Violence Against Women Reauthorization Act of 2011-Motion to Proceed

Floor Speech

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Mr. REED. Mr. President, we are engaged in a very important debate while the clock is ticking on literally the future of the postal service.

I want to alert my colleagues to another issue that is rapidly approaching. On July 1, if we do not act, the interest rate on subsidized student loans will be doubling from 3.4 percent to 6.8 percent, impacting more than 7 million students, including more than 36,000 in Rhode Island.

I have introduced legislation--the Student Loan Affordability Act--to stop the doubling of student loan interest rates as of July 1 of this year. Many of my colleagues have already joined me, including Senators BEGICH, Sherrod Brown, DURBIN, FRANKEN, Tim Johnson, KLOBUCHAR, LEAHY, MURRAY, SANDERS, SCHUMER, STABENOW, WHITEHOUSE, and WYDEN, as cosponsors of the legislation. I thank them and urge all of my colleagues to join us in supporting this legislation.

If we don't act, the average borrower will have to pay approximately $2,800 more in interest on their loans. Students who take out the maximum $23,000 in subsidized student loans could owe approximately $5,000 more over the 10-year repayment period. Students and families simply cannot absorb these costs in this tough economy and in the face of rising tuition and dwindling State support for higher education.

This particular measure will hit middle-income families very hard because they are the ones who rely significantly on these subsidized student loans. The subsidized student loan program is a need-based financial aid program. To get the low rate and the in-school interest subsidy, students must demonstrate economic need. Nearly 60 percent of the dependent students who qualify for these loans come from families with incomes of less than $60,000. That is literally the middle class and the working poor of this country.

This is an issue of fairness. At a time, ironically, of historically low interest rates, when the Federal Reserve has set the target interest rate for Federal funds between 0 and .25 percent--the Fed is lending money to banks at near zero percent. We, at the same time, are asking middle-income families to pay twice as much, 6.8 percent--a huge discrepancy--in the loans they pay for education.

We also recognize--all of us--that the key to our future is an educated America. It seems that given the interest rate environment, where banks can get money overnight at near zero percent interest and we are telling students they have to pay 6.8, not 3.4, it doesn't make sense. It is in our national interest to ensure that students not only get educated but don't leave school with a mountain of debt.

We need more students graduating from our colleges, universities, and professional schools because that will power our economy in the future. We won't be globally competitive if we don't do this.

In 1980 the gap between the lifetime earnings of a college graduate and high school graduate was 40 percent. In 2010 it was 74 percent. By 2025 it is projected to be 96 percent. The message is clear: If you cannot get postsecondary education, you are virtually going to be condemned to being far behind in terms of income and ability to support your family. Researchers have found that since at least the 1980s, we haven't been producing a sufficient number of college-educated workers to meet the demand of industry. If you go to businesses throughout Rhode Island and the Nation, they will tell you they have jobs for which they cannot find the people with the high-level skills needed to fill them. So every available criterion argues strenuously for this legislation.

In Rhode Island, we have 41 percent of our working adults who have college degrees. By 2018 it is estimated that 61 percent of the jobs there will require some postsecondary education. We have a 20-percent gap that has already opened in the next 4 years, and we have to fill it. The wrong way to fill it is to make college more expensive.

I recently had a roundtable with all of the presidents of my universities and colleges in Rhode Island. They said that keeping this interest rate relatively low is absolutely critical. They are all worried about the fact that by July 1, unless we act, we will see a doubling of this interest rate.

Frankly, this is an issue that has had bipartisan support. In 2007, on a very strong, bipartisan basis, we enacted the College Cost Reduction and Access Act, cutting the interest rate from 6.8 to 3.4 percent. In the Senate, the legislation passed on a 79-to-12 vote, with more than two-thirds of Republican Senators--34 out of 49--supporting it. President George W. Bush signed it into law.

We have to revive, before July 1, that bipartisan spirit that motivated the initial legislation so that we can avoid doubling the interest rate college students will pay for these loans. It is a matter of major priorities for us--not just for a short time but for the future of the country. We have 75 days. The clock is ticking. We have to move. If we don't, millions of middle-class students and families will be denied the opportunity to effectively get a higher education.

I yield the floor.

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