Statements on Introduced Bills and Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - June 07, 2007)

By Mr. DURBIN:

S. 1561. A bill to amend title 11, United States Code, with respect to exceptions to discharge in bankruptcy for certain qualified educational loans; to the Committee on the Judiciary.

Mr. DURBIN. Mr. President, I would like to tell you about Connie Martin from Sycamore, IL. Connie's son decided to go to culinary school in Chicago 5 years ago at the age of 25. To pay for tuition, he borrowed $58,000 in private loans from Sallie Mae at 18 percent interest. His first payment was $1,100 a month--his entire monthly salary at a downtown eatery where he worked after graduation. His loan balance, including government-backed loans, is now $100,000. Connie's son has been working hard, and she and her husband have been trying to help him make the payments. I worry for borrowers like Connie's son who can't start over and will have debt that will likely haunt him for the rest of his life.

The Chicago Sun-Times recently ran a story that described the devastating effect large student loan debt has on the lives of borrowers. Mr. President, I ask unanimous consent that the following article from the Chicago Sun-Times be inserted for the Record.

Private student loans are the fastest growing and most profitable sector of the student loan industry. As college tuition continues to rise, the private loan market flourishes. According to the College Board, tuition, fees, room and board at public 4-year schools have risen by 42 percent over the past 5 years from $9,032 to $12,796. Add books, supplies, transportation and other living expenses, and the total increases to $16,357 for those paying instate tuition and $26,304 for those paying out-of-state tuition. Students rely on private loans to pay for any unmet need that Federal loans and grants fail to cover. According to the College Board, since 2001 the market for private student loans has grown at an annual rate of 27 percent to $17.3 billion in 2006--roughly 20 percent of total student borrowing. Ten years ago, only 5 percent of total education loan volume was in private loans.

Private student loans are more profitable than Federal student loans because lenders can charge whatever interest rate students will pay, barring State usury laws. The interest rates and fees on private loans can be as onerous as credit cards. There are reports of private loans with interest rates of at least 15 percent and often much higher. Unlike Federal student loans, there is no government-imposed loan limit on private loans and no regulation over the terms and cost of these loans.

Today, I am pleased to introduce a bill that will give students, who find themselves in dire financial straits, a chance at a new beginning. My bill takes the bankruptcy law, as it pertains to private student loans, back to where it was before the law was amended in 2005. Under this legislation, privately issued student loans will once again be dischargeable in bankruptcy. My bill also clarifies that existing protections are specific to loans that were issued by or are guaranteed by State and Federal Government.

Federally issued or guaranteed student loans have been protected during personal bankruptcy since 1978. This provision protects Federal investments in higher education. In 2005, a provision was added to law to protect the investments of private lenders participating in the student loan industry. This change in the law creates a couple of problems. First, extending protections to private lenders of student loans but not to other potential creditors who are at risk in a bankruptcy disposition is inherently unfair. Second, such protections are unfair to the debtor. Repayment schedules--with accumulating interest--can extend for decades.

With the 2005 protections in place, there is essentially no risk to lenders making high-cost private loans to people who may not be able to afford them. There is no risk to private lenders extending credit to students at schools with low graduation rates and even lower job placement rates.

Giving private loans such high status in bankruptcy also puts other creditors at a significant disadvantage. No one seems to know how or why private student loans gained this status in 2005. There is nothing in the Congressional Record explaining the reasons behind the change. Why should a private student loan lender be able to jump to the front of the creditor line--in front of the local furniture store or the neighborhood plumber? This bill seeks to restore treatment of privately issued student loans in bankruptcy to the same treatment as any other debt.

There is justification for making Federal loans hard to discharge: they are backed by taxpayer dollars, and they come with some borrower protections in cases of economic hardship, unemployment, death and disability. However, private loans involve only private profit and do not have the protections that government borrowers enjoy, including caps on interest rates, flexible repayment options, and limited cancellation rights. Why should student borrowers, who are trying to better themselves and our country, be treated in the same manner as people trying to escape child support payments, alimony, overdue taxes, and criminal fines?

The 1950s and 1960s saw the democratization of higher education. The GI Bill provided money for returning WWII veterans to attend college. The National Defense Education Act made college a possibility by making low-interest education loans available for countless students all across the country. Talented kids from working families began realizing the possibility of college, and enrollment at colleges swelled. But since then, college costs have gone through the roof. And students--heeding the call to obtain a good education--are also earning themselves years of debt. The average student is graduating with nearly $20,000 in debt and in many cases--much, much more--just look at Connie Martin's son. Our country has made great strides in making college a reality for countless students. Let's not reverse the positive trend we started over 50 years ago. That is why I am introducing this bill--to give students a chance at a fresh start.

Mr. President, I ask unanimous consent that the text of the bill and an article of support be printed in the Record.

There being no objection, the material was ordered to be printed in the Record, as follows:

S. 1561

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By Mr. DURBIN (for himself, Mr. Brownback, Mr. Dodd, Mr. Obama, Mr. Lieberman, Ms. Klobuchar, Ms. Mikulski, Mrs. Murray, Mr. Nelson of Florida, Mr. Wyden, and Mrs. Clinton):

S. 1563. A bill to require the disclosure of certain activities relating to the petroleum industry of Sudan, to increase the penalties for violations of sanctions provisions, and for other purposes; to the Committee on Banking, Housing, and Urban Affairs.

Mr. DURBIN. Mr. President, the suffering in Darfur and Sudan on the continent of Africa continues today as it has every day for too many years. I rise again to urge my colleagues that we must do more to end this crisis in Sudan. Two weeks ago, before the Memorial Day recess, I came to the floor to highlight some of the positive steps taken thus far by Congress, the Bush administration, the business community, and nonprofits to pressure the Sudanese regime to end this genocide. I said then and I will repeat today: We must do more.

In that speech I urged the President to follow through on what he promised to do in April at the Holocaust museum just down the street in Washington. To the President's credit, last week he took steps forward. He tightened United States economic sanctions on Sudan. He targeted sanctions against more individuals responsible for the violence, and he vowed to push for a strong new United Nations Security Council resolution that would further pressure the Sudanese regime. I applaud the President for his leadership. But I repeat, we must do more.

On March 28, as Treasury Secretary Paulson testified in front of the Appropriations subcommittee I chair, I asked the Secretary: What resources does the Treasury Department need to put more pressure on the Sudanese Government to end the genocide? His answer:

..... We'd like the flexibility to charge a larger fine, because $50,000 may not be enough.

He was talking about civil and criminal penalties that violators of American sanctions on Sudan should face and the fact that the current penalties are not much of a deterrent. It was a concrete suggestion from the administration, and I agreed to accept his challenge. Based on that testimony, more discussions with the Treasury Department, the Securities and Exchange Commission, the State Department, and other agencies, we created the Sudan Disclosure and Enforcement Act which I introduce today. This act provides the administration and all Americans with more resources and tools and information so we can each do our part to end the genocide and bring peace to Darfur. It creates real consequences for those who support the Sudanese regime and, perhaps most importantly, it requires the administration and Congress to meet in 90 days to reassess the steps that need to be taken to help to end the crisis.

For my colleagues who are considering supporting this legislation, here is what the bill will do in specifics: first, express the sense of Congress that the international community should continue to bring pressure against the Government of Sudan to convince that regime that the world would not allow this crisis to continue; second, authorize greater resources for the Office of
Foreign Assets Control within the Department of the Treasury to strengthen its capabilities in tracking Sudanese economic activity and pursuing sanctions violators; third, require more detailed SEC disclosures by United States listed companies that operate in the Sudanese petroleum sector so investors can make informed decisions regarding divestment from these companies; fourth, dramatically increase civil and criminal penalties for violating American economic sanctions to create a true deterrent against transacting with barred Sudanese companies; fifth, require the administration to report on the effectiveness of the current sanctions regime and recommend other steps Congress could take to help end the crisis.

I am proud to introduce this legislation with bipartisan support. I particularly thank the ranking member of the Financial Services and General Government Appropriations Subcommittee, my friend and colleague Senator SAM BROWNBACK of Kansas, for all of his great work on this issue. I am pleased to be joined by all of the other original cosponsors as well: Senators DODD, who also chairs the Banking Committee and is a great ally; Senators KLOBUCHAR, MIKULSKI, BILL NELSON, OBAMA, and WYDEN.

I urge all my colleagues on both sides of the aisle to join this effort. As we move around our States and visit parts of the country, occasionally a person will come up after a meeting and say to me: Senator, what are you doing about Darfur? Didn't your country, America, declare a genocide? What are you doing?

Frankly, aside from speeches on the floor and an occasional resolution, bills of very little consequence, there hasn't been much to point to. I hope my colleagues who face that same question and worry that the response is so inadequate will take a good look at this legislation. I hope they will join me in cosponsoring this effort. We should pass this measure, work with our House colleagues and do the same, send this bill to the President. The President said in April:

You who have survived evil know that the only way to defeat it is to look it in the face and not back down. It is evil that we are now seeing in Sudan, and we're not going to back down.

The President went on to say:

No one who sees these pictures can doubt that genocide is the only word for what is happening in Darfur and that we have a moral obligation to stop it.

I completely agree with the President. It has been more than 2 1/2 years since the President called what is taking place in Darfur, Sudan by its rightful name--genocide. Yet even as an estimated 200,000 to 400,000 people have been killed, even as over 2 million men, women, and tiny children have been forced from their homes by violence and killing, even as the violence continues as we meet in the safety and comfort of this great Nation, America and the entire international community have not done enough to help. We must do more. This bill moves in the right direction. It gives our Government the tools and the encouragement to act and act quickly.

I urge my colleagues to support it.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be printed in the Record, as follows:

S. 1563

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Mr. DURBIN. Mr. President, Abraham Lincoln once said, ``The declaration that `all men are created equal' is the great fundamental principle upon which our free institutions rest.''

As a Senator representing the distinguished land of Lincoln, I take seriously our Nation's promise for equality, particularly when it comes to health care.

I rise today as a strong and proud cosponsor of the Minority Health Improvement and Health Disparity Elimination Act of 2007--an important piece of legislation, long in the making, and long overdue.

Not since 2000 has our Congress made a concerted effort to address the health of some of our most at-risk populations--people of color.

In these 7 years, we have not seen a substantial improvement in the health status of people of color.

Cervical cancer, a disease that can be greatly reduced by effective health care, is five times more common among Vietnamese women in the United States than it is among Caucasian women.

African Americans with diabetes are seven times more likely to have amputations and develop kidney failure than are Caucasians with diabetes.

In Chicago's Latino community, you will likely find one in two Latino children who are obese, a condition that often leads to the onset of diabetes.

In the hospitals of East St. Louis, it's likely that African-American babies die at more than double the rate of White infants.

In the small town of Cairo, families have to travel hours to other parts of the State and sometimes even to other States to obtain the right care.

In general, we are making progress in prolonging life. Death rates for Whites, African Americans, and Latinos from many of our most debilitating diseases have declined during the last decade. But what progress are we making on quality of life during those extra years? Is the answer different depending on the racial or ethnic minority groups? Simply speaking, yes.

Even when controlling for insurance coverage and economic status, racial and ethnic minorities tend to have less access to health care and a lower quality of health care than their Caucasian counterparts.

The Centers for Disease Control and Prevention has reported that, among a wide range of health indicators, ``relatively little progress has been made toward the goal of eliminating racial/ethnic disparities.''

In general, yes, Americans are healthier, but the shameful gaps between minority groups and Caucasians remain nearly the same as a decade ago.

When will we as a nation demand more and work harder to reach that ideal of equality that is a pillar of our Nation's moral strength?

This legislation is a critical step toward achieving that notion of equality: the belief that we are all created equal and as such should have equal access to quality care.

Why is it that this country spends so much more than any other industrialized country on its health care, but has consistently lagged behind other countries in delivering better health outcomes? Why is it that one in six Americans, almost one in three African Americans, almost one in two Latino Americans, are uninsured? Why do our health outcomes not reflect the $2 trillion investment we make in health care each year? There is a disconnect between the rhetoric around our Nation's health crisis and where our resources are placed. It is a shame, and we can do better.

Our health workforce should reflect, understand, and respect the backgrounds, experiences, and perspectives of the people it serves. We need to recruit, train and retain health care professionals from underrepresented groups and underserved areas.

In areas like downstate Illinois, small communities rely heavily on Federal incentives, such as loan repayment, the Health Careers Opportunity Program, and Centers of Excellence to create a critical pipeline of professionals.

Graduates of title VII programs are more likely to serve in underserved areas. That is the outcome we want, so we need to support successful programs like these.

In addition to improving the diversity of our workforce, we need to redouble efforts to fight diseases that disproportionately affect racial and ethnic minorities--diseases like diabetes, heart disease, breast cancer and so many others.

To accurately respond to the presence of health care disparities and try to address them, we need better data on health care access and utilization that includes race, ethnicity, primary language, and socio-economic status. To develop accurate solutions, we need accurate information on prevalence, contributing factors, and effects of health care disparities.

The Minority Health Improvement and Health Disparity Elimination Act of 2007 is a critically important step toward improving the access, workforce, research and information that will close the color gap that exists in health care today. I look forward to working with my colleagues to improve the health of all Americans and, specifically, to eliminate health disparities that hurt our communities of color, and all of us.

I did not always agree with the former majority leader, Senator William H. Frist, but I couldn't agree more with his statement that, ``Inequity is a cancer that can no longer be allowed to fester in health care.''

I urge my colleagues to support the health disparity legislation introduced today.

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