Nomination of Sharon Y. Bowen to be a Commissioner of the Commodity Futures Trading Commission

Floor Speech

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Mr. DURBIN. Mr. President, during this last break I went back to Illinois and visited a lot of college campuses. I went to Augustana College, which is in the Quad Cities, and then went to Illinois State University in Normal, IL, and then down to the University of Illinois.

At each one of those campuses I had a press conference about student debt. Student debt today has reached a point where we have to pay close attention to it--and we should. The vast majority of Americans ask a very basic question: Senator, is there anything you are doing today that really is going to help my family? For 44 million Americans currently paying on student loans in America, legislation that is going to be introduced tomorrow can make a big difference.

I am cosponsoring a bill with Elizabeth Warren, the Senator from the Commonwealth of Massachusetts, a very bright lady who was on the faculty of the Harvard Law School and who understands these issues better than almost anyone I have ever met. She is leading the way on a college student loan refinancing bill.

Here is what we are trying to do. We are trying to get those students who are trapped in big debts with high interest rates a chance to refinance their loans. How significant could it be? Well, when I met these students at different schools, they told me their stories. As a former college borrower myself, as a father raising three kids who went through college, it was sad. It was really sad to hear their stories because the amount of debt that students are running into now is dramatically higher than anything those of us who were in the early stages of college loans ever experienced.

I will not even tell you how much I borrowed because it makes me sound ancient. But it scared me to death when I borrowed that money to go through college and law school for fear I would never pay it back. It turns out I did as I was supposed to. But students today many times find themselves so deeply in debt they just cannot get out from under it.

Now, I am going to set over here on this side a whole category of speeches on institutions known as for-profit colleges and universities. They are in a special place in my thinking. For-profit colleges and universities, who are they? The biggest one is the University of Phoenix. Apollo Group owns a series of universities. You have seen their advertising, I will bet.

They, at one point, had over 450,000 students in this University of Phoenix network of schools across the country. The second biggest is DeVry, another for-profit university out of my State of Illinois. Kaplan is the third largest. I am going to set them over here because they are in a special category. They are in a category of colleges and universities that we ought to be doing something about.

Three numbers tell the story about the for-profit colleges and universities. Ten percent of high school graduates go to for-profit colleges and universities. Ten percent of America's high school graduates go to these schools. These schools receive 20 percent of all Federal aid to education--10 percent of the students, 20 percent of the Federal aid.

These for-profit colleges and universities receive over $32 billion a year in Federal aid. Why is it so much if they only have 10 percent of the students? Because they charge so much when it comes to tuition. But here is the number: 46. Forty-six percent of all student loan defaults are students out of for-profit colleges and universities.

Why? Worthless diplomas, too much debt, and the students cannot find work to pay off their debts. Now, what if you have a college loan? There is something you ought to know about it. You probably heard it. It bears repeating. There are only a handful of debts in America that you can incur as an American citizen that cannot be discharged in bankruptcy: taxes--you have to pay those--child support, alimony, and college student loans.

No matter what happens to you financially, there is virtually no way out. The loan you take out to go to college is with you for a lifetime. Even in bankruptcy you cannot discharge it. At the end of bankruptcy, it is still sitting there. Unfortunately, the interest is growing.

That is why we have to take a look at it. Let's move aside from the for-profit college world, which I think is a separate issue, but a very important one, and look at the big picture. For too many Americans the promise of a fair shot at an affordable college education has become a long shot. Average tuition and fees at 4-year public colleges has more than tripled in the last 30 years. I can guarantee you that income for American families has not tripled in that same period.

Tuition has outpaced inflation for 32 straight years. The cost of education at all colleges and universities has been going up dramatically. No other major consumer expenditure, including health care, can make that claim. It is not just low-income students who feel the impact of these rising costs. It is middle-income students and their families as well. Since 2003 the amount of student loan debt in America has quadrupled. Nationally there are now almost 40 million borrowers with more than $1 trillion in debt. There is more student loan debt in America today than the combined sum total of all credit card debt. That is more than there is in auto loans. Only mortgages would be a higher category of debt in terms of its total cost.

The average student loan debt increased by 49 percent between 2005 and 2012 to $27,850. On average, Illinois graduates in the class of 2012 left with a little over $28,000 in debt, but their individual debts, as you might guess, are much higher; and 1.7 million Illinoisans have outstanding student loan debt out of a population of about 12.5 million.

What effect does $1 trillion in student loan debt have on the American economy. The Federal Reserve warns us that it is threatening current and future economic growth. The student loan debt crisis has been compared to the mortgage crisis we went through 8 or 9 years ago. It is ingrained in American culture that each successive generation wants to do better than the previous one. But student loan debt is crippling middle-class growth for younger generations.

Currently the median household wealth of people my age, in the 55-to-65 bracket, is 44 times the net worth of the median household of people younger than 35. People under the age of 35 are struggling. This is historically unprecedented and has a lot to do with the student loan debt.

I have heard from so many people in my State about this issue. They say student loan debt is preventing them from buying a car, borrowing any more money to finish their education, having their own place to live, getting married and, once married, having children. I have met couples who have said: We made a family decision; no kids until we pay off the student loans; I am not sure we will be able to pay them off in time to make that decision.

Think about that for a second. They cannot even start a family because of the student debts and the fear that they are going to default on them. I heard it firsthand back in Illinois last week. One student I met, Mabinty Tarawallie, is struggling with student loan debt even though she has done everything right. She immigrated to the United States from Africa when she was 11 years old. Her family was very poor but they told her: You have to have an education.

She graduated from high school, went to a local community college--a good place to start--and completed her undergraduate degree in sociology at the University of Illinois.

She told me she wanted to help others pick themselves up out of poverty as she did, so she went to graduate school for a master's degree in social work. She recently graduated from a program at the University of Illinois. Although she was able to get through her undergraduate years without much debt, she spread out her graduate studies over 3 years as she was raising her family of three kids.

She had one graduate assistantship, but she had to pay for the rest with loans. To compound this problem, her husband, another University of Illinois graduate student in education, also has student loans. Together, Mabinty and her husband, now that they have completed their degrees, have a debt of $150,000. One wants be a social worker and the other wants to be a teacher.

Now she worries about how her family is going to be able to cope, with debt three times the annual salary she might receive as a social worker. The irony is even as a college degree becomes harder to afford for the middle class, it is more important than ever that people get educated, trained, and skilled for better jobs. Only college-educated workers have had wage gains in the past 30 years. If you don't go the college route, your chances of success are diminished dramatically. That is why we want to address these serious issues.

This bill I am talking about, the one we are going to introduce tomorrow, will give students with college student loan debt who are current on their loans an opportunity to refinance.

I talked to Mabinty and other students. It meant for her that her interest rate would come down from 6.8 percent to 3.8 percent. If you have ever gone out to get a mortgage or you know somebody who did, they will explain to you that 3 percent of your interest rate is a big deal. If you can get your interest rate reduced by 3 percent, your chances of paying off the principal are going to be a lot better.

This bill I have cosponsored with Elizabeth Warren, Jack Reed, and others is called the Bank on Students Emergency Loan Refinancing Act. It will help millions of current borrowers refinance their Federal or private student loans into these lower Federal interest rates. Those with Federal loans can refinance into lower rates, the same rates available to students who took out new loans this year.

Under the Warren bill, those with private loans--many of whom have sky-high interest rates and are facing collection agencies beating up on them--can refinance with Federal loans with lower rates and strong consumer protection. Refinancing, incidentally, is fully paid for. This is a point I want to make, because this is where we lose the other side of the aisle. This is where we can't find bipartisan cosponsorship for refinancing college loans.

Here is how we pay for it.

The PRESIDING OFFICER. The time of the Senator has expired.

Mr. DURBIN. I ask for 2 additional minutes.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. DURBIN. Most of us have heard the name Warren Buffett, one of the wealthiest men in America. He raised the question a few years ago: Why, in America, is my income tax rate as a multimillionaire lower than my secretary's income tax rate? There is an explanation in the Tax Code, but it isn't a very good one. Warren Buffett said I should be paying more than she is paying. So we have come up with something called the Buffet rule, which says if you are in the multimillionaire category, you are going to pay a higher income tax rate than your secretary.

What a radical idea that is. I am just kidding. I think it is reasonable, and that is how we pay for refinancing college loans.

The problem is that we go to the other side of the aisle and say: We want to refinance college loans. It is going to take some money to do it. We will put in the Buffett rule so millionaires pay more in their income taxes. They say: We don't want any part of it. We will not increase taxes on anybody.

Well, by taking that position, they are sticking 44 million Americans with college loan debt at higher interest rates and all the problems they generate.

Which is better, that millionaires pay a little more so working families across America have a fair shot of paying off their college loans or saying we are not going to touch the Tax Code for any reason whatsoever--and isn't it a darn shame for these students and their families.

Well, it is pretty obvious to me what we should be doing.

I met Shiann Poshard last week at Illinois State University. She graduated with a teaching degree and about $30,000 in student debt. She has a job, and she is going to be teaching in public schools in Eureka, IL. Even so, on a first-year teaching salary--with an upcoming wedding, incidentally--her student loan debt will undoubtedly be a burden. If she is allowed to refinance her loan, which she took out at 6.8 percent, she could cut her interest rate almost in half. That will make a big difference.

Tomorrow, when this legislation is introduced, I hope anyone who has a family, where they have borrowed money for college, who has a son or daughter deep in debt and wondering how they are going to get out from under it, contact your Senator or your Congressman and ask them: Are you going to be part of this college student loan refinancing effort?

I hope they will say yes. We need bipartisan support to help these students out of the debt they are facing today.

I yield the floor.

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