[Congressional Record (Bound Edition), Volume 162 (2016), Part 6]
[House]
[Pages 8539-8540]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           STUDENT LOAN DEBT

  The SPEAKER pro tempore (Mr. Loudermilk). Under the Speaker's 
announced policy of January 6, 2015, the gentleman from California (Mr. 
Garamendi) is recognized for 60 minutes as the designee of the minority 
leader.
  Mr. GARAMENDI. Mr. Speaker, it is good to be back on the House floor 
to pick up on an issue that concerns most every American that has gone 
to college, who is now in school, or beyond.
  I remember a day 3 weeks ago at the Calaveras County Fair. The 
security guard at the gate greeted me.
  He said: Congressman.
  I said: Yes.
  He said: I need your help.
  I said: What can I do for you?
  He said: Well, I had to go back to school to get the license and the 
education for this job. I now run the security program here. I will be 
over 70 years of age before I am able to pay off my student loan.
  He was probably in his early fifties at that time.
  I said: How can that be?
  He said: The interest rate is killing me.
  And, indeed, not only killing him, but all across this Nation, the 
issue of student debt is harming families, holding back the formation 
of families--not getting married because you have to pay off the debt, 
and who would want to marry that person with all that debt? I don't 
think so--buying houses, getting a car, carrying on in your life.
  Student debt is an incredible burden on the American public. And not 
just the students but, in many cases, the parents of students.
  Here is what has happened with student debt:
  It is now over $2.2 trillion. Probably today it is much larger than 
the debt on credit cards. The growth has been almost exponential. And 
we are continuing to see this rise. It is not over. Continuing the debt 
is part of America's reality.
  Here are some astonishing facts about student debt:
  Not only is it $1.2 trillion, but it is continuing to increase at 
$2,726.27 every second. So we are going to see this go way beyond $1.2 
trillion to, and probably approaching, nearly $1.5 trillion by the end 
of this decade.
  The number of borrowers and the average balance of their debt has 
grown by 70 percent between 2004 and 2012. That is more than 7 percent 
per year.
  And finally, down here, we can say that the average student loan debt 
for graduate students is now over $35,000 per student. This is an 
extraordinary burden.
  Now, tell me, what family in America has not refinanced their home? I 
think we all have. Certainly, Patti and I have refinanced our home. And 
I suspect most Americans, if they haven't yet refinanced, are watching 
the interest rates and looking for that moment when they, too, will 
refinance their home.
  So the question for us today is: Why not refinance student loans just 
the same as we refinance our homes?
  Well, the loans are owned by the Federal Government. So this is a 
question for us in Congress to say: Yes, let's do something to give the 
American economy a boost. Let's give something to those families, those 
young students that are out of school and those that are still in 
school--an opportunity to refinance their loans and to recalculate the 
interest on loans that they will be taking out in the months and years 
ahead.
  Take a look at this. Undergraduate loans from the Federal Government 
are now 4.29 percent. If you are in the other programs, it may be 5 
percent. And if you are in the graduate program, it is 6.84 percent.
  The Federal Government can borrow money somewhere less than 2 
percent, or right around 2 percent for 10 years. If you add another 
percent for administrative costs, we could refinance all that $1.2 
trillion of student loans down to 3.23 percent.
  What a break that would give to students in school and out of school 
and those that are going to be borrowing money for the next school 
year, 3.2 percent versus 4.29 percent. Or, if you are a graduate 
student, 3.2 percent versus 6.84 percent--less than half the interest 
rate.
  We can do it. We can do this. And when we do it, we can help those 
students that are now carrying that incredible burden of having to pay 
these extraordinary interest rates to the Federal Government, which is 
actually making a $138 billion profit on the backs of students.
  So I go back to that gentleman there at the Calaveras County Fair who 
now has a business, but also has a student loan that he took out to get 
the education he needed to start that business. I would go back to him 
and say: I will tell you what. Instead of a 6 percent or 7 percent 
loan, we can refinance your loan down to 3.23 percent.
  And what does it mean to the individual student? It means a great 
deal.
  So we have introduced H.R. 5274, the Student Loan Refinancing and 
Recalculation Act. It will do the following. It would set all student 
loan interest rates at 3.25 percent--new ones that come up, existing 
ones, graduate loans, low-income family loans, and the like.
  If you happen to be a low-income family, and many of these students 
are--in fact, the great majority of low-income student are, in fact, 
taking out loans. For those borrowers, it will be thousands of dollars 
of interest saved, because we also calculate that the interest will not 
begin to accrue until after graduation.
  Also, we know that the average savings for students will be over 
$2,000 on their loans.
  It also eliminates the origination fee. Why is the Federal Government 
charging an origination fee when a student actually goes to the 
financial office at the university and the paperwork is done by the 
university? Yet the Federal Government--your Federal Government--is 
sticking it one more way to the students by charging an origination 
fee.
  So the new piece of legislation, H.R. 5274, the Student Loan 
Refinancing and Recalculation Act, is an enormous advantage to the 
American economy by allowing these students to hang on to a little bit 
more of their money and to engage in the economy: get married, get a 
car, buy a house.
  I had an interesting conversation with the bankers that came into my 
office a while back. They said: The interest rate is not the only 
problem.
  I said: Really? What is the rest of it?
  They said: These students are carrying these loans on their assets or

[[Page 8540]]

their liabilities, and when we look at their asset-liability, we see 
this enormous debt, and we cannot even offer them a loan.
  He said: If you are able to reduce that--the interest rate and, 
therefore, the payments that are required--we will be better able to 
offer them a loan for a car or a house.
  So let's do it. The Federal Government ought not be making $138 
billion profit on the backs of students. We can borrow money at less 
than 2 percent or right around 2 percent for 10 years. Let's refinance 
all of those $1.2 trillion of loans down to 3.2 percent. And for the 
new loans that the students are going to be taking up this coming year, 
let's give them a break. Instead of 4, 5, or 6 percent, let's do 3.2 
percent. It is just 1 percent more than the Federal Government can 
borrow money.
  So keep in mind H.R. 5274, the Student Loan Refinancing and 
Recalculation Act. My colleagues, let's do it. Let's do it for the 
students--both new and existing students--and families that have taken 
out loans so that their children can get ahead, so that those students 
that have taken out that loan can have the burden reduced. Refinance 
your house, refinance your student loan.
  Mr. Speaker, I yield back the balance of my time.

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