[Congressional Record Volume 163, Number 115 (Monday, July 10, 2017)]
[Senate]
[Pages S3886-S3887]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. NELSON:
  S. 1521. A bill to amend the Higher Education Act of 1965 to reduce 
the interest rate caps for Federal Direct student loans, to eliminate 
loan origination fees on all Federal Direct student loans, and to 
provide for refinancing of Federal Direct student loans and Federal 
family education loans; to the Committee on Health, Education, Labor, 
and Pensions.
  Mr. NELSON. Mr. President, I want to talk about a heavy financial 
burden that too many of our fellow Americans are being forced to deal 
with. What I am talking about is student loans. You may be surprised to 
know that the second largest amount of debt in America, next to home 
mortgage debt, is student loan debt. Student loan debt is $1.3 trillion 
more than all the credit card debt combined in America. Graduates from 
the class of 2016 have more than $37,000 in student loan debt, on 
average, when they graduate.
  To make matters worse, the Federal Government last week announced 
that

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it was increasing interest rates on Federal student loans for this 
coming school year, which starts in September. For undergraduate 
students, rates are increased from last year at 3.76 percent to 4.45 
percent, almost three-quarters of a percent. That started on July 1.
  Well, our economy is built on the ingenuity and creativity of young 
entrepreneurs who have taken a risk on something new, but today, 
instead of sending our graduates off to be creative and conquer the 
world, we are sending them off with a tremendous amount of debt that 
they are struggling to afford.
  While I was in Florida last week over the July 4th recess, I met with 
a group of recent graduates, and we wanted to discuss their student 
loans. They were not shy about telling me about it. Many of them had 
high interest rates. They wondered how they were going to pay off that 
debt, how they were going to be able to be unshackled from that 
financial burden so they could get on about the business of building 
their career and starting a family.
  Let me give you some examples of the students I met with. One young 
lady graduated from the University of Central Florida in 2015 with 
$50,000 in student loan debt. The interest rate on her debt was 4.85 
percent. She knows that her parents, who have helped her before--they 
are small business owners--are not going to be able to continue to help 
her financially. Even so, she was the first person in her family to 
graduate from college. That student is currently attending George 
Washington University for graduate school, after which she is 
estimating her total debt will be $90,000 in student loans. She told me 
about what every student longs to do: Purchase a home, start a family, 
and get on with their career. But that is increasingly becoming a pipe 
dream for millennials because of the burden of student loan debt.
  I met another student from Deltona, FL, who works as a social worker 
for the homeless. She graduated with a bachelor's degree in social work 
and a master's degree in the same from Florida State. She has dedicated 
her life to public service and helping the most vulnerable among us, 
yet she is facing $75,000 in student loan debt while carrying interest 
rates that range from 5.4 percent to 6.8 percent.
  In Florida alone, students graduating with a 4-year degree are 
leaving with an average of more than $23,000 in student loan debt. The 
thought of trying to start a career with that much debt is discouraging 
when some students, even after attending college in the first place, 
are still struggling. They want to go on to grad school or they are 
still in school wanting to finish their degree, but then they have that 
constant fear of having more and more debt when they graduate. That is 
not in anyone's interest--not the student's, not the family's, not the 
community's, and it is certainly not in the country's best interest. If 
we really want to build a strong middle class, we have to make higher 
education more affordable.
  That is why today I am introducing legislation to lower the cap on 
student loan interest and the so-called lender origination fees and to 
allow those with existing loans to refinance at a lower rate; namely, 4 
percent.
  Remember I told you about that one student I met who had loans that 
went anywhere from 5.5 up to 6.8 percent? That was the interest rate in 
that particular year of their education. I think they ought to be able 
to refinance all of that at a maximum of 4 percent.
  The bill that I am filing today, which we are calling the Student 
Loan Relief Act, would cap student loan interest rates for 
undergraduates at 4 percent, graduates at 5 percent, and parents at a 
cap of 6 percent. It would also help students borrow less by ending the 
loan origination fees the government charges students to process their 
loan. For example, if it is a $10,000 loan, they will take out a loan 
origination fee of $400, so the actual loan the student gets is $9,600. 
These fees are taken out before the student receives the loan. The bill 
we are filing would eliminate those fees all together.
  One other thing the bill would allow for any borrower with an 
existing Federal student loan is to refinance their loans one time to a 
lower rate. Once the Federal Government sets the student loan interest 
rates for the year, they are fixed now under current law for the 
lifetime of that loan and they can't be refinanced, even if the rates 
go lower. That is certainly not in the interest of the student. For 
example, borrowers who took out loans between July of 2006 and July of 
2013 likely have a fixed rate of 6.8 percent. Despite the significant 
drop in interest rates since 2013, currently those borrowers are barred 
from refinancing their existing loans. That is not common sense. 
Between 2006 and 2013, the interest rate on student loan debt got as 
high as 6.8 percent. Students who took out loans during that time are 
now stuck with those rates. They can't refinance that debt as you could 
with a home loan. This bill would fix that by letting those borrowers 
refinance their debt with the new loans that have the lower interest 
rates.
  Capping interest rates, ending loan origination fees, and allowing 
borrowers to refinance existing loans would certainly help make 
education more affordable for our students. It would help to ease the 
financial stress that is weighing down our economy and keeping some 
graduates from making the types of investments that traditionally lead 
to stronger middle-class membership like, for example, home ownership.
  Sometimes, in all of the partisan back-and-forth, some folks begin to 
forget why we are here: to serve the people. I urge our colleagues to 
take a serious look at this bill and join with me in helping those we 
represent.
  We can't continue to leave our graduates saddled with so much student 
debt and no way out. We have to do something to ease the burden, and I 
believe this is a good way to start.
  I would just conclude by recalling what I said at the outset: You may 
be surprised to learn that student loan debt is the second largest debt 
carried in America next to home mortgage debt.
  You can take all the credit card debt in America and combine it all 
and it is not as much as the $1.3 trillion of student loan debt that is 
carried today. We need to help those students, and thereby we are 
helping our country.

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