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Border Security, Economic Opportunity, and Immigration Modernization Act--Continued--

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. BURR. Madam President, reserving the right to object, my good friend and colleague from Massachusetts stated that students in Massachusetts have come up and said: Senator, fix the student loan program. Fix it. She said that what Republicans have done is they have filibustered it. The fact is that what Republicans offered was a fix.

What the Senator comes to the floor today to do is to have a 2-year extension of a student loan program that the Secretary of Education admits does not fix the problem. As a matter of fact, in a Washington paper today, Secretary of Education Duncan is very clear and implores the Senate and the Congress: Fix it. Find a long-term solution.

Let me state for my colleagues that what the Senator from Massachusetts is here to do is to extend a preferred interest rate of 3.4 percent for 2 years on 39 percent of the student loans that are taken out. Current law is that for subsidized student loans, they are subsidized at 3.4 percent. That preferred half, 50-percent cut, is effective until the end of June. But under current law, the unsubsidized Stafford loans are at 6.8 percent. The parent and graduate PLUS loans are at 7.9 percent. My colleague's amendment only covers the subsidized Stafford loans that are 39 percent of all of the loans that are administered. So what her proposal says is that we are not going to fix it, we are going to kick the can down the road for 2 more years. To the parents and to those who do not get subsidized Stafford loans, we are going to continue to charge you double what we charge other students. If we look at the math, where we are is unsustainable.

I understand that when we voted on a Republican alternative last week, it was the Alexander-Coburn-Burr bill where we actually wanted to tie the interest rate on an annual basis to the rate of the 10-year Treasury bond. The advantage was that if you locked that in in any given year, that was your interest rate for the entire life of the loan.

What students want is predictability. What they want to do is understand how much is it going to cost them for their education, not this year but over the life of having to pay it off. Well, you know what. We put a proposal on the table. It was routinely rejected even though it was a solution. It was a fix. It was what the President has called for. It is what the Secretary of Education called for.

The President also proposed a fix. The President's--I do not agree with all aspects of it, but it is a start. It is the nucleus of a compromise. In the President's bill, he ties everything to the 10-year Treasury bond--very similar to the fix Republicans came up with. Here is the difference: The President ties subsidized loans to the price of the Treasury bill plus .93. Ours was 3.0. On unsubsidized Stafford loans, it was 10-year Treasury bill plus 2.93--almost identical to the Republican proposal. For parents and graduates, the President's bill called for a 10-year bond rate plus 3.93 percent. So if you do the math and you look at 60 percent of it not being subsidized and 40 percent being subsidized, what Republicans laid on the table and what the President laid on the table are very similar. As a matter of fact, both the Republican proposal and the President's proposal said: Let's fix the rate for the life of the loan.

So not only am I being asked today to agree to a unanimous consent request to take up a bill that does not fix the problem, I am being asked to grant unanimous consent to a bill that does not even extend the same rate for the life of the loan for the students who are borrowing it. Imagine where we would be in the marketplace if we wanted to buy a home, and when we walked in, our lender looked at us and said: I am going to lend you the $300,000, but I have a right to readjust the rate every year. Some people take a risk at doing that. They are called mortgages that are fixed with ARMs--adjustable rate mortgages. After the downturn, they were not very popular. As a matter of fact, many of those were the ones that were foreclosed on.

Here is the challenge: We have to present something that is understandable and that is predictable and something that is financially sustainable for the American people. Some have come to the floor and they have been brave enough to say that these bills actually produce savings. Let me squash that. The Congressional Budget Office has projected that direct student loans issued between 2013 and 2023 will cost $95 billion based upon a fair value basis, in contrast with a projected savings of $184 billion using questionable fuzzy math.

So make no mistake about it, there are no savings that can be claimed from any of the proposals that are out there. It is a cost to the American taxpayer, one that I think is a justifiable investment in education if we applied it to everybody. But this is not applied to everybody. It is a unanimous consent request for 39 percent of the individuals who take out student loans. To the other 61 percent, it says: Hey, you live with 6.8 or 7.9.

So I am not in a position today to agree to the unanimous consent request that has been made, but I am in a position to do this: I ask unanimous consent that the Senate proceed to the immediate consideration of the bill that is at the desk, which is the proposal of the President of the United States on student loan issues. I further ask that there be 1 hour of debate equally divided in the usual form and that at the expiration of time, the bill be read a third time and the Senate proceed to a vote on passage of the bill.

Let's put this to bed now. Let's not wait until the end of June, when we have used a couple of more weeks, to say to kids: You ought to be concerned because rates are going to go up. Let's lock it down. I will not argue with the rates the President set even though I do not agree with it all. It starts to fix the problem. It is a solution in the right direction, where just assuming that we extend what is currently broken, does not fix it, and is not cost-sustainable, I believe is the wrong thing.

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Mr. BURR. Madam President, continuing my objection, I am appalled. I am, frankly, appalled. Out of the student loan program, the Democrats push $8.7 billion to the Affordable Care Act; $8.7 billion of student loan-designated money is going to pay for ObamaCare.

I realize the Senator wasn't here when the vote was made, but it is $8.7 billion. To suggest that trying to be fiscally responsible is an insult to this generation of students when they are sending $8.7 billion to a health care plan out of the student loan fund is incredible.

Let me go a step further. The Senator quoted from the Congressional Budget Office. Let me quote from the Congressional Budget Office as well:

Taking account the cost of market risk significantly reduces or eliminates the savings estimated for student loans under the FCRA approach, making student loans costly to the Federal government in most years during the coming decade.

Maybe you can pick these out that say we can make money off this, but I am not sure it says it any clearer than that it costs the American taxpayers money. Let me say I am fine with subsidizing student loans. I am not objecting to that. I didn't object to the President's proposal. I offered the President's proposal.

I am sure the President is going to be shocked to find out it doesn't solve the problem because the Secretary of Education surely believes it does.

Here is what I object to. I object to the fact that we are going to give some kids a preferred rate, and we are going to sock it to the 61 percent of kids, parents, and postgrads. Why should they be denied the same rate? Why are only 39 percent going to get a cut of 3.4?

Why? Because it is hard to do. It gives away a political tool.

You see, we are here arguing this because of politics, not because of affordability of higher education. Thank goodness the President in his budget proposal laid something on the table.

Quite frankly, I am sick and tired of waiting until the deadline. We are going to come out here every week, and we are going to hear in 3 weeks: This is going to happen; in 2 weeks: This is going to happen; and in 1 week: This is going to happen. We are going to come down to the last day and we are going to dare each other not to do it.

I don't know what is going to happen on the last day, but I can tell you what is going to happen every day until the last day. I am going to come out and object to anything that does not solve the problem long term. I don't want to go home and look at kids and tell them the rate they agreed to this year is not the rate for the entirety of the loan, period.

That is not the case under this bill. I am not going to go home and look at two different students whom we have put in two different categories and tell one: You have to pay 3.4 percent, but you have to pay 6.8 percent.

That is wrong. It is not our role to pick winners and losers.

I would turn to my good friend from Massachusetts and ask, Have I in any
way, shape or form misstated what her proposal does, which is extend the 3.4 percent which is limited only to subsidized Stafford loans?

If the Senator thinks that is wrong, I would ask her to speak now.

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Mr. BURR. Reclaiming my time----

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Mr. BURR. Reclaiming my time, clearly, the Senator said her bill only deals with the subsidized Stafford loan.

Under current law, let me state it again, unsubsidized Stafford loans, current law, 6.8 percent; parent and graduate PLUS loans, 7.9 percent. Somehow, somebody thinks this is fair.

I, personally, participated in coming up with something that treats everybody the same, that ties it to a 10-year Treasury, that fixes the rate above a 10-year Treasury that sets that number once a year, lets students know exactly what their exposure is going to be, and provides them the certainty of that interest rate for the life of the loan----

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Mr. BURR. Let me finish--which this unanimous consent request doesn't incorporate.

In essence, the unanimous consent request says we are not going to deal with this 61 percent; we are only going to deal with 39 percent. Because they have received the preferred rate up to this point, we want to protect the preferred rate.

Some people think it is the role of Congress. I don't think that is the role of Congress.

I yield to the Senator for a question through the Chair.

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Mr. BURR. I would be happy to address the Senator's question.

No, we haven't. The President's proposal--and I said there are parts of it I don't agree with--makes loan forgiveness tax free.

Maybe what we ought to debate is whether we are going to make college tuition free, because this is a race for who can make it the cheapest on the backs of the American taxpayer--when we are $1 trillion out of balance, $1 trillion we spend.

Excuse me, we have new numbers: $646 billion this year, projected to go up next year. We are accruing debt on this country's books at a rate nobody ever dreamed. We are still talking about constructing programs that financially are unsustainable because we are using somebody else's checkbook.

This is the definition of insanity. Therefore, I would object to the Senator's original request.

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Mr. BURR. Will the Senator yield for a question?

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Mr. BURR. I ask unanimous consent to ask one question of my colleague from Massachusetts.

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Mr. BURR. Does the Senator from Massachusetts agree that out of the student loan fund $8.7 billion is diverted to the Affordable Care Act?

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Mr. BURR. The Senator is not aware of that?

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Mr. BURR. I thank my colleague for not answering.

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