Madam President, I want to speak for just a few minutes in favor of the Bank on Students Emergency Loan Refinancing Act, which is the measure before the Senate now, also referred to as the Fair Shot for College Affordability. We have been…
Madam President, I want to speak for just a few minutes in favor of the Bank on Students Emergency Loan Refinancing Act, which is the measure before the Senate now, also referred to as the Fair Shot for College Affordability.
We have been calling this agenda a fair shot, but let's be honest about it. It is just plain common sense. I do not want to go any further without thanking the present occupant of the chair, the distinguished Senator from Massachusetts, for her dynamic and great leadership on this issue and on these kinds of issues that affect college affordability, and especially this overburdensome student debt that is hanging not only over students but over our entire country.
There are some things, as I said, that are just plain common sense. Raising the minimum wage is good for American workers. It increases aggregate demand, and it will increase GDP. It is common sense. Equal pay for equal work is the right thing to do for women. It is common sense. And this bill that lets struggling student loan borrowers refinance their loans is not only good for them but also good for our country and good for our economy.
Families across the country are struggling with student loan debt. It is not only holding them back personally, it is holding us back as a nation. It is holding them back from buying homes and starting families. It is holding back doctors from practicing primary care. It is hurting people trying to save for retirement. It is hurting rural communities that are working to attract doctors or lawyers or veterinarians or whatever.
But you need not take my word for it. Some of the Nation's most prominent economic officials have raised concerns over this student debt issue. Members of the Federal Reserve Board's Federal Open Market Committee, in March 2013--over a year ago--expressed concern that ``the high level of student debt'' is a risk to aggregate household spending over the next 3 years. The Treasury Department's Office of Financial Research has stated that student debt ``could significantly depress demand for mortgage credit and dampen consumption''--again, a drag on our economy. New York Fed president William Dudley told reporters in November of last year: ``People can have trouble with the student loan debt burden--unable to buy cars, unable to buy homes. . . .''
So I am pleased to see that President Obama has taken action to ease the burden of Federal student loan debt for some struggling borrowers. I am also pleased to see the administration is taking critical steps to ensure that servicemembers are getting the benefits they have earned through their service to our country. But it is very clear that much more needs to be done. That is why this bill before us is so important. It will provide relief to student borrowers who took out loans several years ago only to see the rates for student loans have since gone down.
Some Senators may remember this issue presented itself last year. So as the chair of the authorizing committee, I worked with Members on both sides of the aisle and with the administration--we had meetings in the White House--to pass the Bipartisan Student Loan Certainty Act, which lowered interest rates and also authorized the interest rates at 3.86 percent last year for undergraduates, 5.41 percent for Stafford loans for graduate students, and 6.41 percent for parent and graduate PLUS loan borrowers. We want borrowers who may have taken out loans in the past with higher rates to take advantage of these lower rates.
The Department of Education estimates that 25 million borrowers would likely refinance their existing student loans under this legislation. It will save them money. It will give them money in their pockets where they can now go out and start buying things and increase what we need to have done in our country, which is aggregate demand.
The legislation also allows student loan borrowers to refinance their private loans into the Federal program--very important.
The bill provides those who meet certain eligibility requirements and who are in good standing have the option of refinancing their high- interest private loans down to rates offered to new Federal student loan borrowers this year. Those who refinance will also have access to the benefits and protections of the Federal student loan program.
As I said, this bill is just common sense. American consumers have been able to take advantage of historically low interest rates on their homes, their cars. I have heard a number of speakers who have come out here and said: If you had a high-interest loan on your 25-year or 30- year house mortgage, and you could come in and refinance down to 5 percent, sometimes even less than that, you would be foolish not to do it. You can do it. We should not let students do the same thing? It is good for them and good for the economy.
Again, I want to say that while this issue of student debt is critically important, by no means is it the only issue that deserves our attention in higher education policy. Right now I think maybe the most critical, simply because of the huge debt burden overhanging our students--I should say our former students and their families, but there are some other things we have to pay attention to.
In the coming days I plan to release from our committee, release from the chairman's mark, the issue we should be attacking in a comprehensive reauthorization of the Higher Education Act. Our committee over the last several months has held more than 10 hearings on issues ranging from teacher preparation to accreditation. These hearings have been bipartisan. I want to thank Senator Alexander for his partnership in making sure we had good hearings.
As we move forward, our committee is committed to remaining on a bipartisan path for us taking up a Higher Education Act reauthorization. What I plan to put forward is consistent with that bipartisan approach. It simply provides clear guidelines based on the work we have done already. The Higher Education Act we will be coming forward with in the next few weeks will cover basically four topics: 1, affordability; 2, student debt; 3, accountability; and, 4, transparency. As it relates to affordability, we hope to increase affordability and reduce college costs on the front end by entering into a partnership with States, incentivizing States that make strong investments in their systems of higher education.
The one thing that came through in our hearings on why tuition has gone up so much and college costs have gone up so much for students and their families over the last 20 to 30 years--well, there are a lot of indices of why that has happened, but the single largest factor has been over the last 20 to 30 years the decrease in States investing in higher education.
What has happened is State legislatures figured it out. They quit putting more money into higher education. The schools raised their tuition, and the students come to the Federal Government or the private sector and borrow the money to go to school. States have abdicated their responsibility in higher education. We plan to offer incentives for States that step up to the bar and then provide more vigorous funding for higher education, that they will get better support from the Federal Government.
With student debt, we plan to help student borrowers better manage their loan debt through measures such as better upfront and exit counseling on their loans. Again, I hope that tomorrow we would pass our bill, the bill Senator Warren has worked so hard on and championed. I hope we would pass it and get it behind us. But I fully intend to take the measures in that bill and incorporate them into our broader bill on student debt.
On accountability, we plan to hold schools more accountable to both students and taxpayers by ensuring that no Federal money that goes to students who then go to the schools is used for things such as marketing, advertising. They use it to drive up enrollments. No. If schools want to do that, under our proposal they would not do that with taxpayers' money.
On transparency, we hope to empower students and families by giving them better information from the beginning of the college process in how
they select the school all the way through making sure they know all of their repayment options when they graduate and can make the right choice for their particular circumstances.
What we need is a good comparison. If a student wants to go to college A, they can go online, they can find out what the costs are for a credit hour, what the tuition is, other forms of information on what they can expect from that school--graduation rates, time to graduate, all kinds of things such as that.
They can hit the compare button, then go to college B. They can ask the same questions of college B, hit the compare button, go to college C. Then you can bring up and compare all of these schools. I think students and their families would make wiser decisions if they could compare one school to another. That is hard to do today, almost impossible to do today. But that is the kind of transparency parents and children and families need to have.
I look forward to sharing that proposal, as I said, in the next few weeks. I state publicly: Anyone who has ideas on this and would like to have them incorporated in our bill, please come to our staff or see me. We will try to work it through. As I said, I do want to approach this on a bipartisan basis and work this out. Higher education is too important to our society, to our future as a country, to be a partisan type of approach. It has to be bipartisan.
College affordability, skyrocketing student debt, accountability, transparency, all are very high-stakes issues for our students and their families and for our future as a country. Certainly in today's difficult economy, with young Americans in particular struggling to find good employment and a foothold in life, it is unacceptable to ask students, graduates, and their families to shoulder unnecessarily high student loan interest payments.
That is why this bill is so important for us to pass tomorrow, I guess, when it comes up for a vote. I hope we can pass this, and then I hope we can move on with the rest of what we need to do in higher education, as I said, on accountability, on transparency, and affordability. If we can get a good vote and pass this student debt bill so we can start lowering interest rates, that would be the first step toward addressing the issues confronting us in higher education. I hope we can get bipartisan support for this measure tomorrow and then move on to the other issues we have to address in higher education.
I yield the floor.