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Ms. STABENOW. Madam President, before my friend from Rhode Island leaves the floor, I wish to thank him for coming to the floor of the Senate every week to give a message that we need to hear all the time about a serious worldwide crisis. I thank him for his passion and for calling on us to remember that when it is time for our children and grandchildren to ask where we were, I want to say I was with Senator Sheldon Whitehouse and those of us who care deeply about solving these problems. So I thank the Senator from Rhode Island very much.
I thank all of our colleagues who have come to the floor today and have spoken on the issue of keeping student loan rates low. I know Senator Blumenthal was here a few minutes ago. Our chairman, Senator Harkin, has come to the floor, as well as Senator Brown, Senator Sanders, and Senator Reed, who has been such a passionate advocate and leader on this issue. I thank as well our Presiding Officer from Massachusetts for her passion in keeping us on point. I thank Senator Boxer and Senator Murray and others who have come to the floor, including Senator Kay Hagan, who is leading this fight with Senator Jack Reed in what we intend to do tomorrow, which is focus on a very simple issue: Let's not do harm to students as it relates to student loan rates going up, while we fix the larger problem of affordability of college.
Let's be very clear. The majority of the Senate voted on June 6 to keep student loan rates at 3.4 percent--the majority. When we run for office, if one person gets one more vote than the other person, that person wins the election, and that is a majority. So it is unfortunate that a majority could not have ruled here, but because of the rules of the Senate, because of the rights of the minority and the filibuster and so on, there have been objections from Republican colleagues, and we have had to now go through this other process to overcome a filibuster.
We had the vote, and the majority of the Senate voted to keep rates low for students. Let's make that very clear. However, in order to overcome a Republican filibuster, we need 60 votes to block that filibuster.
So tomorrow is about that vote.
We all know that on July 1 the interest rate for students jumped from 3.4 to 6.8 percent. Let's all look at what is happening around in our communities with our families right now as well. Keep in mind, you can get a mortgage or a car loan for about 4 percent. So we are now seeing student loan interest rates higher than that. Under proposals we have seen predominantly coming from the other side of the aisle that would have those rates go up and up based on ``the market,'' we could see those rates go to 7, 8, 9, 10 percent in the future. It makes no sense.
If you can get a car loan, if you can get a mortgage for about 4 percent, what about students? Why are we now in a situation where college students are seeing their interest rates on their student loans double--double--or higher, which has been proposed by many in this body?
To add insult to injury, if we do not fix this the Federal Government will start to gain huge profits, as our Presiding Officer has reminded us over and over--more than $50 billion just this year on the backs of students and families.
So what we are looking at right now is billions of dollars in profits on the backs of students if the rate is doubled. If it goes higher, if it goes to the 7 or 8 percent being talked about in the Republican proposals or the 8.5 percent that was passed in the House, we are looking at over $100 billion--more than that--in profits by the Federal Government on the backs of students and families, right at a time when they are just trying to hold it together.
They want to go to college. We want them to go to college. We want them to get an education. We benefit as a country from making sure we can outcompete and outeducate the competition around the world. Yet those who say they care about students are proposing options that would increase costs for students and profits for the Federal Government. We should not be making profits on the backs of students who are trying to go to college. So our proposal that we will be voting on tomorrow would lock in the 3.4-percent interest rate on student loans to make sure students and families can afford college.
I would like to share a couple of e-mails I have received out of thousands. I want to thank students and families all across Michigan who have engaged in this effort, who have gone to DontDoubleMyRate to get information and tell their story, who have come to my Facebook page and have called us and e-mailed us to tell us how this impacts them.
Corey, a student right now at Central Michigan University in Mount Pleasant, MI, wrote to me about this issue and said:
I am asking you to please not allow my student loan rates to be doubled. I am a hard-working and respectful student. I make all of my payments. I go to class and do well. I work hard and am grateful for the chance to get a higher education, but if student loan rates go up I would be left to make a decision whether or not school would be affordable.
Whether or not school would be affordable--that is what this issue comes down to.
If we do not fix this, and fix it in a responsible way that keeps costs low, students like Corey and 7 million students across our country will have to rethink their college plans.
This issue should not be controversial. This is not a partisan issue. If I were to pick a partisan issue on the floor of the Senate, it would not be student loan interest rates and the cost of college. I would think this is one of the areas on which we could come together.
Just last year we kept the interest rate low. We passed, for a year, an extension of the 3.4-percent rate. It was good enough to do last year; I do not know why we cannot keep that going while we tackle the long-term solutions. This should not be partisan. I know there are people of goodwill on both sides of the aisle trying to figure out something. But, unfortunately, because of the desire of the other side of the aisle and the desire of the House to have this market based and float with the marketplace and go up with market interest rates, we find ourselves in the situation where it is even worse to pass one of the proposals that has been made rather than just allow the rates to go back up to the fixed rate of 6.8 percent, which is really crazy.
Republicans, in what we see in the House of Representatives, cap the rates at 8.5 percent and 10.5 percent. Now, again, remember, right now you can get a car loan--you know, 15, 20 years, however long you finance your car: 10, 15, 20 years--at 4 percent; have a 30-year mortgage at 3.5, 4 percent, 4.5 percent, 5 percent--all less than what we are talking about for a student to be able to get a loan to be able to go to college, which we all say we want them to do.
We are lending to banks at a much lower rate, as our Presiding Officer has reminded us over and over. I do understand it is a 24-hour lending rate. I do understand it is a different structure. But, still, if we can lend to banks at 0.75 percent, we cannot even fix a rate of 3.4 percent for students, when we have a tremendous stake in their willingness to go to school and work hard and be successful?
So under the plans we are seeing on the other side of the aisle and the plan we have seen in the House of Representatives, we would see rates go to 7, 8, 9 percent; some of them tapped out at 10.5 percent--10.5 percent. It makes no sense.
Corey from Central continues with his e-mail:
From the time we first start learning, we are encouraged to attend college and get a good job so that we can be a part of helping this country grow. I am simply asking you to help continue to make this an affordable option for me, and many others like me.
Our country will not grow without a strong middle class, and we will not have a middle class if people cannot get an education to get the skills they need, go to college, dream big dreams, and know they can be successful in attaining those dreams.
We are saying we need to do everything possible to make sure students can afford to go to college and that they do not come out with $20,000, $30,000, $50,000 of debt. I talk to medical students coming out with $100,000, $150,000 of debt. You could buy a house for that. Then, rather than making a decision maybe to go into primary care, where we certainly need doctors, they have to decide to go into a specialty because they have to pay off their student loans. There are stories like that all across our country--judgments being made.
So I have a very different view in terms of how we go about this--not just in the short run but what we lock in for the long term. The proposals on the other side lock in rates that will go up as interest rates go up. I do not think we should be doing that.
Here is another e-mail from Matthew in Royal Oak:
Students are not asking for a bailout like the one Wall Street got, just an opportunity to obtain an affordable education so we can compete in a global economy.
That is what we are talking about: Corey and Matthew and 7 million other people.
Let me conclude by saying that for me, this is very personal because I would not have been able to go to college, I would not have been able to be the first one to get a 4-year college degree in my own family if people I did not know in Michigan and in Washington had not decided that an affordable education was important to have.
My dad was very ill when I was in high school. I had great grades, but we did not have very much money. Because of a tuition-and-fees scholarship I received and student loans I was able to go to college. I want to make sure that every young person who wants to go to college can do that, and that whether we know them or not--we know their name, we know where they live--it does not matter. Nobody knew this red-headed, freckle-faced kid from Clare, and yet because somebody put a value on education and its importance to our country, I have had the opportunities I have had in my life.
I think that is what this vote is about. Tomorrow is about keeping the rates low, giving us time to address the broader issues around affordability. There is a lot of work to do. We can do that on a bipartisan basis, but first we need to start by doing no harm. That is the vote tomorrow.
I hope we will see a ``yes'' vote on the Keep Student Loans Affordable Act.
Thank you, Madam President.
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Ms. STABENOW. Madam President, if I might respond, this number comes from the Joint Tax Committee. I would be happy to follow up with the Senator on that, but that is where the number comes from.
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Ms. STABENOW. Would my friend from Tennessee yield for a question?
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Ms. STABENOW. I thank the Senator. First, in prefacing this in terms of the number the Senator asked me about before, we will check. I do know there are about 300,000 students in Michigan affected, over 500,000 in California. So that is almost 1 million. So the 2 million the Senator is talking about seems low if those two States together have about 850,000. But certainly we will check. We want to make sure the numbers are right.
My question would be: The number the Senator quotes as the interest rate in his proposal, is that a fixed rate or will that go up?
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Ms. STABENOW. For next year, though?
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Ms. STABENOW. Do I understand correctly, though, that for a student next year who took out a loan, it might be higher? If a student took out a loan in year 3, it might be higher? It is my understanding that over time, over the next 3, 4, 5 years, we are looking at rates at least of doubling, if not more. The Senator is saying cap it at 8.25. That is a lot more than doubling of the rates that will happen right now.
But is it accurate to say if the year in which you are taking out the loan, depending on whether it is next year, the year after, the year after, that it would be in anticipation that the interest rate would rise?
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