[Congressional Record Volume 160, Number 91 (Thursday, June 12, 2014)]
[Senate]
[Pages S3637-S3639]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STUDENT LOAN DEBT
Mr. SANDERS. Madam President, yesterday we debated and voted on the
need to lower interest rates for students with college debt.
I consider the issue of the high cost of college and student
indebtedness to be one of the very serious problems facing our country,
impacting millions and millions of young people and their families.
What I did through my Web site is just ask people from Vermont and
around the country to briefly write stories about the impact of college
debt on their lives.
What I would like to do very briefly is to read some of the very
poignant stories we have received. I believe we have received now over
700 stories from people all over America who are talking about what the
student debt they have incurred is meaning to their lives.
Let me very briefly read some of the responses we have received.
Shannon Lucy, 29, is from Essex Junction, VT. She is $90,000 in debt.
She wrote:
I currently live in my boyfriend's parents' basement
because I cannot afford to pay both rent and my nearly $900
per month student loan payments. Despite working two jobs and
living rent-free I am barely making ends meet. I can't even
dream of buying a house or supporting a child--I can't even
support myself. Getting married would mean burdening someone
else with my debt so that's not financially possible either.
I thought I did everything right. I thought getting an
education was an investment in my future. But now there's not
a single day when I don't feel like I'm drowning under this
massive load of debt. And the worst part is that even though
the president is introducing student loan relief measures
because my loans are mostly privately funded there's still no
relief for me.
I wish to read a statement that I received from Brittany Holman, 29,
who is from Portland, OR, and is $200,000 in debt. She writes:
I'm scared and am desperately in need of help. I'm nearly
$200,000 in debt from student loans all because I wanted to
get an education. Was that not what I was supposed to do? I
graduated from Syracuse University in 2006 went to Japan for
two years to teach English and then came back home to a
crashed economy and a bleak job market.
Despite my two B.A. degrees from a great university, I have
to settle for underemployment in a minimum wage retail job.
Andrew Englebrecht, 22 years of age from New Lenox, IL, $80,000 in
debt, writes:
It makes me depressed. I have no hope. Nothing will ever
get better. I'm scared. I can't go get my masters because my
life has already been ruined. I ruined my parents' life. The
bank finally was willing to work with us and not take our
house; that doesn't mean we can pay the loans back either. I
can't move out of the house. I can't propose to the girl I
love. I can't live because I can't dream. I'm afraid to have
kids because I'm scared they wouldn't have a chance.
This is one from Eric Anders, 29, of Chicago, IL, $125,000 in debt.
He writes:
My law school debt is astronomical. It will keep me from
being a homeowner for a long time. I believe serious efforts
need to be made to reduce the costs of attending both college
and graduate school.
Kelly Weiner, 27, from Brooklyn, NY, is $134,000 in debt, and says:
I went to law school because I wanted to help people and
communities who are underserved by the law. . . . I am
currently paying back my loans on an income-based repayment
plan with a 7.3% interest rate which means I am not even
making a dent in my debt. . . . According to my repayment
plan I will be in my fifties before I get out of debt.
Saul Barraza, 23, of Littleton, CO, $35,000 in debt, writes:
I feel like I'm sinking further and further into debt. The
interest rate on my loans is eating me alive. I don't believe
that I've ever touched the principal on my loans. I simply
pay interest and avoid default. . . . I feel that my debt is
holding me back from being able to contribute to society. It
is a ball and chain that follows me everywhere I go
preventing me from starting the rest of my life.
Lastly, let me read from Dustin Green, 28, of Yukon, OK--$50,000 in
debt between him and his wife:
Between my wife and myself we pay over $600 a month for our
student loans. I have a good job and can barely afford these
payments along with normal bills. After graduation dealing
with each loan company was a task of its own. They do not
care if you have enough money to eat but simply to pay them
back. My wife and I are wanting to buy our first home but
with so much of our salaries going to monthly student loan
payments we can't make that step yet. We have both wondered
if the yearly income difference with a college education is
worth the extra debt.
So those are just some of the 700-plus stories that we have heard
from young people and their families all over this country about the
crushing impact that student debt is having on their lives.
We have to address this issue. We have to make college affordable for
all Americans regardless of income.
[[Page S3638]]
I hope that we can do that sooner rather than later.
Mr. SANDERS. I yield the floor, and I suggest the absence of a
quorum.
The PRESIDING OFFICER (Ms. Hirono). The clerk will call the roll.
The bill clerk proceeded to call the roll.
Ms. MURKOWSKI. Madam President, I ask unanimous consent that the
order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. MURKOWSKI. Madam President, this has been an interesting week
here in the Senate.
When we began this week, there was a great deal of attention focused
on what was happening overseas with the release of a prisoner of war
who had been in captivity for some 4 to 5 years, Sergeant Bergdahl.
Conversation moved to education, with a measure that Senator Warren
from Massachusetts had introduced. The thought was we would be
discussing education issues--the high cost of college and the burden of
college debt on our students.
Then we turned later yesterday to veterans and how we address the
real scandal we have seen within the VA in failing to provide that
level of care in a timely manner for our veterans who have served us so
honorably.
It has been kind of a fast and furious week, and I wish to take a few
minutes this afternoon to talk about my perspective on not only the
legislation that Senator Warren had put out for discussion, but,
really, the concerns so many in this country have when it comes to the
issue of student loan debt.
I am the mom of a recent college graduate. Our number two son is
going to be entering his senior year of college. So we are fully
embroiled as parents in the understanding as to what the current costs
of a college education are, what young students go through in order to
achieve their dreams of going to college and their struggles as they
then face the reality of moving into a working world, but starting off
saddled with debt that can be almost breathtaking for them.
In addition to being a mom of kids in this generation, I am also a
former commissioner of the Alaska Commission on Postsecondary
Education. This is Alaska's State agency lender. So I am coming at the
issue wearing a couple of different hats today.
I know full well people are discussing the issue of the high cost of
college and student loan debt--and not just here on the floor of the
Senate but talking about it around their kitchen tables. They are very
concerned about the cost of college and the burden the debt then places
on our young Americans.
Young people who are just starting out after college graduation have
an average debt of about $27,000. Now, some would say $27,000 is
manageable; that is about in the range if you are purchasing a new car.
But think about it. For a young person just out of college, starting to
make those initial payments, $27,000 can be a staggering amount.
Whether we talk to the young people working the phones in either a
State office or here, the young interns that I have--who are excited
about the prospects of going to college or are in the midst of college
or who have just graduated from college--some of that excitement and
that enthusiasm dims when they realize what it is they are taking on.
So this debt is daunting.
Keep in mind, that debt then assumes the means to pay it back. So
many of our young people of course cannot find a job. For the 18- to
24-year-old age bracket, the unemployment rate is twice the national
average. For those graduating with a masters or a doctorate, of course,
the debt burden is much more.
Then for the parents and those who have taken out loans to help put
their kids through college--many families also struggling. So, again,
this is something that families are talking about around their dinner
table. And I am hearing about this from parents, from high school and
college students in Alaska, and talking with my interns here. They all
say the same thing. They are all concerned. They are all concerned
about the cost of college and job training and the debt they are going
to incur and their ability then to move forward, whether it is to buy
that first car, whether it is to purchase a home, the decisions about
getting married or starting a family. The debt has an impact, and that
is absolutely a given.
I do think it is important to know we in Congress have not turned a
blind eye to this and we have been working over the years to help
address the cost. The College Cost Reduction and Access Act and the
Higher Education Opportunity Act are measures that I worked to craft
some years ago, and they address these issues in many ways. We created
income-based repayment and public service loan forgiveness. There was
Active Military loan deferment, graduate student eligibility for income
contingent repayment, interest rate reductions, Pell grant increases,
TEACH grants, automatic zero expected family contribution for low-
income families and much more.
We improved student support programs like TRIO and helped ensure
students and parents have access to the kind of information they need
to ensure they really do get top dollar for their education dollars and
also to help students then persist in college to complete that process
to earn the degree. We required counseling for federal loan borrowers
prior to the students' graduation on repayment plans, debt management,
loan forgiveness, consequences of default, tax benefits, and more. We
also required disclosure about the terms and conditions of the Federal
Family Education Loan Program. These are the FFEL loan programs before
the loans are disbursed, before repayment, and during repayment.
Recently Congress has supported pay as you earn and other programs
and just last year enacted a new interest rate structure to protect
both students and taxpayers.
Unfortunately, we haven't seen much out of the administration to make
Americans aware that these opportunities actually exist, that they are
in law. We heard a nominee for a senior policy position at the U.S.
Department of Education who tried to justify this lack of action by
saying the provisions were just enacted recently. But 7 years ago is
not recent when it comes to helping Americans understand the many loan
repayment options. Just this week we heard the President give the
Department of Education yet another 6 months to figure out how to tell
Americans about their loan repayment options. I think we can do better.
I heard just last week a young teacher who was testifying before a
Senate committee. She said she was completely unaware of the income-
based repayment program which could have saved her about $4,000.
Instead, with her unaffordably high loan payments, she basically
defaulted on her loans. So it is important that when we put measures in
place, we do make sure that education effort is there on the back end
so people understand and can take advantage of some of these
initiatives that will help to make a difference.
Obviously we do not have the Warren legislation in front of us for
consideration. I am certain that it will be a matter that will be
brought back before the Senate. I certainly would hope we would have
extended debate about what we as a Senate can be doing to help our
young people as they deal with the burden of college debt, of job
training debt, and what we can do to ensure they are well on their way
to good strong careers. But I want to raise just a couple of issues
that presented themselves with the legislation that Senator Warren had
put out on the floor, because they speak to a program in my State that
has considerable impact.
Madam President, I know that I was scheduled to speak for about 15
minutes this afternoon. I have another colleague that is on the floor.
I would ask unanimous consent for about another 5 minutes, if that is
acceptable to my colleague and to the Chair.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. MURKOWSKI. I thank the Presiding Officer, and I thank my friend
from Ohio.
First, I would like to bring up the issue of the Alaska State student
aid agency. The Alaska Commission on Postsecondary Education--or as we
call it ACPE--is funded by the Alaska Student Loan Corporation. It is a
public corporation in the State of Alaska and it is an agency that
originates Federal loans under the old Federal Family Education Loan
Program, FFEL, and for 40 years it has originated State loans. Now,
before you dismiss ACPE
[[Page S3639]]
as just another private lender, let me tell you what this agency does.
It is the Alaska agency for authorizing and investigating institutions
of higher education. They provide consumer protection for Alaskans.
They gather student data to inform policymakers so we know what
policies and practices are working and where improvement is necessary.
They manage the State's performance scholarships and education grants,
which provide both merit and need-based grants to Alaskan students for
postsecondary education. They create and manage college readiness and
job training programs and help them figure out how to afford it. What
ACPE does is promote access to and success in high quality post-
secondary education and job training for thousands of Alaskans and non-
Alaskans who are attending Alaskan schools. But they also have a
special emphasis on outreach to groups that are underrepresented in
postsecondary education.
They do such a great job for us in the State that when the late-
Senator Ted Kennedy was here, he insisted on creating the College
Access Challenge Grant Program to expand what ACPE had been doing for
all these years.
But the measure that Senator Warren has, the Bank on Students
Emergency Loan Refinancing Act, would potentially put these programs in
peril and potentially end them. It would incentivize borrowers who
borrowed their FFEL loans and their State loans through ACPE to
refinance. But because this opportunity would only be available to
borrowers in good standing on their State loans, it would leave ACPE
with only the poorest performing and lowest credit quality loans in its
portfolio, leaving behind the borrowers who are the ones the sponsors
of the bill say we really need to help so much.
The loss of the FFEL loans would be bad enough, but here is another
problem. State student financial aid loans were financed by the Alaska
Student Loan Corporation through long-term fixed rate revenue bond
issues. These have very restrictive terms with respect to paying them
off before their scheduled maturity dates. The impact on the State
agencies and the Alaskans they serve and to the corporation's bond
rating of having a large percentage of student loan volume prepaid
through this refinancing bill would be severe. The money the Treasury
would pay ACPE for those loans could not be used to pay off the bonds
early, nor can it be reinvested at anywhere near the interest rate on
the outstanding bonds. The value of the bonds exceeds $65 million. It
is not only the cost to the agency and its ability to function. Whether
the State corporation were to default or to perhaps go to the
legislature for a bailout, the consequences are not good. Either
situation would be toxic for the Alaska Student Loan Corporation in
terms of subsequently being able to issue bonds that really would be
palatable to any investor.
In addition to the risk of default or a hefty bill placed on the
State and being labeled a toxic risk to bond issuers, the combined loss
of income across both old FFEL loans and State loans could very well
leave ACPE unable to continue to perform any of the services that it
performs really quite well.
This is not the only issue I have as it relates to what we have
before us this week. We don't want our students, our young people to be
struggling when it comes to debt. We have to work together to try to
find the solutions that truly are helpful across the spectrum. One of
the problems that we noted, though, was that the bill would prohibit
Americans who have private loans from banks or State agencies, and who
are having trouble paying as agreed, to refinance to a lower rate--a
prohibition that does not extend to those who are having trouble paying
their Direct and FFEL loans. I cannot understand why we would treat
Americans differently based on the kind of debt they have. The sponsors
of the bill I think genuinely want to help struggling borrowers, but
with this provision they leave a lot of folks out in the cold. So that
is something that needs to be addressed.
According to the Center on Budget and Policy Priorities, the cost of
college is going up, but State funding for higher education, which went
down during the recession, is not rebounding. We are seeing exceptions
in Alaska and North Dakota. But according to the CBPP, Louisiana is at
the top of the list and contributes a little over $5,000 less per
student to higher education than they did prior to fiscal year 2008.
Hawaii, New Mexico, and Alabama are seeing $4,000 per student less.
Idaho, South Carolina, Massachusetts, Nevada, Connecticut, and Arizona
are in the $3,000 less per student range. The list goes on.
So when the States are unable to contribute to their public
universities and postsecondary education in general, the cost burden
then for our students too often goes up. Even when our colleges tighten
their belts and cut their internal costs, we see the costs rise.
So obviously there is a great deal to do. I know that so many of my
colleagues are committed to working to find that good solution which
works not only for students in my State but around the entire country.
We have our work cut out for us. I appreciate the efforts that many
have made. I think the discussion will continue, and I look forward to
that.
With that I yield to my colleague from Ohio, and I thank the Senator
for his indulgence of an additional 5 minutes.
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