Congressional Progressive Caucus

Floor Speech

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Mr. POCAN. I rise today on behalf of the Congressional Progressive Caucus.

The Congressional Progressive Caucus has been fighting for economic fairness for the middle class and those striving to be in the middle class for this entire country. Today, we would like to talk specifically about the growing, skyrocketing student debt that we have in this country.

Just this past weekend, 6,200 students graduated from the flagship university in my State, my alma mater, UW-Madison. These young people leave Madison with new friends, new skills, new knowledge, and, most importantly, access to increased economic opportunity through their college diploma.

Students with a bachelor's degree have half the unemployment rate of those with a high school degree. In 2012, students with a bachelor's degree earned almost 80 percent more than someone with a high school diploma in a similar position. Unfortunately, these students are also leaving college with something else: unprecedented levels of student loan debt.

The drastically increasing student loan debt held by Americans across the country can be considered nothing less than a crisis. Not a looming crisis, but an urgent, already-here crisis. Total student debt in this country now tops $1 trillion. That exceeds all the credit card debt in this country. And that's up from just $200 billion in 2000, just 12 1/2 years ago. Every second in America, total student debt increases by $2,854. According to the New York Federal Reserve, total student debt has tripled over the last 8 years, representing a 70 percent increase in both the number of people with debt and the average debt held per person.

About two-thirds of the class of 2011 graduated with student debt. Their average debt was more than $26,000. In my home State of Wisconsin, the weight of student loan debt is severely affecting college graduates' ability to support themselves and their families.

There's an organization in Wisconsin that I want to give a little thanks and credit to. One Wisconsin Now is a progressive think tank run by Scot Ross. This organization has made it one of their leading efforts to talk about rising students debt and the trillion-dollar debt that we have and what it's doing to our economy. Thanks to them, I have some stories and figures to share specific to Wisconsin, and nationwide.

According to one study from One Wisconsin, the average monthly payment made by Wisconsinites with a bachelor's or advanced degree is nearly $400 a month. It's $388, to be exact. Let's put it in this perspective. Before someone can pay their rent or their mortgage, their utilities, their groceries, child care, they already owe $400 in student loans. If they're lucky, they'll have some funds left over to save for retirement.

Because of these exorbitant rates, it will take the average citizen in my State almost 19 years to pay off their student loan debt from a 4-year university.

There are some long-term economic effects to this. The effects of the skyrocketing costs are twofold:

Number one, at a time when a college degree is more important than ever to obtain reliable employment, we are in grave danger of pricing too many of our young students out of a college education. These drastic increases in tuition have occurred at the same time that we have seen the worst economic downturn since the Great Depression.

We know that to compete for the jobs of the 21st century and to thrive in a global economy, we need a growing, skilled, and educated workforce, particularly in the areas of science, technology, engineering, and math.

It is estimated that the U.S. will need 22 million more college-educated workers by the year 2018. Currently, driven partly by rising college costs, we are expected to fall short by 3 million workers. Our colleges and universities such as UW-Madison and Beloit College and others in my district have the talented faculty to produce our 21st-century workforce, but they need the students to teach and train. And an unaffordable college education is an unaffordable future for our country.

In the short term, we also see these effects on our economy. As students become more and more bogged down with high student loan debt, they're understandably reducing their expenditures in our current economy. According to one study by One Wisconsin, due to the high burdens put on students from their loans, new car purchases in our State are reduced by more than $200 million annually, and that's just in the State of Wisconsin. Meanwhile, households with student loan debt are overwhelmingly more likely to rent a home than to own a home, affecting home sales throughout America.

Owning a home, buying a car--these aren't just typical byproducts of the American Dream. These are important components of our country's overall economic health. If our economy is to recover--not just in Wisconsin, but across the country--we need to see strength in these two markets.

So we find ourselves at a crossroads. Instead of providing an enriched and educational background and advanced economic opportunity for our young people, a college education is increasingly trapping students in endless debt, preventing them from advancing economically and contributing to our economy.

If we continue to believe that an accessible, affordable, and quality education should be a national priority, that it is critical to our future economic prosperity, then we need to come up with a long-term plan to manage the skyrocketing costs of education.

Now, Democrats have already done a number of efforts in these area. We've tried to increase the maximum Pell Grant from $4,050 in 2014 to $5,645 in 2016. We have increased income-based repayment programs to ensure that graduates can manage loan repayments during stressed economic times. We have tried to create the American Opportunity Tax Credit, providing a maximum of $2,500 tuition tax credits to eligible families and students. We have provided loan forgiveness for graduates in public interest careers after 10 years of payments, and for everybody else after 25 years of payments. And we have required schools to give an online calculator so that students and families can estimate their costs based on their family's financial condition.

But we need to and we must do more over the long run. We can restore consumer protections for our students. We can increase our funding for higher education. And we can reauthorize the Higher Education Act and protect programs like Pell Grants that support low-income students attending college.

But as we all know, we have a pressing issue facing our body right now that will affect students who live in every single one of our districts. Unless we take action, on July 1 interest rates on subsidized Stafford loans will double, from 3.4 percent to 6.8 percent. If we do nothing at a time when our country is still facing a steep economic recovery, 7 million low- and middle-income students nationwide will see their student loan rates increase. That's 7 million people in this country will have their rates increase on student loans. That will wind up costing student borrowers $1,000 more a year. If we do nothing, that will add $4.3 billion to students' debt burden in just 1 year alone. Quite simply, we cannot afford to do nothing. Allowing these interest rates to double would represent a dereliction of our duties.

Right now, banks can receive loans from the Federal Reserve at historically low levels, less than 1 percent. If banks can receive such loans, shouldn't we protect lower loans for our students who are struggling in today's economy more than anyone else?

Last year, before I arrived in Washington, Congress extended the 3.4 percent rate for 1 full year. There are a number of bills right now--including those introduced by my Democratic colleagues--that would extend the 3.4 percent rate by at least 1 year, if not more. But we must take action now before we risk drowning our future workforce in even more student loan debt.

Now, this body, this House tomorrow will be taking up a measure, H.R. 1911, the ``Make College More Expensive Act.'' Unfortunately, the legislation this body will consider, instead of providing needed relief for our students, will instead only make college more expensive for millions of young people and their families across the country.

As I mentioned, if we don't act by July 1, interest rates on subsidized student loans will double, from 3.4 percent to 6.8 percent. The Republican legislation that we have before us tomorrow would be even worse for students than if we did nothing at all.

By tying Federal student loan rates to the 10-year Treasury note, the interest rate for a student entering college next year will be reset every year he or she is in college. Why is that a problem? Well, because by the time next year's freshmen graduate and start repaying their loans in the year 2017, the interest rate that freshman had on his or her first loan that first year of college is projected to more than double today's current rate for subsidized Stafford loans.

In practical terms, what that means over the long run is a student who is about to enroll in their first year of college will pay higher interest rates under the Republican plan than if Congress lets the current rates double. Again, this bill is even more damaging than if we do nothing--which we should do as a body.

According to the nonpartisan Congressional Research Service, students who borrow the maximum amount of Stafford loans over 5 years will pay $1,300 more in interest rates under the Republican plan before this body tomorrow than if we allow those rates to double and nearly $6,000 more than if we kept the rates at 3.4 percent. The overall cost to students and families would be $4 billion in additional interest payments over the next decade compared to our current law.

Let me repeat that: if we pass H.R. 1911, it will cost our students and families $4 billion more over the next 10 years than if we keep the law the way it is.

These facts don't lie. The bill does not make college more affordable; it does just the opposite. It worsens the student debt crisis that we should be working to solve. And this is just another case of mistaken priorities and misguided plans.

While the Democrats are working hard to even the playing field, Republicans would make it even harder for the average American to be able to afford college.

H.R. 1911 imposes a long-term financial burden on young people looking to pursue higher education. It will put $4 billion additional in student debt over the next decade that would have been used otherwise to help pay down our deficit. This is not a sustainable, balanced way to deal with our deficit; and it's certainly no way to ensure a thriving future for the next generation of America.

We've seen time and time again how student debt stifles our economy. We cannot afford to make college more expensive for the very Americans trying to get that education.

I am very pleased to be joined by another freshman Member of this body, a Representative from the State of New York who is the author of one of these bills that will make sure that we keep that interest rate at 3.4 percent and not allow it to double on July 1. I would like, Mr. Speaker, to yield to the gentleman from New York (Mr. Jeffries).

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Mr. POCAN. Thank you, Representative Jeffries, for your leadership on this issue and for your bill, which I am very proud to be a cosponsor of. I think that it's fair to say that college students and aspiring college students, not just in New York but across the country, owe you a good kind of debt for the work that you're doing. Thank you so much for continuing to expose what we need to expose, which is that the bill before this body tomorrow will cost $10,000 in interest more than it has to. It is worse than if we simply did nothing and let the loans double on July 1. We need to act. We have bills, like Representative Jeffries' bill, with which to do that.

I would like to share one story from One Wisconsin Now, and then I'd like to introduce another colleague of mine. Onewisconsinnow.org has collected these stories, and this is a story from a woman named Alexandra who is in my district. Let me read what she says:

I am 27, and my student loans forbid me from living in a safe neighborhood. I have to live where there is cheap housing, and must live with a roommate. I can't afford a car payment, and don't have one. I live paycheck to paycheck, and virtually save no money. I have a great job, one that I worked very hard to get, and three-quarters of my entire paycheck go towards my student loan payments. I live every day worrying that, someday, my student loans are going to get the best of me financially. I am very close to defaulting on my loans. I fear never having the opportunity to buy a house or a car, invest or have a savings account, have a family or pay for my children's education. I fear the thought of merely surviving. I have to live with the fact that this will likely be my life for the next 20 years.

Alexandra, thank you so much for sharing your story with One Wisconsin Now so we can share it here today. You're not alone. I have a lot of stories from people in Wisconsin who have shared the exact same story. With the current pace we're on, if we don't fix student loans and the cost of education, we are going to put so much extra burden on your generation and the next generation that, again, you will not have the opportunities that many of us have had towards buying a car, buying a home, getting your family jump-started. So this is a crisis. It's a real crisis right now, and we need to address that.

I have another colleague to whom I would like to yield. Representative Matt Cartwright is another one of our freshmen from Pennsylvania. He is also the freshman class president for the Democrats, taking on a leadership role among our body, and he has been an outspoken advocate for the middle class in this country and especially for those voices in Pennsylvania.

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Mr. POCAN. Thank you, Representative Cartwright. And thank you for your leadership on the Truth in Tuition bill. How apropos to be H.R. 2020, to give a good direct vision on the reality of costs in higher education.

I can say one thing from being a State legislator for 14 years before I came here. I served during the period when the Federal economy collapsed and States had less and less money to invest in public universities. So often you hear about the rising costs in private universities, but even in a system like UW, Wisconsin, which is one of the premium, world-class university systems, the costs have gone up enough that it's harder and harder for that average person to be able to afford the education. So if they rely on the loans and the interest rates double or, worse yet, we pass H.R. 1911 and make them increase even more, you're taking that affordability out of even more people's hands.

I just want to share a very short story, another story from someone who posted it on my Facebook page, and then I'd like to introduce another person on this issue.

I asked for comments on a Facebook page, and I got a comment from a woman named Amber. It is short, but it is poignant.

I haven't yet started paying back my loans. I graduate in July. And as a single parent, I am terrified I will have to choose between feeding my children and paying my loans. My children will come first, but it still worries me that I'll be strapped beyond what I can make at work.

This is unfortunately what we are doing to the people who are currently graduating from higher institutes of education across the country.

Next I would like to yield some time to a very experienced colleague of mine, a well-respected colleague, a leader among progressives in this body, currently the cochair of the Congressional Progressive Caucus and an outstanding legislator from the neighboring State of Minnesota. I would like to yield some time to Mr. Keith Ellison from Minnesota.

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Mr. POCAN. Thank you very much, Representative Ellison. Your leadership for many years in this body has been well appreciated. I want to thank you for bringing back really the central theme of the Congressional Progressive Caucus. When we had a budget, it was the back-to-work budget. It's about fighting on behalf of the middle class. We saw the Republican budget in this House balance the budget on the backs of the middle class. But our budget had the back of the middle class and those aspiring to be in the middle class. And one of those fundamental equalizers is that opportunity to get a higher education, to advance in society, to change your economic outlook.

I grew up in a lower middle class family. I not only had student loans, I also had Pell Grants. I was fortunate. But back when I went to college, you were still able to pay back your loans often in about a 5-year period. But more and more, it's a 10-year, 20-year payment back in order to be able to afford those rising student costs, and that is taking a bite not only out of the current economy, but out of the opportunities for those people getting those degrees so they can improve their lives and their family's lives and rise either into the middle class or to better their lives overall.

So the Congressional Progressive Caucus has had this as a central focus: How can we help lift those in poverty to the middle class and help those in the middle class to have every chance at opportunity that they should have? Those student loans are a crucial part of that. If we let this bill pass, H.R. 1911, tomorrow, in this body, we will put a financial burden on the backs of those who need it the most, those who are taking out loans to afford college. And if we do nothing as a body, the interest rate will double from 3.4 percent to 6.8 percent come July 1. Congress has to act.

Now this body has been able to vote 37 times to try to repeal the Affordable Care Act and the benefits to America's families from the Affordable Care Act--37 times--yet we have not found a way yet to fix the student loan crisis, and we simply need to do that. And that's why the Progressive Caucus is fighting so hard to do that.

I would like to close with one final story. Again, One Wisconsin Now had collected some stories, and this is from a woman from Wisconsin named Diana. Let me read her story:

I graduated from a 4-year college in 2006. Today, 7 years later, my loan payments are over $600 per month. To put that in perspective, our combined household income is roughly $48,000 per year. That's 15 percent of our income before taxes. That's money that's not going into our retirement funds, not going towards a new home, not going towards a child's college fund, and certainly not going back into the economy in a productive way. My husband and I have been forced to make major life decisions based on my student loan debt alone. Unfortunately, there's no end in sight with regard to my student loans. My interest rates vary from 4.5 percent to 11.25 percent. Some of the payments I make cover interest alone. My principal balance hasn't changed in months on some of my private loans. This is not what I envisioned when I was applying for colleges my senior year of high school.

These are the real stories from people in Wisconsin, but they're no different from stories of people across the country.

We have heard tonight, and I want to thank Representative Jeffries from New York, Representative Cartwright from Pennsylvania, and Representative Ellison from Minnesota for coming and sharing those strong words about why we need to address this issue and why it is such a crucial issue--not a Democratic issue, not a Republican issue, not an Independent issue, but an American issue, especially for those in the middle class and those aspiring to be in the middle class.

We need, Mr. Speaker, to act on this. Mr. Speaker, we need to act on this soon, before July 1. But, Mr. Speaker, I'm sorry, but H.R. 1911, the bill before this body tomorrow, will only make the situation worse. I urge my colleagues to vote against it.

Mr. Speaker, I yield back the balance of my time.

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