[Congressional Record (Bound Edition), Volume 160 (2014), Part 5]
[Senate]
[Pages 6988-6991]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              STUDENT DEBT

  Mr. BLUMENTHAL. Mr. President, I would like to proceed with remarks 
on the student debt and loan issue, and I will be brief because I know 
it is late. There have been some very remarkable and eloquent remarks 
and personal stories about the meaning of college education.
  My dad came to this country in 1955 at the age of 17 without even a 
high school degree. He never had one. He spoke very little or no 
English and had virtually nothing more than the shirt on his back and 
knew no one. Throughout his life one of his highest aspirations was for 
his children, my brother and me, to have a college education. He valued 
it almost more than anything else that he could hope for us to have. It 
was part of his dream. For him and countless immigrants and countless 
working men and women born in this country for decades, a college 
education has been part of the American dream, part of the fair shot 
that every American should have, an economic opportunity at self-
fulfillment and developing their full potential because that is what 
education helps us to do. That is the reason why Americans are going 
into debt at unprecedented levels, because they believe in that 
American dream and the fair shot that it gives people through 
opportunity in this greatest Nation in the history of the world. It is 
part of our DNA as Americans that we aspire to educate and fulfill all 
of our potential, which benefits not only us but the whole country and 
all of our society.
  The average level of debt in Connecticut is about $27,000--
calamitously bad not only for those individuals but also for our 
Nation. For the individuals it means that financially crippling burden 
stops them from marrying at the time they wish, having children when 
they might like, starting businesses, buying homes, and moving forward 
with their lives. Who can start a small business with tens of thousands 
of dollars of debt? Risk taking is constrained and straitjacketed. 
People's personal lives are affected and changed forever.
  Student debt today has increased concurrently to approximately $1.2 
trillion in this country. What we are doing in this proposal by 
providing a fair shot to those folks who have debt now and those who 
will incur it in the future is simply enabling them to do what people 
are able to do with other kinds of debt, whether it is their homes or 
their cars--to refinance so that they get the benefit of lower interest 
rates so they avoid that financially crippling burden saddling their 
lives so that they are able to buy homes, start families, and begin 
businesses in ways that benefit them and everyone in our society.
  There is another dark side of this conversation which is that the 
American government profits off the backs of students who have incurred 
debt and who are beginning their lives in debt right now. In fact, the 
United States profits from these loans even at 3.86 percent. So the 
stark crass fact is that even with this relief that we are suggesting 
and proposing and agitating to give to these students who have debt 
now, graduates that are out there with debt with 8, 10, some 11 or 12 
percent interest rates, the U.S. Government will still make money from 
those loans--less money but the loans are still profit-making.
  We should regard higher education as an investment in the future and 
not a revenue source or profit source. We should regard students as an 
investment--a personnel investment, a human resources investment, to 
put it again in crass business terms--that will pay off for years, not 
as immediate profit centers. That kind of wise investment looks beyond 
this quarter or next quarter. It looks to the human revenue in quality 
of life and contributions and new inventions that will change our lives 
for the better, in a more productive workplace that will make our 
companies more successful and profitable.
  I hear from people all around the State of Connecticut. I got a 
stirring and moving email today from Bob in Naugatuck who told me his 
granddaughter has a student loan that he has cosigned and therefore he 
is potentially liable for it. Dean told me about his master's degree 
and that he is $55,000 in debt, struggling to support his family with 
his wife. Between them they have four jobs.
  Alese, a mother of three, went back to school when her children were 
young because she ``wanted to make sure they had an example to follow 
when they finished high school.'' She is now $46,000 in debt.
  As much as our economy is recovering, these folks are in danger of 
being left behind.
  There are other measures that we should adopt, such as the uniform 
forms for college costs that will fully inform people about what debt 
they are incurring, the Pell grant expansion, the bills mentioned for 
net price calculated, and expanding other types of grants. We should 
take a step forward to provide a fair shot for all Americans in this 
measure that enables refinancing of loans that otherwise will crush our 
human potential and leave us poorer as a Nation.
  I thank the Chair, and I yield the floor for my distinguished 
colleague from Wisconsin.
  The PRESIDING OFFICER. The Senator from Wisconsin.
  Ms. BALDWIN. Mr. President, I rise today to speak about a growing 
crisis in our Nation that threatens our economy and the future strength 
of our country. A college education should be a path to the middle 
class, not a path to indebtedness. But today America carries the burden 
of $1.2 trillion in student loan debt.
  In my home State of Wisconsin almost 70 percent of the students 
graduating from 4-year institutions will have student loan debt, and 
the average debt amount will be $28,000. This is real money. This is 
real money that isn't going into growing our economy at a time when we 
desperately need economic growth. This is real money that isn't going 
towards buying a student's or graduate's first car or first home.
  The total amount of student debt in the United States has tripled in 
the last decade, from $363 billion in the year 2005 to over $1 trillion 
today. At the same time Federal financial support for students has not 
kept up with the need. The Pell Grant once covered $7 out of every $10. 
Today it covers $3 out of every $10 in college costs. In addition many 
States have scaled back their investments in higher education. The fact 
is that State investment in higher education has declined significantly 
over past decades, which has exacerbated the problem, particularly as 
States struggle to balance their budgets in these tough economic times. 
Their investments in students have decreased, meaning higher tuition, 
fewer grants, and fewer scholarships.
  I heard from Wisconsin students that the cost of a higher education 
in my State puts college out of reach for too many. Thirty years ago 
undergraduate tuition at the University of Wisconsin-Madison campus was 
about $1,000. Today it is well over $8,000, and it is not just in my 
home State of Wisconsin. Across the country tuition at public 4-year 
colleges has tripled. This all means that more students are borrowing 
through Federal student loan programs to cover the high cost of a 
higher education. For students in the University of Wisconsin system, 
unmet need after grants and scholarships is over $9,000, nearly 
doubling in the last decade. Yet the Federal Government limits on 
subsidized loans have remained relatively stagnant over those same 30 
years. In many cases the limit on what a student can borrow through the 
Stafford Loan Program means

[[Page 6989]]

their loans will not even cover the cost of tuition, let alone other 
significant college expenses. The promise of a higher education has 
instead become a burden that has fallen squarely on the shoulders of 
students and their families.
  Today, reflecting the trend of shifting costs onto students, 44 
percent of college operating expenses are paid through tuition. 
Nationwide, 49 States, including my home State of Wisconsin, are 
spending less on higher education than they did before the great 
recession. Wisconsin has seen a 20-percent decline in State spending on 
higher education since 2008 while instate tuition has increased by 
almost 6 percent over the same time period.
  It has not always been this way, and we seem to have lost touch with 
the American idea of building a path to the middle class by making a 
strong investment in higher education and giving Americans a fair shot 
at upward mobility.
  In 1944, starting with the compact to returning soldiers from World 
War II made through the GI bill, our Nation made a commitment to future 
progress by investing in education. Between 1944 and 1951, 8 million 
veterans received education benefits, including many former 
distinguished Members of this body.
  In 1958 President Dwight Eisenhower, a Republican, signed the 
National Defense Education Act, providing loans for college students 
and funds to encourage young people to enter teaching careers--the 
precursor to our current program for student loans.
  President Lyndon Johnson built upon this legacy. A cornerstone of the 
Great Society was a path to the middle class through a college 
education. The Higher Education Act of 1965 gave us the Federal Student 
Loan Program, known today as the Stafford Loan Program, and the 
Educational Opportunity Grant Program, known today as the Pell Grant 
Program. This generation of Americans and lawmakers lived in trying 
times. Yet they still had the foresight to make the hard choices, the 
choices necessary to invest in the future--our future.
  Throughout our Nation's history, the Federal Government has made 
major investments in expanding access to higher education for all 
people willing to work hard to pursue their dreams. Unfortunately, in 
recent years we have neglected that proud legacy.
  Recently, Congress lowered interest rates for new borrowers but not 
for those borrowers who are stuck paying back old loans with much 
higher interest rates, be they public or private. Further, for those 
who are in true financial distress, Congress has made discharging loans 
in bankruptcy nearly impossible, first by eliminating this option for 
Federal loans in 1995 and then for private loans as well in 2005.
  Tonight we are giving a voice to the debt crisis that faces millions 
of American families and students. Tonight we are giving voice to a 
number of solutions that can address this crisis if we work across 
party lines.
  I believe Congress must take action, and that is why I am proud to 
join my fellow freshman colleague Senator Warren as a cosponsor in 
support of the Bank on Students Emergency Loan Refinancing Act. This 
legislation would allow those with outstanding student loan debt to 
refinance their debt at the lower rates currently offered to new 
borrowers. It is simple. It is paid for by making millionaires and 
billionaires pay their fair share in taxes to give our students a fair 
shot at a bright future, and it will help strengthen the economic 
security of American families who are struggling with this debt.
  I believe making college affordable is one of the most important 
steps we can take toward rebuilding our middle class and breathing new 
life into the American dream. I want to live in an America where 
everyone has a fair shot at getting ahead.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. BOOKER. Mr. President, it is an honor to stand here with a chorus 
of my colleagues speaking about an issue that goes to the core of the 
idea of this country; that is, every generation will be better than the 
one before. It is the idea that in this Nation we should lead globally 
in enriching the lives of our citizenry.
  The Presiding Officer and I talked a few seconds ago. He said he was 
going home after this to put his kids to bed. I hope the Presiding 
Officer doesn't mind me sharing that. I know the Presiding Officer is 
going to teach his kids the same thing my parents taught me: Work hard 
and play by the rules so you can go to college and try to achieve your 
dreams.
  When I have traveled all over the State of New Jersey--North Jersey 
and South Jersey, from urban towns to suburban towns and even rural 
towns--I have heard the same kind of frustration, which is the rising 
costs of college. Not only that, I see more and more people who try to 
take on the challenge of paying for those rising costs and find 
themselves saddled with staggering debt. The facts reflect the 
sentiments, frustrations, concerns, and anguish that I hear.
  Today the average student graduates from college with around $29,000 
in loans. That is up from an average of $27,600 in 2011 and $23,792 in 
2010. In fact, right now in New Jersey 16 percent of my constituents 
are carrying student debt. That is over 1 million New Jerseyans who are 
weighed down by this significant financial obligation.
  Let me put this in perspective because it has a ripple effect within 
our economy. Take, for example, our housing. Housing is such an 
important driver to economic development, and it is an important driver 
to jobs. Owning a home is a dream many people in America have as well. 
Well, the reduced purchasing power due to high student debt levels is 
holding back people's ability to help drive our economy forward.
  The housing industry, which is still recovering from a crisis, is an 
example. The National Association of Realtors cited student loan debt 
as a primary reason for the decline in housing purchases among first-
time buyers. Of 20 percent of first-time buyers who find it difficult 
to save for a downpayment, 54 percent of first-time buyers said student 
loans make it tough to save money. According to a recent survey by the 
National Association of Realtors, about half of all the people polled 
in a survey said student debt was a huge obstacle to buying a home. 
According to the Federal Reserve of New York, from 2009 to 2012 home 
ownership rates fell twice as much for 30-year-olds who had a history 
of student loans than it did for those who don't.
  This is a problem which is impacting families, and it is stifling 
people's ability to participate and make our economy robust. It is 
making job growth a challenge. It has many different layers.
  What I want to focus on for the last few moments is my desire to keep 
America No. 1. When it comes to educating our populous, we should be 
and have been historically top in the globe, especially at the higher 
education levels. When we created programs that many of my colleagues 
have cited--I heard Senator Durbin speak about programs that literally 
took him from a lower middle-class environment to achieving his dreams. 
Accessing affordable college loans allowed him to achieve his dreams. 
We created these programs because we understood that the workforce in 
this Nation is essential for economic competitiveness. Indeed, in a 
global knowledge-based economy, it is the knowledge of the people that 
drives the economy forward. Without highly skilled workers, America 
simply won't be able to compete in this new global economy. This wisdom 
has been understood for decades, for generations. You educate your 
workforce to the highest levels on the globe, and your economy will 
lead the globe.
  Well, today we are seeing challenges, and we are seeing this reality 
change. Today the average price of a college degree in the United 
States has climbed to $13,856. Compare that with some of our critical 
global competitors. Take the UK, for example. In the UK, the average 
cost is $5,288 for a higher education. Take Germany, another one of our 
global competitors. German students pay a mere $933. Those competitive 
economies understand that they don't want to put up barriers so their 
young people can learn. They want to remove them.

[[Page 6990]]

  The cost of college in America puts our young people at a severe 
disadvantage compared to their peers around the world. It is not a 
level playing field. We are asking our kids to compete globally, but we 
are putting up barriers that are unique to this economy.
  When the cost of college in the United States is now more than 51 
percent of the median income in America--let me say that one more time. 
The cost of college in America is now 51 percent of the median income 
in America, while the cost of college in Germany is just 4.3 percent of 
that country's median income. When the United States has one of the 
highest percentages of adults--we are one of the top in the globe for 
adults 55 to 64. That generation of Americans which had the kinds of 
student loan programs and opportunities Senator Durbin talked about are 
at the top, but only 43 percent of Americans ages 25 to 34 have a 
degree. Instead of that younger group being at the top, America has 
now--compared to our competitors--fallen to 16th place globally.
  In other words, older Americans who benefited from a rational system 
of affordable college and abundant affordable loans are leading. Madam 
President, 55- to 64-year-olds are leading the globe in the percentage 
of population with a college degree. The younger we are getting in our 
country, the lower we are falling in our competitiveness with our 
competitors in terms of the kids who have college degrees. We wonder 
why that is. It is because the ability to afford college has been 
getting more and more difficult.
  I am encouraged by my colleagues. We should be doing everything to 
encourage forthcoming generations to pursue higher education so we 
don't slide further in global rankings and compromise our long-term 
ability to compete. That is why I am standing here right now. That is 
why I am proud to cosponsor Senator Warren's newly introduced 
legislation, the Bank on Students Emergency Loan Refinancing Act, which 
would allow those with outstanding student loan debt to refinance at 
the lower interest rates currently offered to new borrowers. It simply 
allows them to refinance loans the way you can with a mortgage and 
other types of loans. This will make us more competitive.
  I commend a lot of my colleagues who spoke here. I especially commend 
Senator Harkin, Senator Reed, and Senator Gillibrand, who have been so 
active in calling attention to this issue.
  We cannot afford for the cost of obtaining a higher education to be 
decades of crushing debt. It is unacceptable. The legislation we are 
talking about today seeks to lighten the burden on student borrowers 
and to put money back in their pockets and to help fuel our economy 
but, more importantly, to help everyone understand that in this Nation 
we are still doing everything possible to lead the globe in education.
  There is a lot of work to do. My team is trying to focus on some 
issues I saw as mayor. For example, when I was mayor we worked with 
schools and financial aid counselors to help families simply fill out 
these forms that are necessary to obtain aid.
  The College Board estimates that 2.3 million students do not fill out 
the free application for financial aid form, better known as the FAFSA 
form. They don't fill it out because of its complexities. They don't 
fill it out because of issues that make it difficult to even report 
what is necessary. As a result, many qualified students are skipping 
this process because they find it complex and burdensome. They are not 
even getting into college, not even afforded that pathway to cultivate 
their genius and apply it to our economy.
  So much more can be done. This should be a national call to make 
college as affordable in this generation as it was for past 
generations. Past generations in America led the globe and drove the 
top economy on Earth because of that education, but now we are raising 
the wall and shutting out more of our young minds from this pathway 
because of unaffordable colleges.
  For individuals, a college education translates to more than just odd 
job opportunities, more than just higher earnings, it is an ascent up 
the economic ladder.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. BOOKER. Mr. President, I will conclude with this: In a recent 
study, it was found that the United States could add $500 billion to 
the gross domestic product over the next 15 years by increasing the 
number of workers with postsecondary education by 20 million--more 
workers, a greater economy, a more successful America, and a nation 
that leads the globe. Let's do and learn from what our parents and 
grandparents knew and did in this body and around the Nation.
  Let's make college affordable for our citizens.
  I thank the Presiding Officer and yield the floor.
  The PRESIDING OFFICER. The Senator from Hawaii.
  Mr. SCHATZ. Mr. President, on the Senate floor we have been focusing 
on policies that give Americans a fair shot, bills that would help to 
reverse the growing trend of income inequality and create more 
opportunities to climb the economic ladder, the idea that if you work 
hard and play by the rules, you can do well for your family and you can 
create a better opportunity for your children and their children.
  Making college more affordable and reducing student loan debt is 
central to these goals. In fact, I think it is the middle-class issue 
of our generation.
  It is hard to get ahead nowadays without a college degree, but the 
cost of college is growing faster than the cost of all other consumer 
goods--twice as fast as health care costs.
  The growing cost of college is preventing some from getting a degree 
in the first place and leaving others with unmanageable levels of debt. 
This is the middle-class issue of our time.
  Students have taken on more than $1 trillion in debt to cover the 
cost of college. Student debt is now the fastest growing and highest 
consumer debt burden behind mortgages.
  This debt burden is not sustainable. Saddled with this debt, young 
adults are delaying starting families, buying homes and cars, and 
starting new businesses. The rate at which students are failing to 
repay their loans is alarming. Over one-third of borrowers who are in 
repayment are delinquent on their loans by 90 days or more. One-third 
of borrowers are delinquent.
  One of my constituents from Wahiawa, HI, took out a loan to help 
their son go to college. The loan was for $92,000 in 2006. Today they 
owe $143,000. This local resident says:

       The interest compounds. It's like a loan shark, pretty 
     close. There's no way out. No way to pay it, ever.

  We are hearing these stories far too often from many families in 
Hawaii and across the country, and they need our help. A college 
education is supposed to be a path to opportunity and the American 
dream, not a life of debt. It is clear our current system is not 
working.
  The Federal Government is giving $140 billion a year in financial aid 
to institutions of higher learning in Federal grants and loans. That is 
good, not bad. Higher education is the straightest line for us to 
develop the workforce we need and for people to move up the economic 
ladder, but with that $140 billion we should be making college more 
affordable for students. Instead, we are getting the opposite result 
for the $140 billion.
  Average Pell grant awards have increased by almost 20 percent in the 
past 10 years. In that same time period, Pell grants covered 25 percent 
less of the average public school's tuition and fees. We are paying 
more and we are getting less. There is a growing gap between the 
financial aid that is available to students and the cost of college. To 
fill that gap, students are loading up on debt.
  Last summer, Congress passed a bipartisan student loan compromise 
that lowered the student loan interest rate for new borrowers, but 
millions of student borrowers were left out of that deal and are paying 
much higher rates.
  I am proud to join Senator Warren in introducing the Bank on Students 
Emergency Loan Refinancing Act. This

[[Page 6991]]

bill will allow students with outstanding student loan debt to 
refinance at the same low interest rates offered to new borrowers under 
the bipartisan student loan compromise.
  That is fair. Students struggling with student debt deserve to get 
the same deal Congress is giving to new borrowers. But when we talk 
about making colleges more affordable, we need to remember that 
lowering student loan interest rates is only part of the problem. It is 
not just the interest; it is the principal.
  We need a bold long-term plan to bring down the cost of college. That 
is why I introduced the College Affordability and Innovation Act with 
Senators Chris Murphy, Patty Murray, and Bernie Sanders. The bill is 
about holding schools accountable to taxpayers and students. We want to 
reward those schools that are focused on affordability and give 
incentives for the rest to make affordability part of their mission. If 
you are a college, you can have whatever mission you want, but you have 
no special right to Federal funding.
  Our bill says, very simply, if you receive Federal dollars, part of 
your mission must be about affordability and access. There are 
potentially billions of dollars that are not being used wisely.
  As we invest in higher education--and we should, through student loan 
subsidies and Federal financial aid--we should make sure schools are 
actually fulfilling our Federal public policy goals of making college 
more affordable and more accessible for all students.
  Let's work together to make sure a college education is a path of 
opportunity for all students and not a life of debt.

                          ____________________