Stop the Student Loan Interest Rate Hike Act of 2012--Motion to Proceed--Continued
Floor Speech
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Mr. SCHUMER. Madam President, I am speaking today on the need to Stop the Student Loan Interest Rate Hike Act of 2012.
It is obvious how hard it is to pay for college these days. It is not just hard for poor people--and we have some programs that help poor people out at the Federal level, Pell grants in particular, and that is a good thing. But you can be making well above the Pell grant allowance level, well above the income that you need for a Pell grant, and have a difficult time paying for college.
College is extremely expensive. The average private college cost a year is over $30,000, and the average public cost has gone way up. With all the cutbacks at all the Federal, State, and local levels, it is about $17,000. If you figure that if you are an average family anywhere in America making $65,000 or $70,000, $17,000 a year after you pay your taxes and pay your mortgage and pay for the necessities of life is a heck of a lot of money. Wisely, the Federal Government has provided some loans. A few years ago, under the leadership of Senator Kennedy, we decided to have the Federal Government pay for those loans because when the banks did it, it ended up being far more expensive than it had to be. Those loans were originally 6.8 percent around when the banks did it. They went down and down, and they settled to a nice level of 3.4 percent.
Now 3.4 percent is still interest. Particularly these days it is not such a low rate of interest given that the cost of money is quite low, but it is a lot better than 6.8 percent. But, unfortunately, the law that Senator Kennedy shepherded and many of us voted for and President Bush signed--I believe it was in 2007--expires come July 1.
What will that mean? That will mean millions of students throughout America will pay a lot more interest on the loans that are a necessity for going to college.
We all know how important college is. We all know these days the statistics show that the unemployment rate among college grads is one-third that of high school grads. We know that at your income level, you make thousands of dollars more each year if you have a college degree. There was a recent study that even showed you live longer if you got to college. I don't know what the correlation was, but it was a broad-based study. It was trumpeted in many of our leading newspapers. So a college degree is very important, and one of the ways we measure America versus other countries in terms of our future is what is the percentage of our kids who get a college degree. Unfortunately, that has been declining. We used to be first. Now I don't think we are even tenth, and it is declining because of the cost of college. So a high interest rate on top of the basic cost--$17,000, $36,000, whatever--is bad for students, bad for their families, and, frankly, bad for America.
In New York, my State, 423,000 college students would pay $341 million more in loan payments if we didn't pass this legislation.
I would say one other thing, and that is that this affects almost all college students. You say, Well, I started college last year and I am at 3.4. You are at 3.4 for your freshman year if you are a freshman in college. But when you go to your sophomore year and renew your loans July 1, you are going right up to 6.8 percent. So it affects everybody in college except--luckily for them--the senior class that is graduating this year.
It will also affect the new class of freshmen who are coming in, and I would bet many of them are watching this debate and deciding whether they can go to college or they can go to the college of their choice--one that they deserve to go to because of their grades and record and accomplishments--based on this bill. And so, wisely, Senator Jack Reed and Senator Tom Harkin and Senator Sherrod Brown have put in legislation that would keep the rate at 3.4 percent.
When they first did this--and President Obama has been fully supportive and he has talked about this at length on campuses throughout America and in other places throughout America. When they put it in, amazingly enough most of our Republican colleagues, in places such as the Club for Growth and American Enterprise Institute, said: We are against it. Let the students pay 6.8 percent. That was sort of the 21st century analog of Marie Antoinette saying, Let them eat cake, because in these days college is much more of a necessity than it ever used to be, even for jobs like machine welder or auto mechanic. These days, our cars are filled with computers and you often need some college education, at least a 2-year college education, to be proficient in skills that maybe 40 years ago you just needed a wrench for. So it was amazing to me that so many of our colleagues on the other side of the aisle said they were against keeping the rate at 3.4 percent.
They began to get a lot of flak, I am sure, from families across the country. So they decided they couldn't be against it, per se, and so in the House they actually--and the President was making a lot of hay with this and scoring a lot of points. So over in the House they then decided, Okay, we can't say we are against this. Of course, we all want to pay for it, and so we will propose a bill that pays for it by cutting preventive services in health care.
There are two points about that. One, our preventive services in health care are needed, whether it is child immunization, whether it is diabetes prevention--the fastest growing disease around--whether it is mammograms which wouldn't start this year but would start next year as a result of the prevention money--prevention is vital to keeping health care costs down and keeping America healthy.
To say the only way we will give you student loans is to take away preventive health care is akin to telling a family: Your little grandson cannot get immunizations if you want your children to be able to pay for their college. It does not make sense and everyone knew it.
The second point is everyone knew it at the time. I don't think there was a person in this town who thought that paying for it by cutting prevention would have a chance in this body. But, frankly, I think that is what some of my colleagues in the other body wanted. Their MO for the last year and a half has been obstruct without fingerprints. In other words, they want to obstruct everything. They want the government to be a mess. They want people to be unhappy so they will change things in the election.
But they know, if they are caught obstructing, it is not going to work out too well for them. In the first half of this year, I have to give them credit, they carried out this strategy of obstruction without fingerprints quite well. Part of it is because the media likes to say ``on the one hand, on the other hand.'' There is a very good article, tangential to this, by Norm Ornstein at the American Enterprise Institute and Thomas Mann, a senior fellow at the Brookings Institution, one from a conservative group and one a more liberal group, which basically laid this out.
In the second half of the last year and now this year their little strategy of obstructing without fingerprints is not working. It didn't work on the debt ceiling. It didn't work on the payroll tax cut. It didn't work on the highway bill. It didn't work on the postal bill, and, ``gloriosky,'' we are passing legislation because they can no longer obstruct without fingerprints. Faced with the choice of being caught obstructing or not obstructing, they stopped obstructing. Good for America. Good for bipartisanship. If it was good for them on the other side, fine.
On this one, they are back to their old ways because they put in this pay-for they know cannot pass. What was the pay-for we put in? We thought it would pass. We thought it had bipartisan support. It was one of the things considered in various groups in committees, bipartisan, on how to pay for the deficit. I think this was considered in the August group of last year.
What we say is simply this. If you are a partnership--a big law firm, accounting firm--there are some of them, a small number, not most, most did it the right way, but they want to avoid the payroll tax. How do they do it? They say we are giving our partners dividends as opposed to salaries, and they do not pay a payroll tax, the payroll tax we all pay up to the first hundred-and-some-odd thousand dollars of salary.
That seems reasonable and fair. It was a loophole. It was called a loophole when John Edwards was caught doing it in his law firm, by Rush Limbaugh, by others as well--many conservatives. They called it a loophole that ought to be closed. I wish I had the language.
I will ask unanimous consent to add to the Record the language of several leading conservative commentators and gurus about what a loophole this was.
Anyway, we put this in and we thought they would accept it. Of course, to our surprise last night not a single Republican voted to move forward and debate this bill. We will let them put their pay-for on the floor to substitute for ours. They are not even willing to do that. Leader Reid said this over and over. I just heard him say it at 2:15 when we had a little gathering by the Ohio Clock.
We are here on the floor tonight, and I see the Senator from Ohio and the Senator from Maryland--we are here on the floor tonight to ask families and students throughout America to let their Senators know they want this legislation passed and they want the games to stop.
On my Facebook page, and on the Facebook page of many of my colleagues, is a description of the bill, of what people need to do. We ask people to send us, on our Facebook pages, their stories--why they need it, why it is so important to them. Senator Jeff Merkley already read a letter from a student from Oregon. Senator Stabenow got over 70 responses already of students from Michigan. We also hope they let our colleagues on the other side of the aisle know how important it is they vote for this bill.
The bottom line is simple. This should be a no-brainer. If there were ever an example of Washington tying itself in a knot, this is the issue. If our colleagues on the other side of the aisle have other pay-fors, we will take a look at them--but make them real. Make them truly subject to bipartisan compromise as opposed to something they know we cannot accept.
I heard the Senator from Massachusetts, Mr. Brown, introduced something, but the CBO scored it as not bringing in any money. We have all agreed we should not increase the deficit to do this and we should find a way to pay for it. Our preferred way is closing a loophole that everyone admits is abusive and a way to get around the payroll tax. But we are willing to sit and listen to other suggestions from the other side of the aisle so we can help our college students.
The bottom line is we have to pass this bill. It is an extremely important bill for the future of our country because every time a young man or a young woman deserves to go to a college of their choice and doesn't go, goes to a different one that less suits their needs because they cannot afford it, they lose, their family loses, and America loses. Let's stop the games. Let's come together. Let's pass this bill, and let's make sure students of this and future generations are able to afford the college education that is so important to a better future for their lives.
I yield the floor.
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