I thank the gentlelady from New York and the gentlelady from North Carolina. I thank the gentlelady from New York for her persistent leadership on this issue. I rise today to first ask the question how you can have legislation that sounds…
I thank the gentlelady from New York and the gentlelady from North Carolina. I thank the gentlelady from New York for her persistent leadership on this issue.
I rise today to first ask the question how you can have legislation that sounds positive, but in actuality literally puts the education system of America upside down.
First, let me tell you how frustrated Americans are as they see the drip, drip, dripping of the sequester; and I join the gentlelady in her frustration on why we have not gone to budget reconciliation. I just want to mention the pathway of education so we can see that families are being pounded upon. Sequestration is causing 70,000 children to lose Head Start and Early Head Start. And, unfortunately, 950,000 military children will lose teachers. I live in a State where we have a lot of military bases.
So when I rise today to oppose H.R. 1911, I rise with a high degree of overwhelming frustration for the people who live in my State. I am sorry that this rule did not accept an amendment that I had that would have submitted a report to Congress on the feasibility of offering loan forgiveness for those who put businesses in economically depressed areas. That truly provides for jobs.
But then the real thing is to cap the interest rates at 4 percent. As was indicated by my colleague, Mr. Holt, he indicated how the numbers would go up for the students. Well, let me talk to you about Parent PLUS. Now, you can really see the oppression on parents who are trying to help their children go to school. In addition to the $100 billion of debt that students are carrying, we now eliminate the feasibility of Parent PLUS loans. Right now in current law, they're $27,956. But if we go into this bill, they'll go up to almost $36,000. Imagine a parent with four children.
I've spoken in the last couple of weeks at the University of Houston- Downtown, the University of Houston, Texas Southern University, Houston Community College. I've spoken at Lone Star colleges, all of these colleges in our districts, St. Thomas.
All of this does not answer the question when this bill will be passed. I ask my colleagues to oppose the rule, oppose the underlying bill. Cap this. This is not the President's message. The President had an extended life to be able to provide for parents and students. All you have to do is look at the red--$36,000 is what this bill is going to cost parents, and that means that we're going to close the door of opportunity for women, for minorities, and for Americans to get a higher education.
This is not the way in graduation season to say thank you to our children for being successful and graduating from college. Let's oppose this bill and do the right thing for Americans.
Mr. Speaker, I rise in opposition to the Rule and the underlying legislation because H.R. 1911, the Smarter Solutions for Students Act would cause financial hardship for students seeking a higher education.
The Rule for H.R. 1911 did not fix the underlying legislation. In fact, the Rule we are debating accepted no amendments that were offered by Members of the Congress. I offered the Jackson Lee Amendment #1 that would have capped student interest at 4 percent. This would have removed the threat of the cost of education doubling at the beginning of July.
I also offered the Jackson Lee Amendment #2, which directed the Secretary of Education to submit a report to Congress on the feasibility of offering student loan forgiveness to those who start businesses in economically depressed areas such as HUBZones.
This amendment would have encouraged young people from low income areas who get college degrees to return home to start businesses. This would establish economic opportunities for young graduates as an option for employment and at the same time bring businesses and job opportunities to target areas.
Students who are graduating across the nation are departing colleges and universities this spring with immense debt. Student borrowing is widespread with more than $100 billion in federal education loans distributed every year. In total, student loan debt adds up to $1 trillion. As a direct consequence of a weak economy, more than ever students and parents must rely upon loans to pay for higher education.
The American family has been under financial pressure for twenty years resulting in longer hours, less pay and more debt. The only reliable way in today's economy to earn more is to learn more. During difficult economic times adults seek new careers by going back to school. Parents who want a better life for their children will take on college loan debt because the cost of education requires it.
In the City of Houston, this spring I have participated in commencement exercises for the University of Houston, Texas Southern University, Houston Community College and Lone Star College North Harris. There are thousands of new graduates just in the City of Houston alone who are ready to pursue their dreams, but who will wake up to the reality of tens of thousands of dollars in debt.
On July 1, 2013 the student loan interest rate will rise from 3.4 percent to 6.8 percent. As Members of the Congress we know what this will mean for students in our districts and what it will mean for colleges and universities in our Congressional Districts.
Some may try to tell you this bill does what President Obama proposed to do, but it does not. The President's proposal would have fixed the rate on student loans based on the actual Department of the Treasury's cost of borrowing. The Administration's plan would set the repayment costs for the entire life of the student loan, which would have created certainty for the borrower. The President's plan would tie student loan repayments to what graduates were earning after starting their careers. This would have supported a student's dream to become a teacher, social worker, artist, lawyer, doctor or engineer.
Finally, President Obama would extend these favorable loan options to those already in the workforce who still have student loan debt. Paying a reasonable rate that is fixed over the life of the loan and would be based on what you can afford to pay--that is what the President proposed, but this is not what this bill does.
The need for education from cradle to grave should be a national priority, not an afterthought. This is a bad bill that will not solve the problem of out of control student loan debt. For all of these reasons, I urge my Colleagues to join me in voting no on the Rule for H.R. 1911, and the underlying legislation.
American Association of
University Women,
Washington, DC, May 15, 2013.
Re Oppose the Smarter Solutions for Students Act (H.R. 1911)
Dear Representative: On behalf of the over 150,000
bipartisan members and supporters of the American Association
of University Women (AAUVV), I urge you to vote against the
Smarter Solutions for Students Act (H.R. 1911). While AAUW
supports preventing the doubling of interest rates on
subsidized Stafford loans, scheduled to occur on July 1st,
the Smarter Solutions for Students Act fails to provide
stability in borrowing for students, and would not ensure
that rates stay low in the foreseeable future.
With changes in the workforce over the century, higher
education is becoming less of a luxury and more of a
necessity. At current rates, the U.S. will add over 16
million jobs by the year 2020 that require at least some
postsecondary education. Moreover, the number of jobs
requiring a graduate degree is estimated to grow by at least
2.5 million by that same year. Since many students cannot pay
for their degrees out-of-pocket, student loans are an
important option and a worthwhile investment. College
graduates have fared better in the recent recession and
current recovery, and have higher wages and better job
prospects overall. Students rely on Stafford loans as a part
of the financial aid they use to finance higher education.
Subsidized Stafford loans are only offered to students with
demonstrated need. Specifically, about 30 percent of
undergraduates in 2007-08 received a subsidized Stafford
loan, and a majority of those recipients were women.
Many graduates struggle to repay their loans. Loan
repayment is an even more significant burden for women, who
earn less on average over the course of their lives than
their male counterparts. AAUW's research report, Graduating
to a Pay Gap: The Earnings of Women and Men One Year after
College Graduation, found that the median student loan debt
burden was slightly higher in 2009 for women than men. In
addition, among full-time workers who were repaying their
loans in 2009, nearly half (47 percent) of women one year
after college graduation were paying more than 8 percent of
their earnings toward student loan debt. Only 39 percent of
men were in the same position. Furthermore, just over half of
women (53 percent) and 39 percent of men, were paying a
greater percentage of their income toward student loan debt
than AAUW estimates a typical woman or man could afford.
Keeping interest rates low on student loans is important
and the Smarter Solutions for Students Act would fail to do
so. At the current interest rate of 3.4 percent the
government earns almost 12.5 cents per each dollar loaned in
the subsidized Stafford loan program. This underscores that
there is no reason rates should increase at all for students.
Under the Smarter Solutions for Students Act, over the next 3
years interest rates are projected to rise to as much at 7.36
percent. Not only would Fixed rates ensure that when students
borrow, they know upfront what their monthly repayment amount
will be, as the rate is consistent through repayment. AAUW
knows that this is a key component of ensuring students are
smart borrowers when it comes to financing their higher
education. If they must take out a loan, knowing the
repayment schedule of that loan is necessary for their
planning purposes.
Allowing the interest rates on subsidized Stafford loans to
double on July 1 would have a real impact on students. The
interest rate increase could mean as much as $1,000 in
additional debt. But, the Smarter Solutions
for Students Act is not a real solution. Under this proposal
interest rates would be projected to increase, and students
and graduates would be faced with annual uncertainty as their
rates at origination and during repayment would vary based on
the market. I urge you to vote against the Smarter Solutions
for Students Act (H.R. 1911). Votes associated with this
legislation may be scored in the AAUW Action Fund
Congressional Voting Record for the 113th Congress. If you
have any questions or need additional information, feel free
to contact me or Anne Hedgepeth, government relations
manager.
Sincerely,
Lisa M. Maatz,
Director,
Public Policy and Government Relations.