[Congressional Record Volume 168, Number 143 (Wednesday, September 7, 2022)]
[Senate]
[Pages S4458-S4460]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Student Loan Debt Relief Plan
Mr. DURBIN. Madam President, October 4, 1957. Many in the Chamber
were not alive at that date. I was. I was a teenager, maybe in high
school, just starting, or at the end of grade school. But it was a big
day in the history of the world, October 4, 1957, because at 7:28 p.m.
at night, the Russians launched Sputnik.
Sputnik was a basketball-size satellite, and we were concerned
because we believed the Russians--then the Soviet Union--had the
capacity to drop an atomic or nuclear bomb on the United States, and if
they could do it from space, for goodness' sake, how would we defend
ourselves?
So a mild panic hit America, particularly in this town of Washington,
and out of that panic came a pretty good idea, as far as I was
concerned. They decided that for the first time in the history of the
United States, we would start loaning money to college-age students so
they could go to college. The notion was, if we had to fight the
Russians or the Soviets in technology, we better have people educated
and prepared to do it.
So someone who in those days sat down and wrote up the names of these
wonderful ideas came up with a great one. It was called the National
Defense Education Act. The National Defense Education Act said that
those who applied for Federal college loans could borrow money and pay
it back at 3 percent interest but not have to pay until 1 year out of
college, and then they had 10 years to pay it off.
I didn't know at the time, but that turned out to be my ticket to
college. There was no way that my family could afford to send me, nor
could I afford to go to school at good schools from any money that I
had saved or could earn during the summer. It was the government loans
that got me through it. And I wasn't alone. By the tens of thousands,
students all over the United States took out these National Defense
Education Act loans.
Well, what happened as a result of that idea that we could educate
ourselves out of this problem? It worked. It worked dramatically. In
the early 1960s, there was this explosive expansion of our economy, of
technology and research and scientific endeavors that we took advantage
of for decades and still do to this day.
I think about the race to the Moon and all the other things that we
set our sights on, and they were all based on enough well-educated
people at every level who could compete with countries around the world
and do it successfully. So the concept is sound, and I think it was
executed--not flawlessly, but very well--for myself and for many
others, and I ended up borrowing that money to get through college and
law school.
The amount of debt if I even said it on the floor maybe would draw a
laugh by the pages and everyone else because it was so small, but it
was enough debt that it just scared me to death. It was the equivalent
of 50 percent of my gross pay coming out of law school in 1 year. But
most students today would accept that in a second: 50 percent of their
gross wages in their first year as their student loan debt.
The average is higher. The average is over $25,000, and for some
students, it is almost astronomical what they end up borrowing. I can't
even imagine the cost of colleges and law schools today and medical
schools and dental schools and the debt that is involved--which leads
me to the second point in history and I think it was sometime in the
1960s.
Somebody wrote a story about student loan borrowers who went to
medical school, finished medical school, then got their licenses to
practice medicine with a pretty good opportunity to make some real
money in life, but they had one more stop. They stopped at the
bankruptcy court and they discharged their student loans in bankruptcy
court and then went on to practice medicine.
Well, that sounded like a pretty bad deal for the government who
trusted them to get a degree and earn enough money to pay back the loan
and in the
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fairness of this, that they wouldn't accept their responsibility. So
someone dreamed up the idea that, well, let's make sure you cannot
discharge your student loan in bankruptcy court.
There are a handful of debts that you can incur that cannot be
discharged in bankruptcy court--but just a handful. Taxes that you owe
the government, for example, I believe, are not dischargeable; money
that you owe in divorce settlements and child support are not
dischargeable; and a handful of other things. But otherwise, anything
you can borrow money for, you can go to bankruptcy court and say, ``I
want to walk away from all my debts,'' and achieve that goal.
For example, if you had a mortgage on your home and you want to be
discharged from paying off that mortgage, you can do it in bankruptcy
court. You may or may not have any home left after it is discharged in
bankruptcy, but it is a fact. If you borrow money to buy a boat, you
can discharge that loan in bankruptcy. If you buy a car, you can
discharge it in bankruptcy. A second home? Discharge it in bankruptcy.
But when it came to student loans, we said because some of these people
took advantage and didn't pay back their loans, we are not going to
allow you to discharge it in bankruptcy.
That ultimately meant that those who borrowed money to go to school
or college when they were 19 or 20 years old, they would have a debt
that they will have to pay back or carry it to the grave--literally,
carry it to the grave. There was no way to get rid of it.
So what happened? We know. A lot of people got too deeply in debt. It
turned out that even the promise of a college diploma was not enough to
meet their obligations, so they are deeply in debt.
(Mr. HICKENLOOPER assumed the Chair.)
Now, Mr. President, let me mention a third category of things that
started before the Presiding Officer arrived. There was Sputnik which
changed the world and the National Defense Education Act; we went and
changed the bankruptcy law and said that you can't discharge a student
loan in bankruptcy.
Now, let me introduce a third phenomenon. And I have done so before,
but I want to give you two numbers, and I want you to get out your pens
and pencils, and I want you to write them down because they are going
to be on the final. OK? There are two numbers: 8 and 33--8 and 33. So
when you see the question on the final of what percentage of college
students go to for-profit colleges and universities, hold up your hand.
It is 8 percent. Eight percent of college students go to for-profit
colleges and universities. Those are the ones that are heavily
advertised. You see them everywhere.
Thirty-three. What percentage of all student loan defaults are
students who went to for-profit colleges and universities? Thirty-three
percent. Eight percent of the students have 33 percent of the student
loan defaults.
What is going on here? Why are those students so disproportionately
defaulting on their student loan debt? They were misled into going into
these schools that were worthless--worthless.
You see ads on TV that show this lovely young lady. She was in her
bedroom in her pajamas with a laptop computer saying, ``I am going to
college.''
And you think to yourself: Get real. This isn't real college. This is
a way to get you to pay too much in tuition for something that is
basically worthless. And students do. Eight percent of college students
do it.
So the point I am making is, many of these students are deceived and
duped into going to these colleges because of the promises they make
about what these degrees are worth and how easy it is to acquire an
associate's or bachelor's degree. So they are deeply in debt, and they
can't find a job and take care of them. I will tell you the story of
one of them in just a moment.
But put those together, and that is why we need to do something about
student loans in America. Yes, we need student loans in America. They
are good for America and its economy. Should they be dischargeable in
bankruptcy? I think, under some circumstances, they should be.
If 10 years have passed and you still had a balance on your student
loans and you were literally head over heels in debt, you ought to be
able to discharge that in bankruptcy. You tried your best. Ten years is
enough. That is one approach. But the other approach, President Biden
has just suggested. That is why he issued a one-time student loan debt
relief program to ease the college debt burden on middle- and lower-
income families.
Under the President's plan, the government will erase $10,000 in
Federal student loan debt for some borrowers who make less than
$125,000 a year. If you are married and file taxes jointly or head of
household, you qualify if your income is $250,000 or less. If you
received a Pell Grant while you were going to college--and those are
for lower-income families--you could qualify for an extra $10,000 of
student loan cancellation.
Under the President's plan, 43 million Americans will receive some
amount of debt cancellation. A majority of them--about 27 million
borrowers--will see up to $20,000 knocked off their student loan
balance. For 20 million borrowers, that is enough to totally wipe out
their entire student loan balance. They literally can start again. They
can consider going back to school--maybe even a good school that gives
them the kind of training, education, or degree that really can lead to
a better life. Or they can try to take another course of action.
There are other approaches. I have got labor unions all over my State
begging for apprentices--good-paying jobs for skilled craftsmen and the
like. They don't need a college degree to achieve that. Some of them
may consider that.
Everyone who qualifies for relief will get a lower monthly payment at
least, and that means real help now. Of course, it isn't a real
complete solution to the challenge. Too many colleges are charging too
much money.
When I ask of a nice college: What does that nice college ask for
tuition? I visited one just over the August break. And someone said: It
is $72,000 a year. I said, For tuition? How in the world can it be?
Well, they give a lot of student grants and scholarships and
fellowships and this, that, and the other thing. But the cost of higher
education is getting beyond the reach of average people, and that is a
big problem. We need to have affordable education and education that
helps you meet your goals.
I might also say that some of the people who have been involved in
borrowing money have some sad stories to tell.
Vickie Vences is one of thousands of Illinois students who were
deceived by one of these for-profit colleges called Westwood. Vickie
grew up on the South Side of Chicago. She is the first person in her
family to attend college.
She decided that she wanted to go into law enforcement. She enrolled
in a criminal justice program in Westwood College in 2004 in Chicago.
She believed the recruiters. They said: A degree from Westwood is going
to open the door for you, young lady, right into the field of law
enforcement.
She found the opposite was true. They laughed at her when she showed
her resume from Westwood College. They said: That is not a real
college. That is not a real degree, and that doesn't help you a bit--
because Westwood hid the truth about the fact that they were not
accredited in Illinois. A lot of young people were duped into believing
it was a ticket to a good law enforcement job.
By the time Vickie found out how badly she was into it, she had
$50,000 in student loan debt, and she didn't have even a Westwood
degree to point to.
That is unfortunate. She could have done a lot more with her life,
were it not for the student debt and the deception of these for-profit
schools. She is working mostly for nonprofit organizations. She finds
it hard to make any of her loan payments. The good news is that the
Department of Education canceled the student loan debts of all former
Westwood College students following investigations into Westwood's
widespread misconduct. Vickie is going to get a break.
That is why, I have to tell you, I was a little upset with one of our
colleagues--and I won't name names. We are not supposed to do that on
the Senate floor. But he started mocking the students who are heavily
in debt. I think he referred to them as ``slatternly baristas.'' I
think that means they are lazy and work at Starbucks--
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and here, they have too much debt, and it is their own damn fault.
I couldn't disagree more. Students, when you are 19 or 20 years old,
don't know what is a reasonable debt and what isn't. They just don't
have life experience. Many of them are first-generation college
students in their family. Mom and dad are not much help. They want to
see their kids get a college degree. That is supposed to be the ticket
to success. So young people sign up for loans, and they sign up in
schools that can't produce a diploma that leads to a job, and they get
stuck with it.
Vickie, I mentioned earlier, tried her best to pay off these loans
and doesn't have much luck. She says that being freed of some of this
debt is going to be at least lifting part of the burden. Let's be
honest about it. I don't know that she is lazy or if ``barista'' is now
a negative term. I don't think it is. Those folks are working, and I
respect the fact that they are.
She said, ``I'm not asking for anything for free. I just think things
should be fair. Education should be affordable. And we ought to be able
to earn enough to pay back what we owe.''
These Republican colleagues of mine are setting out to stop this plan
by Joe Biden. I guess it will be a great source of pride if they do it.
They can say: We stopped this relief for all of these young people who
are in debt. We sunk them deeper into despair. And we did it because it
is an election year.
I think it is unfortunate. The President's student loan forgiveness
plan is not a giveaway to rich doctors and lawyers who racked up big
debt at Ivy League schools. Ninety-eight percent of the student loan
borrowers did not attend those schools. The majority of these debts are
held by families who have zero net worth--zero. What will their life be
like without help? Nearly 90 percent of the relief dollars in the
President's plan will go to borrowers who earn less than $75,000 a
year.
And let's reflect for a moment on what has happened over the last few
years in the United States of America under the previous President who
will go unnamed and what we have seen as a result of this pandemic.
Remember when we came up and were unable to articulate the number
``trillion dollars'' without shaking? We started talking about
trillion-dollar relief packages in the pandemic. And we said to people:
We are going to have loans through the Small Business Administration
for people who have a job or a business and need a helping hand in
terms of borrowing money to get by. And if you can prove that you spent
the money on payroll and utilities and rent, it is forgiven.
So take a look at that mechanism. Through no fault of their own, they
were stuck with debt because of the pandemic. They borrowed money from
the Federal Government--taxpayers' money--and if they could spend it
for the right things, it was forgiven, a walkaway. I didn't hear a lot
of speeches about ``slatternly baristas'' at that point in time. And we
have also seen it happen before. In fact, we have had a number of
Members of Congress who applied for some of those PPP loans.
The same people who are criticizing forgiving student loan debts
literally personally borrowed money that they didn't pay back to the
Federal Government, and they don't think there is anything wrong with
that. I can go into a long list of people who have benefited by loans
that were forgiven or grants given by the Federal Government.
Better than going through that list, let me say the bottom line is
this: If we can help these young student borrowers with an opportunity
to reduce the debt they owe and get their lives back online, that is a
great outcome for them and a great one for this Nation.
The same type of idealism that drove us to the National Defense
Education Act after Sputnik applies as well today. We should have a
well-trained, well-educated American workforce ready to compete with
the world. I think we can do it. Joe Biden's step is a reasonable,
humane step in the right direction. It should have bipartisan support.
I yield the floor.
The PRESIDING OFFICER. The Senator from Florida.