Bank on Student Loan Refinancing Act

Floor Speech

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I come to the floor disappointed that the Senate did not move to full consideration of the legislation that I know the Presiding Officer and others have worked on to take on the challenge that I believe will be the next great financial crisis our country will face--student debt.

Student debt, which is $1.2 trillion, now exceeds credit card debt, and that has been a PolitiFact out there and now validated. Increasingly, this crushing amount of student debt is slowing economic growth. It is not allowing young workers to go into the marketplace and buy a house or start a business.

While I am disappointed that we were not able to move to full consideration of the legislation that would provide a more comprehensive ability for students to refinance at a lower rate, I would point out that there are a number of other tools we can use.

I know I am going to be joined in a few moments--our paths may not completely cross here--by Senator Rubio. There are two pieces of legislation around this issue that Senator Rubio and I are working on together, and I want to speak briefly about both of those.

The first is legislation we have actually been joined by Senator Wyden on as well called the Know Before You Go Act--a relatively simple concept using data that the U.S. Department of Education already collects. It says we ought to put together in a user-friendly Web site information for every parent and young student before they go off to college--whether it is a 4-year college, a 2-year college, or a community college--so they know, if they attend that university, what their chance of graduation is, how long it will take; if they choose to major in art history, the way my daughter did, what the chances are of getting a job and what that job would actually pay, so that we can make these people--young and not so young--better informed consumers. The cost of higher education--perhaps next to the purchase of a home--is the single largest investment most families will make.

This legislation I have with Senator Rubio, the Know Before You Go Act--and Senator Wyden--would say that making these families and parents more informed will add value and make a more-informed consumer. It is simple, very little cost. We already collect this data, but we don't present this data in a format that is easily obtainable by families all across America.

I know Senator Rubio is going to speak about the second piece of legislation, and I think Senator Rubio and I share a common background on this issue. I believe we are both first in our generation to have graduated from college. I was able to get through college and law school--being quite a bit older than Senator Rubio--through direct aid, through work during college and law school, but also through student loans, but I came out of that with only $15,000 in student debt.

My personal story is that after working a bit in politics, I decided I would become an entrepreneur and proceeded to go off and start my own business, which within 6 weeks failed miserably. I then started a second enterprise that lasted a little longer; it lasted 6 months. My third enterprise was in the very early days of cell phones, and it managed to do pretty well, going on to cofound the company that became Nextel.

But as I reflect upon that period, particularly when I was literally living out of my car and sleeping on friends' couches, I am not sure I would have had the courage to try once, twice, or three times if I was looking at the kind of student debt that many--perhaps even some of these young pages here as they go on to college--might face if we don't take on this problem. It is not uncommon now for students--particularly if they complete graduate school--to see $70, $80, $100,000 in debt. The average student in Virginia comes out with about $30,000 in debt. We have to recognize that there should be a variety of tools available to them.

Again, I wish we had proceeded with the full debate on the bill on having the comprehensive ability to refinance.

One other piece of legislation, one other solution set--and I will be coming to the floor on a regular basis because I think there are a variety of ideas we need to lay out--a piece of legislation that Senator Rubio and I are working on together that we will be introducing is on simplifying into a single form a tool that already exists on student debt in terms of income-based repayment.

Income-based repayment is a pretty simple idea. It says that if you get out of college or get out of graduate school--too many young people now are perhaps forced into careers that may not have been their initial choice, but because of the crushing amount of debt payments they have to make, they don't have the kind of freedom I had to go out, candidly, and fail a couple of times before I managed to be successful. Income-based repayment says we will graduate the amount of money you will pay back on your student debt based upon the income you make. So if at first you need to take that job that might pay a little lower because there is a chance you can pursue your dream or actually become an entrepreneur, we will allow you to tailor your repayment schedule based upon the income, and as your income goes up, your payments will go up.

Rather than making income-based repayment kind of at the end of the line and very complicated to sort through, we simplify this approach, do it in a way that I believe is financially responsible, and do it in a way that gives that potential entrepreneur--the way I was--the chance to go out and take those risks, and if you are not successful at first--and can't leave out that 90 percent of entrepreneurs are not successful the first time they try a business--to make sure that you can maybe get that second shot, get that fair shot every American ought to have and not allow that student debt to be able to crush your dreams.

Clearly in America in 2014, in a world that is a global economy that is based upon our knowledge skills to stay competitive, you shouldn't go broke in America if you choose to go to college or get a higher education.

I believe these two pieces of legislation I am working on with Senator Rubio--the Know Before You Go Act, so you are more informed about your options going forward, and this income-based repayment--are two of the possible solutions that could be added to make sure everyone gets the same kind of fair shot that I know the Presiding Officer and my good friend the Senator from Maryland had and that we want to make sure all the future Americans have as well.

With that, I yield the floor.

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