[Congressional Record (Bound Edition), Volume 158 (2012), Part 1]
[Senate]
[Pages 556-557]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             COLLEGE COSTS

  Mr. DURBIN. Madam President, too many Americans are out of work. We 
know that. Without a steady income, it is hard for families to stay 
current on their monthly expenses. We have all talked about the 
consequences of losing a job. When I meet with the unemployed in 
Illinois, one of the first things we talk about is health insurance 
because that is one of the first casualties. It is very difficult if 
not impossible for someone unemployed to maintain COBRA payments once 
they are out of work. They deplete their savings and find themselves in 
a very vulnerable position. Some fall behind on mortgage payments. More 
than 4 million families have lost their homes since the housing crisis 
began in 2008. Another 10.7 million Americans own mortgages that are 
underwater--the homeowner owes more than the home is worth.
  One of the major mortgage banking associations in Washington, DC, 
recently had a short sale of their headquarters building in Washington. 
They went underwater. They could not pay their mortgage, and they ended 
up selling. It is happening not just to businesses, obviously, but to a 
lot of homeowners.
  It is hard to keep up with these basic expenses. A lot of people who 
used to donate to food banks are now in line at food banks. According 
to the U.S. Department of Agriculture, one out of six Americans really 
has a food issue. They are hungry at the highest level since the 
government started taking these numbers in 1995.
  But there is another obligation, a financial obligation that needs a 
little more focus here in Washington. Private student loan debt is 
becoming the biggest burden for families across America. Student loan 
debt in October of 2010 for the first time in our history surpassed 
credit card debt in America. At public universities, the average debt 
for a graduating student was $20,200. At private nonprofits, it was 
$27,650. For students at for-profit colleges, the debt burden is even 
greater. Students at for-profit colleges graduated with an average debt 
of $33,000. More than three out of four young adults say that college 
has become harder to afford in the past 5 years. Almost as many say 
that graduates have more student debt than they can possibly manage. 
There are few penalties for schools whose students incur huge amounts 
of debt when the student cannot repay their loan.
  How did we reach this point? Two trends have led to this phenomenal 
level of student loan debt:
  First, the for-profit college industry has grown by leaps and bounds 
over the last decade. It is the fastest growing sector of higher 
education. Three numbers put it in perspective. Ten percent of students 
out of high school end up in for-profit schools, yet for-profit schools 
consume 25 percent of all the Federal aid to education and account for 
44 percent of student loan defaults. What is the obvious conclusion? 
These for-profit colleges are drawing in more student loan assistance 
from the Federal Government than their counterparts in the public and 
nonprofit area, and their students, deep in debt, cannot find jobs to 
pay off their debts and default on their loans.
  Second, the cost of college is so far out of reach for most people 
that they exhaust their ability to borrow from the government and end 
up taking out private loans. Private loans are not federally 
guaranteed. The issuer is not required to work with you to consolidate 
the loans or restructure them in the future. If that sounds familiar, 
that is because many of the banks issuing these loans are the same 
banks holding your mortgage. Even more outrageous, the loans are 
protected in bankruptcy. What that means is, unlike other loans we 
would incur in our lives that we might bring into a bankruptcy court in 
desperation, these loans cannot be discharged in bankruptcy. These 
loans will trail the borrowers to the grave. Student loan decisions 
made at the age of 19, 20, and 21 years end up being a lifetime of 
responsibility.
  Yesterday the president of a small, very good college in Illinois 
said that so many students she meets with who are interested in going 
to school are debt-dumb; they do not even understand debt as it might 
affect them

[[Page 557]]

today and tomorrow. Unfortunately, these for-profit schools--and many 
others--are taking advantage of students with little or no life 
experience who end up, many times, with their parents signing for 
student loan debt that is unconscionable, at levels they will never be 
able to repay in any reasonable time, and often, when it comes to for-
profit schools, for worthless diplomas if the student is lucky enough 
to finish.
  One of my constituents, Hannah Moore, recently contacted my office 
regarding her outstanding student debt. I wanted to bring this to the 
attention of the Senate. In 2007, Hannah graduated with a bachelor of 
arts from a for-profit school called the Harrington College of Design. 
It was part of the Career Education Corporation's program. When Hannah 
graduated in 2007 from the Harrington College of Design, her student 
debt was $124,570.
  After she exhausted all her Federal student loan options, she turned 
to private loans when she wanted to finish and get a degree. At first 
she tried to manage her payments of close to $800 a month by working 
three jobs. Her Federal loan is a reasonable payment because she signed 
up for the income-based repayment program, but the private loan demands 
are unreasonable. When the payments became unmanageable, she tried to 
work out a plan with her lender. They refused. She said that she speaks 
to her lender about once a month asking for assistance, with no help. 
When it became apparent she would not be able to afford the payments, 
her family offered to help. Her dad, who had retired, got a job just to 
help his daughter make her student loan repayments. Dad went back to 
work, out of retirement. Her parents spend their time stressing over 
her loans with her.
  Hannah is 30 years old. She wants to be independent, but her student 
debt of over $124,000 is making that impossible. With the help of her 
family, dad going back to work and all she can do, she makes her 
monthly payments, but her life is still very much on hold. She said, 
``My education doesn't feel rewarding, it's a burden right now.'' When 
asked how her student loan debt is affecting her life, she said: I 
can't start a family, can't buy a house, I can't even buy a car. She 
rides her bike to work. Think about that. She went to college, she 
stuck with it, and she graduated with a degree of no value and $124,000 
in student debt.
  She is not alone. Every week I hear from constituents who are seeking 
relief, and I invite them to come to my Web site and tell me their 
stories about student loan debt in America.
  Last week, in his State of the Union, the President spoke about a 
plan to keep the cost of higher education from going even further. His 
proposal will provide better information to families, while enlisting 
colleges and State governments to partner with the Federal Government 
to keep costs down while improving student outcomes.
  To make sure students and families have accurate information, the 
President has proposed creating a college scorecard for all 
institutions of higher education--all of them. The scorecard will 
provide families with clear, concise information about affordability 
and student outcomes--how many students go to this school and finish, 
how many who finish with a degree get a job. It is a pretty basic 
question. Then students and their families can make a good choice. They 
will not be overwhelmed by the spam and ads tossed at them on the 
Internet.
  The plan would reward schools that give value, serve low-income 
students, and set reasonable tuition policies. These schools would be 
rewarded with additional campus-based aid so more students can attend 
college.
  The President's proposal also builds on the success of the current 
Race to the Top Program by creating a new Race to the Top Program 
rewarding college affordability and completion that will promote change 
in State systems of higher education. This Race to the Top challenge 
will incentivize Governors and State legislatures around the Nation to 
join us in keeping tuition costs down.
  Following the President's challenge to keep college costs down, the 
Senate HELP Committee is holding hearings this week on college 
affordability. I thank them for that. It is long overdue, and I look 
forward to working with Senators Harkin and Enzi on this issue.
  A hearing we had just a week or so ago in Chicago on the abuse of the 
GI bill education rights by for-profit schools should be a wake-up call 
to every Member of Congress. Holly Petraeus, the wife of General 
Petraeus, testified. She works at the Consumer Financial Protection 
Bureau, an agency that is in the news. It is controversial because the 
appointment of its Director, Richard Cordray, was announced by the 
President by executive appointment when the Senate refused to give him 
an opportunity to serve.
  The Senate refused to break a filibuster on Mr. Cordray, even though 
I heard no speeches criticizing his ability. The speeches criticized 
the agency, which some Republicans loathe and despise, but it is in the 
law and it should be given a chance to work. Those who are critical of 
it should meet with Holly Petraeus, General Petraeus's wife. She is 
working with military families trying to stop the abuses of for-profit 
schools under the GI bill. That is something on which we should all 
join together, Democrats and Republicans alike. Americans who serve in 
the military are entitled to not only the GI bill but to institutions 
of learning that give them a chance to take their time in school and 
turn it into a much better life for themselves and their families.
  I hope we can come together on the question of affordability and on 
taking a close look at many of these institutions of higher learning 
that are, unfortunately, defrauding many innocent children, families, 
and veterans who are returning from conflicts in Iraq and Afghanistan.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LIEBERMAN. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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