Bank on Students Emergency Loan Refinancing Act

Floor Speech

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Ms. HIRONO. I rise today because we need a fair shot for the middle class. To join and stay in the middle class today, a college degree is more important than ever. In Hawaii, by 2018 about two of every three jobs will need some training or a degree past high school. But students are struggling to get ahead. We all know college costs have gone up way beyond inflation and students are borrowing more and more to pay for college.

Last week I joined several of the women in the Senate. We pointed out that student loan debt affects women more. Why? Because it takes longer to repay a student loan if, as a woman, you are making only 77 cents for every $1 a man makes.

I have heard from both men and women in Hawaii who are struggling under the burden of student loan debt, people such as Dawn from Honolulu, who told me, ``I've been teaching for over 3 years and can barely survive on my paycheck after paying student loans and rent,'' and Karen from Hilo, who said, ``Two of my three kids have loans that are almost non-repayable, given their size. They have a master's and almost-completed a PhD and one is home already using her expertise on our community. The other is coming this fall. Our prices are prohibitive enough without excessively high loans hanging over their heads.''

Their stories are not unique. Last year over 20,000 Hawaii undergraduates used Federal loans to pay for school. In Hawaii the average graduate with a bachelor's degree has over $23,000 in student loan debt.

Nationwide, overall student loan debt has skyrocketed to over $1.2 trillion. I know previous speakers have talked about that, but it bears repeating--$1.2 trillion nationwide in student loan debt. That is more than credit card debt or auto debt. The burden of student loan debt makes it very difficult to buy a home or start a family. Older Federal student loans are stuck at high rates of interest, and there is no option to refinance. Private loans often have even fewer consumer protections and higher rates.

In 2007 I was on the House-Senate conference committee for the bill that created the income-based loan repayment program signed into law by President Bush.

This week President Obama took Executive action to help more borrowers cap their student loan payments at 10 percent of their income. The administration will also extend partnerships with private companies, departments, and nonprofits to increase consumer protections and get the word out on existing programs. These are positive steps and ones that I have urged the President to take. But the President can only do so much on his own to help with student loan debt. Congress needs to do its part.

The bill we are discussing on the floor today would allow student loans to be refinanced down to today's low rate for new borrowers. Think about it. Just as homeowners can refinance a mortgage, we should allow student loans to be refinanced. Last year there was overwhelming bipartisan support for a bill keeping the student loan rates low for new loans.

I ask my Republican colleagues to join Democrats once again in voting for today's refinancing bill.

In addition to today's bill, I wish to point out another way we can combat student loan debt. A big reason students are taking on so much debt to go to college is the decline in State and Federal grants. Fewer college grants means more reliance on loans, resulting in more student debt.

In recent years State support for higher education has dropped. From 2008 to 2012 State higher education spending per student plummeted by 28 percent. That is a cut of over $2,000 per student on average.

At the Federal level, the Pell grant was once our main commitment to our students. Pell grants were the primary form of student aid to help low- and moderate-income students join and stay in the middle class.

Like the GI bill after World War II, which invested in our veterans, investing in low-income and moderate-income students pays off. From a strictly economic standpoint, we know these students get degrees, get better jobs, and pay taxes.

In the 1970s the Federal Pell grant covered nearly 80 percent of the cost of attendance at a 4-year instate public university. Today the Pell grant covers less than one-third.

To make matters worse, Congress chipped away at Pell grant eligibility and completely cut off the year-round Pell grant. In 2011, before this year-round program was eliminated, over 1,600 highly motivated Hawaii college students used year-round Pell grants to get a degree sooner. They are among 1.2 million students nationwide who used year-round Pell grants in that year alone.

One of those Hawaii students works in my office now--my University of Hawaii law school fellow, Janna Wehilani Ahu, who is on the floor with me. Her family is from a small fishing village in rural Hawaii Island. She graduated from Kamehameha Schools, the University of Hawaii at Manoa, and now attends the university's William S. Richardson School of Law. She used a summer Pell grant in 2010, and without it she says she wouldn't have been able to attend summer school and move more quickly toward a degree.

Wehi is one of many Hawaii students who have told me how Pell grants helped them. Another student, Lehua from Waianae, wrote:

I would like to thank you for supporting the Pell Grant program. Pell Grants have allowed me to increase my education and [have] provided me with a higher paying job. Who would ever think that a country girl from Wai'anae--who grew up with society telling me that we had the lowest reading and math scores in the state of Hawaii, the highest of everything such as welfare, crime, teen pregnancy and substance abuse in the state--can get a college degree.

Today, I ..... want to help people from Wai'anae to achieve their dreams.

Pell grants have made it possible for this Native Hawaiian, single mother, and country girl--as she calls herself--to be graduating with an associate's degree in early childhood education and transferring to the University of Hawaii West Oahu.

With ever-increasing college costs, we should be strengthening Pell grants, not cutting back on them. That is why I introduced the Pell Grant Protection Act with several my colleagues. Recognizing the importance of Pell grants, Congress has been providing discretionary funds for this program for over 40 years. It is time to put this program on the strong footing our students deserve by making this a mandatory funded program with a cost-of-living adjustment. The bill would also include an updated, clearer version of the year-round Pell grant.

The bill has the support of 25 national organizations representing students, professors, financial aid administrators, college presidents, and advocates for the middle class. The Associated Students of the University of Hawaii passed a resolution of support, and several University of Hawaii campus chancellors have also come out in support.

I also worked with my colleague, Senator Mary Landrieu of Louisiana, on a related Pell grant bill--her Middle Class CHANCE Act. Senator Landrieu's bill would restore year-round Pell grants, increase the Pell award to keep up with college costs, and let students use Pell grants for more semesters.

I look forward to working with Chairman Harkin on these and other bills to make college more affordable. These efforts are investments in our young people and in our collective future. Today is a start, and I urge my colleagues to vote for Senator Warren's refinancing bill.

Mahalo.

I ask unanimous consent to have printed in the Record Hawaii stories of student loan debt.

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