[Congressional Record Volume 162, Number 140 (Thursday, September 15, 2016)]
[Senate]
[Pages S5845-S5847]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. DURBIN (for himself and Mr. Kirk):
S. 3345. A bill to designate the facility of the United States Postal
Service located at 1101 Davis Street in Evanston, Illinois, as the
``Abner J. Mikva Post Office Building''; to the Committee on Homeland
Security and Governmental Affairs.
Mr. DURBIN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3345
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. ABNER J. MIKVA POST OFFICE BUILDING.
(a) Designation.--The facility of the United States Postal
Service located at 1101 Davis Street in Evanston, Illinois,
shall be known and designated as the ``Abner J. Mikva Post
Office Building''.
(b) References.--Any reference in a law, map, regulation,
document, paper, or other record of the United States to the
facility referred to in subsection (a) shall be deemed to be
a reference to the ``Abner J. Mikva Post Office Building''.
______
By Mr. DURBIN (for himself, Mr. Franken, and Mr. Reed):
S. 3347. A bill to amend the Truth in Lending Act and the Higher
Education Act of 1965 to require certain creditors to obtain
certifications from institutions of higher education, and for other
purposes; to the Committee on Banking, Housing, and Urban Affairs.
Mr. DURBIN. Mr. President, this has been a big week in Chicago and
the Midwest, in fact, across the country, as some 35,000 students who
attended ITT Tech have finally come to realize that school is closing
and many of them have to assess now what their lives will be from this
point forward.
In my hometown of Springfield, IL, there was a large sign in the
local shopping mall ``ITT Tech,'' and I used to drive by and look at
it, thinking: I know how this story is going to end, and it will not be
good.
It turns out some 750 students signed up at this for-profit college
in the State of Illinois and, as I mentioned, many outside the State,
and many of them were fleeced, literally.
In this situation, they offered them an associate's degree at the ITT
Tech campus at the White Oaks Mall in Springfield. There were several
courses, one in communications, another one in computers.
The tuition charged at ITT Tech for a 2-year associate's degree was
$47,000. If those same students got in their cars and drove 15 minutes
away, they would have been at Lincoln Land Community College. The same
course is offered not for $47,000 for a 2-year career degree but less
than $7,000.
These students did not know better. They thought they were in good
hands. They signed up for these loans, and now the school has
disappeared. It disappeared after more than a dozen attorneys general
around the United States started suing ITT Tech for its practices:
recruiting students who were not ready for college, misleading them
about the courses that were being offered, and overcharging them on
their loans. It is currently being sued by the Consumer Financial
Protection Bureau and the Securities and Exchange Commission. This is
not the first major for-profit college to go down. Corinthian was an
early casualty. I am sorry to say that I think others will follow.
It bears repeating that when we take a look at this industry, the
for-profit college industry, we are looking at the most heavily
subsidized private for-profit companies in the United States of
America. For many of these companies, over 90 percent of their revenue
sources come from the Federal Treasury in the form of Pell grants and
direct government loans. They take the money from the government
through the students. The students end up with the debt to pay off and
many times, if they can stick with the course, a worthless diploma or
certificate.
Why are we letting this happen? Why are we letting American families
work hard to send their kids to college, only to be exploited by
schools that are thinly veiled machines for taking money away from
these poor students and saddling them with debt? Why aren't we speaking
out? Well, sadly, the for-profit college and university industry in
America has friends in high places. When the time comes, they hire some
of the most effective lobbyists in Washington on both political sides
to push for their agenda and to keep them in business. It is
understandable. They take millions of dollars out of these operations.
They end up with salaries for CEOs that are higher for their so-called
university presidents than any university president in America. We let
it happen. The Congress lets it happen. The government lets it happen.
It is time for a new day and some new thinking. The 2016-2017 school
year has begun. Millions of students across the country are walking
onto college campuses, and they are excited about their opportunities.
Many of these students know they are going to have to take out loans to
finance their education and will end up owing the government thousands
of dollars.
We know that student debt is now larger than credit card debt. It is
over $1 trillion. That means that students and their families across
America are deeply indebted for higher education. If you are getting a
good education out of it, something that really changes your life for
the better and gives you new opportunities, the argument can be made.
But, sadly, in many cases students don't receive the education they
were promised. And at the end of the day whether these students owe
money to the government or to private lenders, makes a big difference.
A lot of students--19, 20 years old--really don't understand the
magnitude of the debt they are incurring. We know that two-thirds of
students who take out private education loans really don't understand
the terms of those loans, the interest rates of those loans, and how
they compare with government loans. They don't understand that in many
cases, private student loans are significantly more expensive and
riskier.
Federal student loans have fixed, affordable interest rates. They
have a variety of consumer protections built into them: forbearance in
times of economic difficulty; manageable repayment options, such as
income-based repayment plans which calculate your monthly student loan
payment based on your income.
On the other hand, private student loans don't have these protections
and offer interest rates that are some of the highest in the land, up
to 18 percent. These private loans also don't include repayment options
that Federal loans do. I have heard from many private education loan
borrowers that their lender is unwilling to work with them when it
comes to alternative repayment plans. They are harassed by collection
agencies night and day when they owe these private student loans. In
many cases, private lenders are more focused on their own bottom line
than the students' welfare.
This past summer, the Consumer Financial Protection Bureau took
action against Wells Fargo Bank--one of the
[[Page S5846]]
largest private student lenders--for illegal student loan servicing
practices. Wells Fargo charged borrowers illegal fees, failed to
provide borrowers with accurate loan information, and failed to correct
inaccurate credit reports. Upon being caught, Wells Fargo was fined
$3.6 million and is required to refund borrowers who were illegally
charged.
While I commend the Consumer Financial Protection Bureau for their
work to hold private student lenders accountable, there are steps we in
Congress should take to make sure students have a fighting chance.
Today, Senators Franken, Reed, and I will introduce the Know Before
You Owe Private Education Loan Act of 2016. This legislation requires
school certification before a student can take out a private loan.
There are certain steps the school has to take before certifying a
loan. The prospective borrower's school has to confirm the student's
enrollment status, cost of attendance, and estimated Federal financial
aid assistance before certifying. The school must also notify students
of the amount of unused Federal student aid for which they are still
eligible. Think about that. Some of these schools are luring students
into more expensive, terrible private loans when the students are still
eligible for lower interest rates and better terms through the Federal
Government. I have heard too many stories of for-profit colleges
steering students into these private institutional loans. This bill
will help stop that.
The bill will also ensure that students are given information about
the differences in terms and repayment options. For students who still
decide to get a private student loan, the bill requires private lenders
to send the student borrowers quarterly updates on their balance,
accrued interest, and capitalized interest.
The bill also requires private lenders to annually report the number
of students taking out private loans, the amount of the loans, and the
interest rates--all of these to be reported to the Consumer Financial
Protection Bureau. Currently, there is little information publicly
available about private student loans. Increasing the amount of
available information will help policymakers and enforcement agencies
more effectively protect students and their families.
Here are a few of the organizations supporting our bill: the
Institute for College Access and Success, National Association for
College Admission Counseling, National Consumer Law Center, Consumer
Action, National Association of Student Financial Aid Administrators,
National Association of Consumer Advocates, Consumers Union, the
American Association of University Women, the American Federation of
Teachers.
Loan certification for private education loans could keep many
students from taking on unnecessary debt or unknowingly giving up the
benefits and protections of Federal student loans. It is an important
part of making college more affordable. I thank Senators Franken and
Jack Reed for standing with me in this effort.
I sincerely hope that this Congress, which is now coming to a close
before the election, will take up this question of student loans when
we return after the election. I know we only have a few weeks, but if
you ask working families across America what concerns them greatly, it
is the amount of debt kids are incurring to go to college. In some
families, mom and dad have never been to college, and sending their son
or daughter off to a university is a dream come true. It can turn into
a nightmare if they end up at for-profit colleges and universities.
I put on the Record the last time I spoke--and I will put it on
again--the basic numbers to know about the for-profit college and
university industry. Ten percent of all college students attend these
schools, schools such as the University of Phoenix, DeVry, Kaplan, and
Rasmussen. You know the names. Ten percent of the students end up in
these schools, but when it comes to student loan defaults, 40 percent
of the student loan defaults are students from for-profit colleges and
universities. Students are dramatically overcharged for tuition. They
are put into courses that are worthless, and they end up with maybe a
certificate or a diploma that cannot even land them a job.
Another statistic that I think is shameful--and it really should be a
reminder to Members of the Senate of our responsibility--the Department
of Education analyzed programs at for-profit colleges and found that 72
percent of for-profit college graduates, on average, make less money
than high school dropouts--72 percent. After all that time, all that
debt, all those promises, they make less money than if they dropped out
of high school. How can we continue to subsidize this industry after
what we know about their performance? We need to hold them to higher
standards.
In the meantime, let's find a way to protect students and working
families who are trying to realize the American dream, make this a
better nation, and provide a better life for themselves and their
families.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3347
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Know Before You Owe Private
Education Loan Act of 2016''.
SEC. 2. AMENDMENTS TO THE TRUTH IN LENDING ACT.
(a) In General.--Section 128(e) of the Truth in Lending Act
(15 U.S.C. 1638(e)) is amended--
(1) by striking paragraph (3) and inserting the following:
``(3) Institutional certification required.--
``(A) In general.--Except as provided in subparagraph (B),
before a creditor may issue any funds with respect to an
extension of credit described in this subsection, the
creditor shall obtain from the relevant institution of higher
education where such loan is to be used for a student, such
institution's certification of--
``(i) the enrollment status of the student;
``(ii) the student's cost of attendance at the institution
as determined by the institution under part F of title IV of
the Higher Education Act of 1965; and
``(iii) the difference between--
``(I) such cost of attendance; and
``(II) the student's estimated financial assistance,
including such assistance received under title IV of the
Higher Education Act of 1965 and other financial assistance
known to the institution, as applicable.
``(B) Exception.--Notwithstanding subparagraph (A), a
creditor may issue funds with respect to an extension of
credit described in this subsection without obtaining from
the relevant institution of higher education such
institution's certification if such institution fails to
provide within 15 business days of the creditor's request for
such certification--
``(i) the requested certification; or
``(ii) notification that the institution has received the
request for certification and will need additional time to
comply with the certification request.
``(C) Loans disbursed without certification.--If a creditor
issues funds without obtaining a certification, as described
in subparagraph (B), such creditor shall report the issuance
of such funds in a manner determined by the Director of the
Bureau of Consumer Financial Protection.'';
(2) by redesignating paragraphs (9), (10), and (11) as
paragraphs (10), (11), and (12), respectively; and
(3) by inserting after paragraph (8) the following:
``(9) Provision of information.--
``(A) Provision of information to students.--
``(i) Loan statement.--A creditor that issues any funds
with respect to an extension of credit described in this
subsection shall send loan statements, where such loan is to
be used for a student, to borrowers of such funds not less
than once every 3 months during the time that such student is
enrolled at an institution of higher education.
``(ii) Contents of loan statement.--Each statement
described in clause (i) shall--
``(I) report the borrower's total remaining debt to the
creditor, including accrued but unpaid interest and
capitalized interest;
``(II) report any debt increases since the last statement;
and
``(III) list the current interest rate for each loan.
``(B) Notification of loans disbursed without
certification.--On or before the date a creditor issues any
funds with respect to an extension of credit described in
this subsection, the creditor shall notify the relevant
institution of higher education, in writing, of the amount of
the extension of credit and the student on whose behalf
credit is extended. The form of such written notification
shall be subject to the regulations of the Bureau.
``(C) Annual report.--A creditor that issues funds with
respect to an extension of credit described in this
subsection shall prepare and submit an annual report to the
Bureau containing the required information about private
student loans to be determined
[[Page S5847]]
by the Bureau, in consultation with the Secretary of
Education.''.
(b) Definition of Private Education Loan.--Section
140(a)(7)(A) of the Truth in Lending Act (15 U.S.C.
1650(a)(7)(A)) is amended--
(1) by redesignating clause (ii) as clause (iii);
(2) in clause (i), by striking ``and'' after the semicolon;
and
(3) by adding after clause (i) the following:
``(ii) is not made, insured, or guaranteed under title VII
or title VIII of the Public Health Service Act (42 U.S.C. 292
et seq. and 296 et seq.); and''.
(c) Regulations.--Not later than 365 days after the date of
enactment of this Act, the Bureau of Consumer Financial
Protection shall issue regulations in final form to implement
paragraphs (3) and (9) of section 128(e) of the Truth in
Lending Act (15 U.S.C. 1638(e)), as amended by subsection
(a). Such regulations shall become effective not later than 6
months after their date of issuance.
SEC. 3. AMENDMENT TO THE HIGHER EDUCATION ACT OF 1965.
(a) Amendment to the Higher Education Act of 1965.--Section
487(a) of the Higher Education Act of 1965 (20 U.S.C.
1094(a)) is amended by striking paragraph (28) and inserting
the following:
``(28)(A) The institution shall--
``(i) upon the request of a private educational lender,
acting in connection with an application initiated by a
borrower for a private education loan in accordance with
section 128(e)(3) of the Truth in Lending Act, provide
certification to such private educational lender--
``(I) that the student who initiated the application for
the private education loan, or on whose behalf the
application was initiated, is enrolled or is scheduled to
enroll at the institution;
``(II) of such student's cost of attendance at the
institution as determined under part F of this title; and
``(III) of the difference between--
``(aa) the cost of attendance at the institution; and
``(bb) the student's estimated financial assistance
received under this title and other assistance known to the
institution, as applicable; and
``(ii) provide the certification described in clause (i),
or notify the creditor that the institution has received the
request for certification and will need additional time to
comply with the certification request--
``(I) within 15 business days of receipt of such
certification request; and
``(II) only after the institution has completed the
activities described in subparagraph (B).
``(B) The institution shall, upon receipt of a
certification request described in subparagraph (A)(i), and
prior to providing such certification--
``(i) determine whether the student who initiated the
application for the private education loan, or on whose
behalf the application was initiated, has applied for and
exhausted the Federal financial assistance available to such
student under this title and inform the student accordingly;
and
``(ii) provide the borrower whose loan application has
prompted the certification request by a private education
lender, as described in subparagraph (A)(i), with the
following information and disclosures:
``(I) The amount of additional Federal student assistance
for which the borrower is eligible and the potential
advantages of Federal loans under this title, including
disclosure of the fixed interest rates, deferments, flexible
repayment options, loan forgiveness programs, and additional
protections, and the higher student loan limits for dependent
students whose parents are not eligible for a Federal Direct
PLUS Loan.
``(II) The borrower's ability to select a private
educational lender of the borrower's choice.
``(III) The impact of a proposed private education loan on
the borrower's potential eligibility for other financial
assistance, including Federal financial assistance under this
title.
``(IV) The borrower's right to accept or reject a private
education loan within the 30-day period following a private
educational lender's approval of a borrower's application and
about a borrower's 3-day right to cancel period.
``(C) For purposes of this paragraph, the terms `private
educational lender' and `private education loan' have the
meanings given such terms in section 140 of the Truth in
Lending Act (15 U.S.C. 1650).''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the effective date of the regulations
described in section 2(c).
SEC. 4. REPORT.
Not later than 24 months after the issuance of regulations
under section 2(c), the Director of the Bureau of Consumer
Financial Protection and the Secretary of Education shall
jointly submit to Congress a report on the compliance of
institutions of higher education and private educational
lenders with section 128(e)(3) of the Truth in Lending Act
(15 U.S.C. 1638(e)), as amended by section 2, and section
487(a)(28) of the Higher Education Act of 1965 (20 U.S.C.
1094(a)), as amended by section 3. Such report shall include
information about the degree to which specific institutions
utilize certifications in effectively encouraging the
exhaustion of Federal student loan eligibility and lowering
student private education loan debt.
______
By Mr. REED (for himself and Ms. Baldwin):
S. 3349. A bill to amend the Carl D. Perkins Career and Technical
Education Act of 2006 to improve career and technical education
opportunities for adult learners, and for other purposes; to the
Committee on Health, Education, Labor, and Pensions.
Mr. REED. Mr. President, I am proud to introduce the Career and
Technical Education for Adult Learners or the CTE for All Act with my
colleague, Senator Baldwin.
Our legislation addresses the critical need to expand educational
opportunities for working adults with low academic skills. A Department
of Education update of the Organisation for Economic Co-operation and
Development, OECD, 2013 Survey of Adult Skills confirms that a
significant number of working adults in the United States have low
literacy, numeracy, and digital problem solving skills. Specifically,
14 percent have low literacy skills; 23 percent have low numeracy
skills; and 62 percent have low digital problem solving skills.
Moreover, the skills gap has no age barrier as half of low skilled
working adults are under the age of 45.
Our ability to accelerate the economic momentum we have seen in the
latest income data from the U.S. Census Bureau will depend, in large
part, on our commitment to providing education and training
opportunities to low-skilled adults. These workers are concentrated in
fields such as construction, health care, manufacturing, and
hospitality. Expanding career and technical education opportunities to
these workers could enhance their career opportunities and strengthen
their earning potential, fueling economic productivity and growth for
the future. Unfortunately, according to the U.S. Department of
Education, roughly half of low-skilled workers are not engaged in
formal or non-formal learning opportunities. The CTE for All Act aims
to change that by ensuring that there are pathways for adult learners
in career and technical education programs.
Specifically, our legislation will ensure that programs funded under
the Carl D. Perkins Career and Technical Education Act are aligned with
adult education programs and industry sector partnerships authorized
under the Workforce Innovation and Opportunity Act. The CTE for All Act
will require that the state director for adult education is consulted
in the development of the statewide plan for career and technical
education. The bill adds low-skilled adults to the special populations
to be served in career and technical education programs and will allow
states to report separate performance indicators for adult career and
technical education students. The legislation would also allow adult
education providers that offer integrated education and training
programs to receive career and technical education funding.
Additionally, the legislation encourages career and technical education
programs to include work experiences for their students.
We have worked with the adult education community and other
stakeholders in developing this legislation. We are pleased to have the
support of the National Council of State Directors of Adult Education,
the Commission on Adult Basic Education, the National Skills Coalition,
the Center for Law and Social Policy, CLASP, and the National Council
of Adult Learning.
We are stronger as a nation when every person--no matter their
starting point--has the opportunity to develop their skills and reach
their potential. The CTE for All Act will strengthen the ladder of
opportunity for low-skilled adults who work hard every day to provide
for their families. I urge my colleagues to support this legislation
and work with us to include these provisions in the reauthorization of
the Carl D. Perkins Career and Technical Education Act.
____________________