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Border Security, Economic Opportunity, and Immigration Modernization Act

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. REED. Mr. President, I certainly respect my colleague's words about working together. I think we have to work together. I also respect the fact that he has made a proposal and the President has made a proposal. In my mind, both proposals fall very short on several issues. First, they use a baseline rate of the 10-year T-bill, which we have not generally used before for setting student loan interest rates. There is no cap on either proposal. One of the advantages the President's proposal has, I will admit, is income-based repayment. So I have serious reservations about both proposals.

I think the issue that faces us now is when we talk about trying to create a long-term solution, it is not just about structuring interest rates, it is also about refinancing loans that exist today and those that may come due in the future. Student loan debt is one of the greatest hindrances to young people today and ultimately to our economy in terms of buying homes and doing the things we expect college graduates could do before they turn 30--things that are going to be put on hold because they are paying off huge debts.

The other thing we have to do is look at the structure of costs for colleges and the extraordinary growth in college costs.

So rather than simply saying we fix the problem by going to a higher market rate, which, by the way, will cost all borrowers, particularly low- and middle-income borrowers, significantly more money--that is not fixing the problem. In many cases, it is creating a new set of problems. It will saddle present students with higher interest payments and higher loans. In the long run, it will not deal with this crushing debt that already exists for those people who have been borrowing.

I recognize that we have to work together. My concern is one of calendar. We have less than 3 weeks. There is no doubt that we are going to be on the floor with this very important historic immigration bill for all of those 3 weeks. I don't think we will have the time to fashion a balanced approach for all of these different issues, bring it to the floor, and have the kind of vigorous debate that is very important.

So I clearly recognize that we need long-term solutions, but what we don't need to do is double interest rates on students. It is going to immediately impact families across this Nation.

Again, the Senator has been very forthright but also thoughtful in terms of making a proposal. We disagree, but he has come to the floor with a long-term solution. I believe we have to work toward a long-term solution. My sense is that it will not be done in 3 weeks. It cannot possibly even get to the floor. Even if we came to a meeting of the minds, there is always a possibility that one or two of our colleagues will say: I have a different approach, and therefore we won't have the procedural means to reach the floor.

So I am actually asking simply to let us have the time to work thoughtfully on a bipartisan basis to craft not a solution to a rate issue but a comprehensive approach to the issues that burden every family in this country, which include, how do I afford college? What do the colleges do to make it more affordable? What do we do to make loans be more consistent with market rates but with protections for borrowers?

On a final point, I was in law school and had the benefit of Federal assistance. In 1981 market-based rates under the Republican proposal would have reached about 17 percent. With the cost of college now, I cannot imagine borrowing that kind of money at a 17-percent fixed-interest rate. Students would be financially flattened before they got their degree.

Again, I appreciate the objection. The objection has been made, and I thank the Presiding Officer.

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Mr. REED. Mr. President, I appreciate the comments from the Senator from Oklahoma. As far as the legislation that has been passed by the House Republicans, we know that for the 4 years of borrowing at the maximum loan amounts, for students entering college in 2018 and 2019, it would be $5,650 more. Whatever subsidy we are giving, those families are going to see $5,650 more in costs to their student loans. I am told the Senate Republican version would increase costs, versus current rates, by $6,700.

So talking about the subsidies we are giving and not giving disguises the fact that if we don't act by July 1, we are going to see students over the next several years increasing their debt, not decreasing it and not even holding it constant.

The other remarkable thing is that we score things based on budget CBO scoring. I am also informed that based upon the cost of borrowing, the Federal Government and their lending--they are making billions of dollars a year now on student loans. It is a profit center for the Federal Government. And, indeed, in looking at the 10-year projections for the bill that I believe was submitted by my Republican colleagues, there is a projected $15.6 billion in additional savings or income to the Federal Government.

We are in this irony where students are now going to be contributing billions of dollars to deficit reduction, weapons platforms, and other programs, but the reality they are going to see is that this mountain of debt they have today is much higher. Too many of them will not be able to climb it, and too many others won't even begin the trip. It will result in an economy that is underperforming and potential students who don't go to college, and therefore their income will be a fraction of what it would be, and in the long run our economy will suffer grievously. Again, these are extraordinarily complicated, challenging, interrelated, and difficult issues.

I would like to believe we could get this done in 3 weeks. With the 100 Senators who are with us, the possibility of getting anything done in 3 weeks is virtually nil.

I thank the chairman from Vermont, and I yield the floor.

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