Student Loan Debt

Floor Speech

Ms. WARREN. Mr. President, I commend the Senator from New York and all of my colleagues who have been here.

Forty million borrowers in this country have student loan debt. Student loan debt is exploding, and it threatens the financial stability of our young people and the financial stability of this country.

I am pleased to see so many of my colleagues here tonight talking about this problem because, make no mistake, this is an emergency. Outstanding student loans now total more than $1.2 trillion, and millions of young people are struggling to keep up with their payments.

It doesn't have to be this way. Congress set artificially high interest rates on old student loans which generate extra money for the government. The GAO recently projected that the government will bring in $66 billion on just the slice of student loans issued between 2007 and 2012. Those are the kinds of profits that would make a Fortune 500 CEO proud.

These young people didn't go to the mall and run up charges on a credit card. They worked hard and they learned new skills that will benefit this country and help us build a stronger America. They deserve a fair shot at an affordable education, and we can give them immediate relief by cutting the interest rate on existing student loans. We should cut those interest rates and cut those government profits.

Yesterday I joined with 27 of my colleagues to introduce the Bank on Students Emergency Loan Refinancing Act, which will do just that. The idea is simple. With interest rates near historic lows, businesses, homeowners, and even local governments have refinanced their debts. But a graduate who took out an unsubsidized loan before July 1 of last year is locked in to an interest rate of nearly 7 percent. Older loans run 8 percent, 9 percent, and even higher. We need to bring those rates down, and we need to do it now.

Bank on Students would allow student loan borrowers the opportunity to lower their interest rates on old loans to match the rates the government offers to new borrowers--3.86 percent on undergraduate loans, 5.41 percent for graduate loans, and 6.41 percent for PLUS loans.

I wish to be clear. These rates are still higher than what it costs the government to run its student loan program. Our work will not be done until we have eliminated all of the Federal profits on these loans. But this legislation is an important step in that direction, and it is a step both Republicans and Democrats should support.

Last year nearly every Republican in Congress--in the House and the Senate--voted for the exact same loan rates in this legislation. If Republicans believe that 3.86 percent is good enough for new undergraduate borrowers, then it should be good enough for all existing undergraduate borrowers. There is no reason on Earth to say some kids can get a better deal than others when they all worked hard to do exactly what we wanted them to do--get an education.

This legislation won't add a single dime to our deficit. The Bank on Students legislation adopts the Buffett rule, which limits tax loopholes for millionaires and billionaires. Every dollar we bring in as a result of that change will go directly to supporting lower interest rates on existing student loans.

We only introduced this bill yesterday, but we are already getting a great response. Think tanks such as Demos, student groups such as Young Invincibles, teacher groups such as the American Federation of Teachers and the National Education Association have all come forward and endorsed this proposal. Letters and emails and phone calls are already pouring in. I am also encouraged by the fact that some Republicans have also come forward to say they are open to considering a refinancing proposal.

I want to be clear. This should not be a partisan issue. I am eager to work with any of my colleagues who believe we need to do something about the growing student debt crisis. If the Republicans have issues with this proposal, if they want to suggest different offsets or policy changes, they should bring their ideas forward. What we can't do is continue to ignore this problem and hope it will go away on its own.

Congress made this mess by setting artificially high interest rates that are crushing our kids. It is Congress's responsibility to clean it up.

I don't kid myself. Refinancing will not fix everything broken in the higher education system. But the need for comprehensive reform must not blind us to the urgency of addressing the massive debt that is already crushing our young people.

This is personal for me. I grew up in an America that made it a priority to invest in its young people and the opportunity to go to college. An affordable college and affordable loans opened a million doors for me. I will keep fighting to make sure every kid who works hard and plays by the rules gets a fair shot.

Mr. President, I yield the floor.

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