I announce that the Senator from Georgia (Mr. Warnock), is necessarily absent. Madam President, it was in 1957 that there was a world event that changed my life and the lives of many others. I was…
I announce that the Senator from Georgia (Mr. Warnock), is necessarily absent.
Madam President, it was in 1957 that there was a world event that changed my life and the lives of many others. I was just a kid in high school at the time. In fact, I wasn't quite in high school. But the Russians decided to launch a satellite called Sputnik, and that satellite, the size of a basketball, which emitted a tone as it flew through space, scared the world, all of us, to the point where the United States of America did something that was controversial but we felt was necessary.
We decided that the Federal Government of the United States would loan money to students like Durbin to go to college because we were afraid of the Russians, and we knew that, if they had the scientific advantage of us, it could mean we would lose a war, which no one wants that to ever happen. So we created here in Washington something called the National Defense Education Act. I am sure that was carefully chosen to remind people that what we were doing was defending the country by loaning money to people like Durbin to go to college, and I took advantage of it.
Those National Defense Education Act loans had terms that most of us from that era remember very well. You didn't pay anything on your loan balance for the first year you were out of college, and then you had 10 years to pay it off at 3 percent interest.
Of course, those of us who took out the loans for college--in my case, for law school as well--amassed this great debt and worried, when the day came for graduation, whether we would ever be able to pay it off. I remember saying to my wife: Loretta, they have just got all the National Defense Education Act loans. They put them all together, and I am afraid to tell you what has happened. We have a debt of $8,000 for college and law school.
Students today don't believe that number, but that was the number, and it scared us to death that we wouldn't be able to pay it off in 10 years. Naturally, we did, and many others did as well, and the National Defense Education Act really became the pillar of the emergence of higher education in America.
Of course, there were those who cheated the system, and stories were rampant. Whether they were all true, I am not sure. There was the story of the doctor who graduated from medical school and, before he went into his lucrative practice, filed for bankruptcy and discharged all his Federal loans, Federal student loans. I don't know if that ever happened, but it certainly was part of the urban legend around the National Defense Education Act.
So, over the years, there were efforts made to change the National Defense Education Act to avoid abuse, and one of the things that was decided was that that loan to go to school would not be dischargeable in bankruptcy.
You have to ask the basic question of how many debts are not dischargeable in bankruptcy. There are only a few: alimony, child support, criminal fines, taxes, and maybe one other. But I think a student loan is the only one of that bunch that is a consumer loan that you can't discharge in bankruptcy.
Over the years, the terms of the loans and the number of years that you were held back from filing bankruptcy changed. Ultimately, the decision was made that you could effectively never discharge student loans in bankruptcy.
We held a hearing on student loan debt in the Senate Judiciary Committee this week, and I am sorry Senator Cornyn has left the floor, but he and I have introduced a bill which has a good chance, I think.
We know that student loans are the fastest growing category of household debt in America--45 million student borrowers in our country. In a little under a decade, student loan debt has ballooned from $1 trillion to $1.7 trillion. The average student borrower now carries $30,000 in debt, and many, especially those who are swindled by the for-profit colleges, owe well over $100,000.
Americans of all ages are plagued by the debt. We have heard cases of grandmothers who have said to their granddaughters, ``Well, of course, I will cosign your student loan,'' to learn that when the student, the granddaughter, defaulted, Grandma was responsible for it. For some, it is holding them back from buying a first home, starting a family, a business. For others, it means delaying retirement because of this debt.
This is not an individual misfortune. The student debt crisis is a threat to our economy. Federal Reserve Chairman Jerome Powell has warned that student loan debt may be a drag on our economy by preventing Americans from basic, fundamental consumer purchases of cars, savings accounts for retirement--otherwise, the economic growth of our country.
So we had a hearing in the Judiciary Committee, and we examined how difficult it is for student borrowers to get financial relief. These, as I said, are one of the very few categories of debt you cannot discharge in bankruptcy. You see, if you buy a home or a car and you fall on really hard times, you can declare bankruptcy and have all those debts discharged. If you like to gamble and you are not very good at it and you end up running up great debt on your credit card and you file for bankruptcy, your gambling debts through your credit cards can be discharged. You can even buy a yacht and have that debt discharged if you haven't paid it off. But if you are a student borrower who, despite your best efforts, falls on hard times--lured into debt, perhaps, by attending a worthless for-profit college--a fresh start is not in the cards for you.
We had Diane Barta testify before the committee. She is from Richmond Hill, GA, 50 years old, a mother of two. She has over $120,000 in student loan debt, much of it taken out for a worthless degree she received from for-profit school Ashford University. I mentioned that to Senator Grassley during the hearing because Ashford University is a curious story.
A small Catholic college in Iowa was about to go out of business, and the nuns were persuaded that there was a company that wanted to buy it. So they sold the campus to this company called Ashford University. Ashford had no intention of reopening the campus. What they basically did was start an online operation, claiming the accreditation and the worthiness and the credibility of the previous college.
Well, we looked into it. In fact, it was Tom Harkin of Iowa, over 10 years ago, who investigated it and found out that Ashford was a fraud. It was just generating huge profits for their CEO and a few others, not providing anything nearly resembling higher education.
Ms. Barta was a good person who worked hard. She had two degrees-- from a community college and then from another college--before she went for a master's degree at Ashford University. That was her downfall. She talked about how she had to file for bankruptcy in 2012 after her husband lost his job as a commercial plumber. She managed to get relief for most of her debts but certainly could not get discharged from her student loans that she had taken out at Ashford University, this notorious for-profit school.
Other student borrowers had their own stories. We have all heard them.
Angela, from Florida, wrote:
I'm a single parent and was on a single income living
paycheck to paycheck. I've had the stress of these student
loans haunting me for well over a decade now. . . . I am
still being haunted.
Lisa, in Nevada, wrote that she had given up her passion, teaching--I repeat: teaching--because she needed to find a higher income job to pay off her student loans.
She wrote:
It is absolutely disheartening that when you try to better
yourself in this country you're punished and not rewarded.
One more story.
Ann, from Washington State, declared bankruptcy in 2000 because her student loan payments were so high she couldn't afford to pay her bills.
She wrote:
I never go on vacations. I never married or had children
for fear of burdening [them] with [my] debt. . . . I'm facing
retirement with [that] threat [still looming over] my future.
. . . Social Security checks will be garnished for my student
loan.
This is clearly a crisis. Fortunately, both Republican and Democratic members of the Judiciary Committee agree that we need to do something. Congress has a responsibility to solve this problem. Wouldn't it be worth a headline somewhere, on some website, that we actually solved a problem like this?
Before 1976, student loans were treated like any other type of loan in bankruptcy. If you were facing financial ruin, you could get relief. Congress got the idea that student borrowers were running to bankruptcy court right after they had taken off their gowns and mortarboards and trying to wiggle out of their financial obligations. That is more anecdote than fact, but it was prevalent. Still, Congress began passing laws that made it harder to discharge student loans.
Since 1998, student borrowers could only discharge Federal student loans by proving they suffered from something called undue hardship. Well, you would think the cases I just read to you would be undue hardship, wouldn't you, people so deeply in debt that they can't get out of it and are forced to make life choices that are terrible?
Here is the issue: It is nearly impossible to prove undue hardship and discharge your student debt. That is your only escape now. In fact, in 2017, the Wall Street Journal found only four cases--four cases--in the entire country of bankruptcy judges discharging student debt for undue hardship.
For years, I have asked the Department of Education, the collection Agency, to change the way they challenge these undue hardship cases. I am still pushing on them, but Congress needs to do its part.
Another witness who joined us on Tuesday was my State attorney general, Kwame Raoul. He has been an advocate for student borrowers for a long time. He talked about these students being deceived and defrauded by these schools, particularly the for-profit colleges and universities.
Well, we have decided to do something about it. We have introduced a bill called the FRESH START Through Bankruptcy Act. It will allow struggling borrowers to seek a bankruptcy discharge for their Federal student loans after a waiting period of 10 years. That is a long time. If you can't pay off that loan in 10 years and you believe there is no other recourse, you could file for bankruptcy and have it discharged.
Our bill also includes another provision. I want to thank Jack Reed of Rhode Island, our colleague here. He introduced the original bill with this concept. It includes important provisions to hold accountable educational institutions, particularly these notorious for-profit colleges with consistently high default rates and low repayment rates.
There are two numbers you need to remember--and that is it--to understand for-profit colleges and universities: Eight. What percentage of American high school graduates go to for-profit colleges and universities? Eight percent.
Next question: What percentage of student loan defaults in the United States are by students from for-profit colleges and universities? Thirty.
Eight percent of high school grads and thirty percent of student loan defaults. Why? Because these notorious, awful schools drag these young people into debt they can never get out from under. If they so-call finish and graduate from these schools, they find that they can't get the jobs that were promised. Their lives are virtually ruined. So we are basically saying it is time that these schools be held accountable.
At this point, the FRESH START bankruptcy will provide a meaningful timeline to student borrowers who have no other options. It is a breakthrough.
This is the first bipartisan bill the Senate has had, in my memory, to restore student borrowers' ability to discharge their loans in bankruptcy.
I want to thank Senator Cornyn, Republican of Texas. We kind of jokingly say, you know, it is one of those situations where you are on stage, announcing your bill, and you turn to one another and say: Have we both read this bill? Well, we have, and we understand it.
We are also going to consider an element that was raised during the hearing by one of our expert witnesses of defining what ``undue hardship'' is. Right now, it appears the courts couldn't recognize it in any form. There certainly are cases.
I talked about a quadriplegic veteran--disabled, unable to work--who was lured into one of these for-profit school scams and ends up in debt. Shouldn't they be able to discharge that student loan? There is no question they will be able to find some great-paying job in the future. They struggled to basically face up to their illnesses, and we hope that they have the very best future, but even then, it is tough to get out from under the debt.
I hope this is a first of many steps that we will take in the committee and other places, on a bipartisan basis, to deal with this challenge.
One other point. One way for students to avoid becoming buried in student loan debt in the first place is to be very careful, particularly of for-profit colleges and universities, and secondly, take advantage of the affordable alternative community colleges. Community colleges are an underused superpower of our economy. They help students gain the knowledge and skills they need to thrive, and they prepare workers to compete in the 21st century.
I totally support President Biden's plan to build back better and provide every high school graduate to be able to continue their studies through community college, without debt. The same goes for displaced workers who want to learn new skills to get a better job to support their futures. Americans will be able to obtain 2-year degrees or specialized certificates without taking on mountains of debt.
In the greatest country in the world, a college education shouldn't be a luxury; it should be guaranteed to everyone. That is the only way we can launch a new dream of American prosperity and truly build back better after this pandemic.
I yield the floor.
I suggest the absence of a quorum.
Mr. President, for the information of Members, we are planning to have a vote at 5 o'clock today on the confirmation of Eunice Lee to the Second Circuit Court of Appeals. I wanted Members to make their plans accordingly.
Thank you.
Mr. President, I just would like to add a word and thank the Senator from Maryland for his leadership, and the Senator from New York for supporting this, and to reflect for a moment on the comments of the objector, the Senator from Kentucky.
His exact words were: We have got to learn to live with this.
Unfortunately, people are not living with this; they are getting infected and dying. And to accept the status quo and somehow make it a partisan issue--that it is the Democratic Governors who are responsible for what is going on here--is a sad oversimplification. In fact, it is tragic.
We know what is happening. We have a new variant of this COVID-19 virus that has emerged because it is still on the loose and it is changing by the day. We think the Delta variant is dangerous, maybe dramatically more contagious than the original virus.
We know that even people who have been vaccinated can unknowingly transmit this disease, the new Delta variant, and we know that it has taken a deadly toll on 90 percent of the patients who were not vaccinated and were subjected to the illness that came about.
I just want to say, in general, I couldn't agree more with Senator Schumer and Senator Cardin that restaurants in our cities are really the lifeblood. Whether it is my hometown of Springfield, IL, or Chicago, which I am honored to represent, I will tell you that these restaurants are still struggling, and as they struggle, our cities struggle.
And people that I know really measure where we are, as an American nation, recovering by the vibrancy of these restaurant businesses, the ones that are our favorites and bring us together.
They have done their part. We should do our part to give them a helping hand. Let's get through this pandemic together. We are certainly not going to do it by saying that we have to accept the Delta variant and that whatever else follows is just the natural course of things.
We have it within our power to change that. More vaccinations and more careful use of masks and social distancing will make a difference--can make a real difference in this country. Until we come to grips with that reality, we are going to continue to face these devastating disappointments.
Again, I thank the Senator from Maryland for bringing this before us. I hope he will continue to offer it.
I yield the floor.