I rise today to share my views on where we are, procedurally, here in the United States Senate on the issue of student loan debt, of the interest rates that we charge those who take out Stafford loans, but also the larger question, of student loan debt and how we make the highway, the pathway to higher education for America’s students clearer, fairer, and more predictable.
Yeats once said: “Education is not the filling of an empty bucket but the lighting of a fire.” Educating our young people is one of the most important things we do as a society. Lighting the fire of curiosity, of imagination, of enthusiasm, of entrepreneurship, of creativity through education, particularly higher education, is one of the things that distinguishes the United States from many other countries around the world.
We’ve long had an enormous advantage in having one of the world’s greatest educational systems, but as you know so well, Mr. President, in your home state of Vermont, in my home state of Delaware, there are so many working families who today deeply question whether their pathway towards higher education for their children will be as predictable, as fair, as straight as it’s been for the generation past.
When I meet with business owners all up and down the state of Delaware, these innovators, these job creators deliver the same message. They have jobs available, they’re ready to hire people who have the education and skills they need to compete and participate in the modern economy. So today, with more than 12.5 million Americans out of work — with more than 30,000 Delawareans in my home state out of work — the question becomes: how do we make higher education, which includes skills training, vocational school, community college, more affordable and more accessible?
One thing we can do, one thing we have to do, is address the staggering debt that lingers with graduates sometimes decades after completing school. We’re faced today, Mr. President, with two problems: one short-term, one longer-term. The short-term problem is without immediate Congressional action, as you well know, student loan interest rates for millions of Americans will double on the 1st of July.
If we allow the rates on federally subsidized Stafford loans to increase from 3.4 to 6.8%, we’ll saddle student borrowers with a future additional $6.3 billion in interest payments. This could impact in my state of Delaware more than 18,000 student borrowers, burdening families who are still struggling to recover from the recession with unexpected additional bills. Lots of people have contacted my office, they’ve called, written, sent me postings on Facebook, they have Tweeted to contact my office and others here about their concerns.
Alexandra, a recent college graduate from Wilmington, Delaware, is one of many who’ve reached out to me. She recently wrote, “I can confidently say that going to a four-year college has prepared me more than I thought I could for success in the job search. Because of this education, however, and its costs, I’m facing $20,000 of debt, with only the potential of a lower-paying job.” Alexandra is deeply concerned about the significant debt she is facing and she urged me to work hard to freeze the interest rates on her student loans rather than letting it double. I agree and fully support our efforts on this floor to fix this short-term problem by freezing interest rates on Stafford loans.
So I’m disappointed that yesterday’s vote — the failure to invoke cloture — the failure to get past a filibuster by the other party has prevented the Senate from moving forward and discussing a possible, realistic solution. It is important for the Congress to confront in rise in interest rates and I hope we can come to a bipartisan consensus. But let’s be clear. Even doing that will not solve a larger long-term problem.
Addressing this rise in interest rates won’t change how much students borrow, numbers that are only steadily growing. Just this week our nation’s cumulative total student loan debt crossed the $1 trillion threshold – one trillion dollars. That is an enormous burden on young people just getting started in life, in their careers. If we are to really address this challenge, we have to help students and their families make smarter decisions about financing their education.
We can empower students to make more informed choices and fully understand the relationship between the debt they take on, their choice of major or studies and their future career path by providing more and earlier and better information about this.
Financial literacy — a clear understanding of how or whether borrowing will help raise their earning potential later — is a key part of the real solution to our country’s ongoing and exploding student loan debt. We can seek creative solutions that look beyond the obvious and really work to make higher education more affordable.
That’s why I’m so glad I’ve been able to work with my friend, Congressman Chaka Fattah of Philadelphia, Pennsylvania, on new legislation to encourage private investment in college scholarships on a community basis for future students. Congressman Fattah showed tremendous leadership in crafting a bill and we introduced a new tax credit that will help more kids afford college education. Entitled Communities Committed To College Tax Credit Act of 2012, the bill encourages private donors to support and sustain educational trusts that make higher education possible to all the young people of a chosen community. These private donors, encouraged by a 50 percent tax credit, will help fund need-based college scholarships, fueling a new generation of achievement by making higher education more affordable and reducing the need for student loans.
Equally importantly, in places where these programs are already in place, like Syracuse, it changes expectations when young people from the very beginning of schooling, from the first grade, the second grade, the third grade know that there is some possibility, some savings account, some community program that will fund their higher education, the likelihood that they will finish high school and go on to college increases by four to seven times.
I support Congressman Fattah’s innovative effort to support community trusts that support higher education. That’s one idea for looking beyond the box and working to make higher education more accessible.
Here’s another: The American Dream Accounts Act is a bipartisan, bicameral bill to encourage real partnerships between schools, colleges, nonprofits and businesses to develop secure, web-based individual, portable student accounts that contain information about each student’s academic preparedness and skills. It also directly tackles the issue of student loan debt by working with students on financial literacy from a very young age. Instead of having each of these different resources available as they are now – separately, siloed – it connects them across existing education programs at the state and federal level.
I’m grateful to Senator Bingaman of New Mexico and Senator Rubio of Florida for joining me as original cosponsors here in the Senate. This bill is a potentially powerful step toward helping more students of all income levels and background access, afford and complete a college education. It’s rooted in my own experience with the “I Have A Dream Foundation”, which has helped more than 15,000 young people all over the country to achieve the dream of higher education.
Mr. President, if we want American companies, American workers and American families to compete and win in the global economy, we have to help our students afford higher education. It really is that simple. I look forward to working with my colleagues to find solutions that promote affordable, accessible, higher education because early action, early engagement can help change the future, change the outcomes for our kids, and it possible for them to achieve the American Dream.
It is my hope we can overcome this needless filibuster, yesterday’s setback, and that all of us can come together and achieve what we say we want to do together: a responsible path forward that avoids needless additional burdens on working families trying to finance their children’s education and that we can look seriously at these two proposals I’ve touched on briefly today that will help our students of the future understand and afford higher education to make their American Dream possible.
Thank you.
###