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Keep Student Loans Affordable Act of 2013--Motion to Proceed--Continued

Floor Speech

By:
Date:
Location: Washington, DC

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Ms. WARREN. Mr. President, I rise this evening in support of Keep Student Loans Affordable, the bill that has been introduced by Senators Reed and Hagan. We have been talking a lot in the last few hours about student loans, about the cost of student loans, and we have talked particularly about subsidized loans.

I just want to start this by pointing out that ``subsidized loans'' is not the right term. No one is subsidizing any of our students. The lowest cost loans the U.S. Government issues today produce a profit for the government. In other words, who is doing the subsidizing? Our students are doing the subsidizing. They are the ones who are creating the profits for the U.S. Government.

Let's talk about those profits. This year those profits, as the Presiding Officer rightly pointed out, will be more than $50 billion. Those are profits made on the student loans that are already outstanding and the profits we are going to start making off the new loans when the interest rate doubles at 6.8 percent.

Under this bill, Keep Student Loans Affordable Act, we are talking about how to prevent making even more profits off our students--a short-term patch to hold interest rates steady for all of our students while we try to attack the core problems.

The problem we have as we deal with this, and the problem with the Republican proposal, is right now the new loans are scheduled to produce $184 billion in profits for the U.S. Government over the next 10 years.

Let me say that again. At the current interest rate of 6.8 percent, which is where it went as of July 1 since Congress didn't act, the U.S. Government will make $184 billion in profits off our students over the next 10 years.

The Republicans have put forward a plan, and they have said in their plan that they want to be ``budget neutral'' or ``deficit neutral.'' They have used both terms. But understand what that means. The proposal they are putting forward, in fact, produces $184 billion in profits for the U.S. Government. In fact, the Republican plan goes just a little beyond that and produces an extra $1 billion in profits for the U.S. Government. That is what the Republicans are putting forward.

How can you sell something that says we are going to make $185 billion off the backs of our students? The answer is, according to the Republicans, to offer them a teaser rate. Tell them that just next year we are going to keep that interest rate low. The year after that, well, it might be a little bit higher, and the year after that it might just be a little higher than that, and don't ask any questions about the years going forward.

But understand this: Senator Alexander, for whom I have deep respect, made the point he just wanted to use the CBO's scoring numbers. That is the neutral arbiter of what things cost. What does the CBO say about the Republican plan? The answer is it will produce more--that is just a little bit more--than the same $184 billion in profits that come from doubling the student loan interest rate to 6.8 percent.

In other words, what the Republicans are proposing is the same thing you got in the mail when you got this zero percent interest teaser rate credit card. Boy, we will give you something cheap up front, but don't read the fine print, and don't see what is going to happen on down the line--or the same thing that happened with the teaser-rate mortgages. They were nice low payments at the beginning, until the whole thing exploded later on.

That is the Republican plan. It is not a fix, it is just a different way to make $184 billion in profits off the backs of our students.

What the Democrats are proposing is a plan that says: Don't raise the interest rates on anybody. Just keep them where they are, including 3.4 percent on our Stafford loans. Let's keep it there.

Here is a point I want to make that I haven't heard anybody talking about. What the Democratic proposal has in it is an acknowledgement that the U.S. Government is going to make less money doing that because there is no back end to make this up. Because the U.S. Government is going to lose money--it is not going to make as much money by doing that--this plan has something in it to pay for it, to offset the cost to the budget. We have proposed closing a tax loophole, raising about $4 billion in new revenues so we don't make that $4 billion in revenues off our kids immediately.

In other words, if we are going to reduce the profits we are trying to make from our kids, there has to be a way to pay for it. The plan proposed by the Democrats is short term. It is a 1-year fix, and it has a proposal to pay for it because it actually proposes reducing the profits the U.S. Government makes.

Take a look at the Republican plan. There is no pay in the Republican plan because it proposes to continue to make that $184 billion over the next 10 years.

So that is what this is about. We know what we need in the long term is to solve two big problems: The first is the $1 trillion in outstanding student loan debt. We have to find a better way to deal with it, a way that is not continuing to produce profits for the U.S. government. The second is the rising cost of college. We have to address that, and it is going to be a hard problem to tackle. We can't solve it in a matter of a few days. It takes time to do it.

So the Democrats propose: Don't raise interest rates on anyone. Don't double my rate. Keep them where they are, and let's buy a year with a short-term patch in order to address the systemic problems we need to address--the outstanding student loan debt and the rising cost of college for all of our students.

This is our chance to help our students. This is a small downpayment. It is a small help for some of our students and a real commitment that we are going to make a difference in the future. It is not a proposal that says we are going to try to fool them, that we are going to reduce prices just for a little while and then sock somebody else on the back end. That is not what this should be about. That is not what the U.S. Government should be doing. It is our responsibility, it is our opportunity to invest in our students.

The Democrats propose we get started on that and we get started on it tomorrow. I support the Keep Student Loans Affordable Act, and I commend Senator Reed and Senator Hagan for their work. I hope tomorrow this body will come together and pass it for our students and for our country.

Mr. President, I yield the floor, and I suggest the absence of a quorum.

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Ms. WARREN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

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