them and their families and for all who have as their objective simply
to better their lives and gain a fair shot at the American dream.
I thank the Presiding Officer.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. CASEY. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CASEY. Madam President, I rise to speak about a challenge that is
confronting our middle-class families all across my home State of
Pennsylvania and across the country. The Presiding Officer knows this
issue well and has worked tirelessly to enact measures of public policy
to confront this problem. We have an opportunity now with her
leadership, as well as other leaders in the Senate, to work together on
what I think is the kind of legislation that will help those middle-
income families.
The Bank on Students Emergency Refinancing Act, of which I am a proud
cosponsor, is an opportunity for the Senate, folks in both parties who
hear from middle-class families all the time about a range of issues. I
doubt there is any issue we hear about more often than the cost of
higher education. So I wish--as I am sure many other Members of this
body do--to ensure that every student in our States, and for me every
student in Pennsylvania, gets something very fundamental, a fair shot
to attend college and reach their full potential.
The bill we are considering would help students who have private and
public loans in good standing from before July 1 of 2013. It allows
them the chance to refinance those loans at a 3.6 percent interest
level, the level that was agreed to in last summer's bipartisan student
loan compromise. This compromise, as we might remember, passed the
Senate overwhelmingly, 81 to 18.
With interest rates near record lows, homeowners, businesses, and
even local
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governments with good credit regularly can refinance their debts, but
few if any students have that same option. Why should more Americans
not be helped by the opportunity to pay a lower interest rate?
That is a question I think we all ask tonight and in the days we are
debating this issue. More than 40 million Americans owe almost $1.2
trillion in student loan debt, much more than is owed, for example, on
credit cards. According to the Institute for College Access & Success,
as of the year 2012 Pennsylvania ranked third in the Nation in the
highest average student debt indicated--nearly $32,000 per student is
the number in Pennsylvania--and 70 percent of graduates in the
Commonwealth of Pennsylvania leave college with debt, the fourth
highest of any State in the Union. Too many young Americans cannot get
ahead because they cannot get out from under the burden of student
debt.
Because of their debt, many Americans are unable to buy a home, save
for retirement, start a business or even start a family. This hurts the
economy terribly and it makes the American dream so much harder for
young Americans to reach. At an 18-year low, the rate of home ownership
among young people has been cut in half since 2001. A recordbreaking
number of young adults are still living in their parents' homes.
This high level of student debt makes it harder for entrepreneurs to
start new businesses and create jobs. Entrepreneurial activity among
20- to 34-year-olds is at the lowest level in 20 years. We know this
bill can help at least 1.2 million Pennsylvanians and more than 25
million across the Nation, according to the Department of Education.
Based on calculations from the Congressional Research Service, a
typical Pennsylvanian who owed the State average, nearly $32,000 in
student debt, would be able to save more than $4,000 over the life of
their loan. This bill would not only save millions for Americans, but
the bill itself would save the Federal Government more than $14 billion
over 10 years, based on figures from the Congressional Budget Office.
A college education, we all know, is the surest path to middle-class
success and is still the best investment a student can make. Getting a
college degree opens the door to job opportunities for the average
worker. That means $1 million more in earnings over a lifetime compared
to those who only go as high as a high school diploma.
So college education is indeed tied directly to the economic success
of young people across the country. This bill is a step in the right
direction and would do much to tackle the problem of student loan debt.
However, Congress and the Nation still have a lot of work to do to make
college affordable for all of our children. What we are talking about
is something very fundamental. All we are asking is that the House and
the Senate, both parties, come together to give students and their
families just a fair shot.
That is all they are asking for. They are basically saying to us,
especially middle-class families are saying to us: You folks in
Washington talk all the time about the middle class, but you need to
act on our behalf. Unfortunately, they do not see enough action coming
out of Washington that directly impacts their lives, that directly has
an impact on their economic fortune, their economic future.
This is one of those rare opportunities with one vote, with one bill
we can have a substantial positive impact on the lives of literally
millions of Americans as soon as the bill is enacted into law.
I would venture to say that when you talk to any middle-class family,
if student loans and the cost of college is not the No. 1 issue they
mention, it is certainly in the top two or three. For most middle-class
families it is No. 1. Yet they have not seen much in the way of direct
action that we can take in Washington to provide a measure of relief--
not a magic wand, not eliminating all the pressure and all the worries
that people have when it comes to affording college.
This is one bill that can provide some relief, some needed relief,
especially when young people are trying to buy a home, invest in their
families, start a business, and begin their life after higher
education. I ask that we all come together on this legislation and
provide a measure of relief to middle-class families and, by virtue of
doing that, a badly needed injection into our economy.
I yield the floor.
Mr. LEAHY. Madam President, tomorrow, the Senate will vote to proceed
to a bill that I am proud to cosponsor, to allow students to refinance
their student loans at lower interest rates. We must take this
commonsense approach to allow those with student loans to take
advantage of historically low interest rates.
It should go without saying that student loan costs should not rise
so high that students cannot repay. Yet in recent years, average
college tuition rates have climbed faster than inflation, far outpacing
student financial aid. Since 1985, the cost of attending college has
risen by 559 percent, and last school year alone, instate tuition and
fees at public 4-year institutions were on average 8.3 percent higher
than in the previous year.
Debt caused by student loans has surpassed the level of credit card
debt in the United States. In Vermont, there are 99,000 people with
Federal student loans representing more than $2 billion in debt. This
not only affects those borrowers and their families, but it has a
devastating effect on the economy as a whole--particularly in the
housing market. Student loan debt is preventing many would-be first-
time home buyers from saving enough to afford a down payment. High
student loan debt, combined with the housing lending climate, has left
many unable to secure a mortgage. Experts are worried that the high
level of student loan debt is one of the reasons the housing market has
been slow to recover.
This bill would help those suffering with the burden of student loan
debt by offering them the opportunity to refinance at lower interest
rates. We offer refinancing options to businesses, homeowners, and even
local governments. These options should be available to students, too.
The legislation would help roughly 25 million borrowers keep up with
their student loan payments by allowing them to refinance at the same
rates that new borrowers receive. Combined with the Executive action
announced this week by President Obama to give more students the
ability to cap monthly payments, this bill is an important step toward
relieving the student debt burden so many Americans face.
I regularly hear from Vermonters about their struggles to afford a
college education, and their concerns about student loan debt after
they graduate. Many students are forced to take on significant debt,
and too often are not able to complete college because of soaring
costs. For those students who do go on to graduate, record student loan
debt has made getting ahead in today's job market an insurmountable
challenge for some students. Students who might otherwise choose to
work in the public sector or other historically lower paying jobs like
primary health care or teaching professions must make professional
choices based solely on their level of debt. Unfortunately, along with
the pressure from student loan debt has come an increase in default
rates among borrowers, which will affect a student's financial
stability for decades.
I have always firmly believed in the importance of a college
education. I was the first Leahy in my family to graduate from college.
Every young person should have the chance to pursue higher education.
Education is a path out of poverty, a road to personal growth, and an
access ramp to professional accomplishment and economic security.
Everyone wins when access to education expands.
Each opportunity for a young American to earn a college education is
also an opportunity for the Nation's future. Our country's ability to
compete in the global marketplace in the future depends on our
children's ability to finance their education. This does not need to be
a partisan issue and should be one where we can find widespread
agreement.
I urge every Senator to help us move ahead to support our students,
their futures, and our country's future. This issue deserves to be
debated in the Senate.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
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The assistant bill clerk proceeded to call the roll.
Mr. CASEY. 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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