Executive Session

Floor Speech

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Mr. DURBIN. Mr. President, life is about choices. We make them all the time, the choice about where you are going to school, what you are going to study, what you are going to do with the rest of your life, what kind of job you want, your car, a lot of other choices we make.

Tomorrow the Senate gets to make a choice. It is going to affect some people. Here is the choice: We have in this country a serious problem with college loan debt. It has grown dramatically over the last several decades. Now we estimate the total amount of college loan debt in America is over $1.2 trillion. What does that mean? How big is that?

More college loan debt than the sum total of all credit card debt in America. More college debt than the sum total of all automobile debt in America. The only other debt larger--mortgage debt.

This is growing, the college student loan debt. Forty million families are affected by student loan debt out of a nation of 300 million. So we are dealing with somewhere in the range of 14, 15 percent of America making payments on college student loans.

The amount of debt has grown dramatically. I will not come to the floor and tell you what I borrowed to go to school because it makes me sound ancient. But I will tell you this: When I graduated from law school, my student debt equaled one-half of my gross income the first year, just to put it in perspective. Not so anymore.

What we are finding is that most students are so deeply in debt coming out of college that they are making life decisions based on their debt. I get emails in my office from young men and women who always wanted to be teachers. They love teachers. They want to be a teacher. They tell me they cannot be a teacher, because the cost of getting an education to become a teacher is so high, that the starting pay of a teacher is so low, and so they are going to do something else. What a loss for this country, when someone who desperately wants to teach does not get that chance.

Now 25 million of the 40 million Americans with student loan debt can get a break tomorrow morning, because we have a bill coming to the floor which will allow 25 million of these student loanholders to refinance their debt. Ever own a home with a mortgage? I have. You heard there was a lower interest rate available. You called the bank and said: Hey, can I knock that interest rate down from 8 percent to 6 percent? Yes, let's do it, because a lower interest rate means a lower monthly payment, or the same monthly payment is going to pay off more principal on your debt.

So we are going to give college students tomorrow an opportunity, 25 million of them, to refinance their college student loans to lower interest rates at 3.8 percent for undergraduate education. Currently many of these students are paying 6 percent, 7 percent, 8 percent, 10 percent, and higher. Is this a good thing? You bet it is. For many of these students, this is the lifeline they have been looking for.

That is one possibility. That is one of the choices: Help 25 million in debt. But to pay for this, if we are responsible, we had to come up with a source of revenue to make up for the lost interest payments to the Federal Government when the debts are refinanced. We came up with it. It is called the Buffett rule. It is named after Warren Buffett, this seer of Berkshire Hathaway, a fellow I have come to know a little bit through his family. He came to us a few years ago and he said, something is wrong with the Tax Code. Here I am, Warren Buffett said, one of the wealthiest men in America, and my income tax rate is lower than my secretary's income tax rate. How can that be? Why would my secretary pay a higher income tax rate than me, a billionaire? So we created what we called the Buffett rule. It said: If you are one of the fortunate few in America who makes over $1 million a year, you are going to have a minimum income tax rate of 30 percent, which at least puts you on par with the people who work for you. You are going to pay an income tax rate at least as high as they do, 30 percent.
How many Americans are like Warren Buffett, making over $1 million a year? How many would have to pay this new income tax rate? Twenty-two thousand Americans make over $1 million a year in 2009 and paid less than a 15 percent effective tax rate. Okay, Senate, here is your choice: Do you help 25 million students refinance their college debt and reduce their loan payments by an average of $2,000, or do you protect 22,000 millionaires from paying more in income tax? That is our choice tomorrow. I think it is a pretty easy choice.

I do not have anything against wealthy people. If they made their money honestly, God bless them. But I do not think it is unreasonable to say to the wealthiest people in America: Count your blessings, buddy. You are living in the greatest Nation in the world that gave you a chance to get rich. Now give something back to that country. Give something back to that next generation that wants to build this country even to a higher standard and more success for more people. That is what we face tomorrow.

I go around my State. I have had hearings at college campuses. Some of these are worth repeating. Casey Graham Barrette at North Central College up near Chicago graduated in 2010, got married, has an infant boy she is very proud of. She and her husband both have jobs. His paycheck pays living expenses, her paycheck pays student loans. She is working to pay the student loans in her household. She worries about the future of her family until she gets these loans paid off.

Joshua Schipp. I recently met him. He told me he graduated with a student loan debt of $80,000--from a good school, do not get me wrong. But $80,000. His interest rates on his debt range from 4 1/4 percent to 9 1/4 percent. They could come down to as low as 3.8 percent under our bill coming up tomorrow. That is the range of his current interest rates on a variety of loans he has.

Joshua, at one point, said his student loan payment was $700 a month. Now stick with me for basic math and forgive me if I miss this a little bit but I think I have got it. Joshua has got a job making $11 an hour--$11 an hour, 40 hours a week, $440 a week, 50 weeks a year. I know there are 52, but let's assume 50 weeks a year. He is making somewhere in the range of $22,000 a year.

His gross pay of $440 times four makes that right at $1,800--I am rounding it off, $1,800. Let's assume after you take the taxes and all of that out, he has about $1,200 net that he makes each month. Do you remember what I said he paid in student loans? Seven hundred dollars a month. Twelve hundred dollars net, seven hundred dollars on your student loan. How could you possibly make it? That is Joshua, who stuck it out, finished with his college diploma, did what he was told to do. Now there he sits with that debt hanging over his shoulder.

Here is a story I know well because I met this young lady several times, Hannah Moore from the city of Chicago. Hannah got off to a great start. She was not sure what she wanted to do, so she went to a community college. Affordable community colleges, I recommend them to everybody. The hours can be transferred to universities. You have a lot of different courses you can take, and it is affordable. That is where Hannah started.

Everything was going well. Then she stumbled and made a bad decision and did not even know it. She transferred from community college to a for-profit college. For-profit colleges are different than public universities. They are different than private schools. They are different than not-for-profit schools. They are out to make money. Hannah did not know it. She thought she was signing up for a real college and a real education.

She went to something called the Harrington College of Design in Chicago. Their parent company, Career Education Corporation, is under investigation by 17 different State attorneys general. They have got big problems. They create big problems for people such as Hannah.

So Hannah went to this Harrington College of Design and got her ``degree.'' Do you know, when it was all over, how much student debt she had for her time at Harrington College of Design, the for-profit school? It was $124,570. She cannot keep up with the payments. She has fallen behind. And the debt from the interest keeps adding up. She is now up to $150,000, lives in her parents' basement. Her dad came out of retirement to try to help her pay off her college loans.

This for-profit college and university issue is a separate one I will save for another day. But this outrageous sector of our higher education economy accounts for 46 percent of all student loan default. They overcharge their students and provide them with diplomas and degrees which, in many cases, are worthless. But having said that, there sits Hannah. Did I mention she is 32 years old and $150,000 in debt, with a worthless diploma from a for-profit college run by the Career Education Corporation? That is what she is up against.

This bill will help her some. It is not going to eliminate her problem, because there is one point you cannot overlook when it comes to college student loans. This is not like the mortgage on your home. This is not like the money you borrow to buy a car. It is not like a line of credit you might take out to start a business. A college student loan is in a rare category of debt and loans in America, a rare category of debts that cannot be discharged in bankruptcy, no matter how bad things get for you, no matter how terrible your circumstances, your economic circumstances. You go into court and say: I have got to declare bankruptcy. They will help you with everything, but they cannot do anything about your college student loan. It is with you for a lifetime.

We are hearing the horror stories. Grandma decides her granddaughter needs to go to college, cannot get the money to go through. Grandma says: Let me cosign the note with you, honey. I want you to finish college. The granddaughter finishes school, defaults on the loan. They levy grandmother's Social Security check. That is the reality.

I just left a press conference where a young woman who was trying to pay off her college student loan fell behind. Then she said: Well, at least I have got my income tax refund coming back. It was claimed. She did not get any of it. That is what these loans do to you. That is what the collection agencies do to you.

So the question tomorrow morning for the Senate is: Whose side are you on? Take your pick here. Are you on the side of 22,000 or so millionaires in America? Do you want to protect them from paying a penny more in taxes, or are you on the side of 25 million college students and their families who are struggling, just like the ones I have told you about? The choice is pretty clear to me. A college diploma ought to open the door of opportunity.

It shouldn't open the door to debtors' prison, and that is what is happening to thousands of students across America right now.

The first step here is to pass this bill. There is more to do, but the first step is to pass this bill.

The President helped us yesterday. The President said he was going to give 5 million of those paying off college student loans a chance to really organize their debts and to limit the amount of money they had to pay out to 10 percent of their income. That gives some relief to 5 million, but we can do more. We can help 25 million, and that is what we ought to do tomorrow.

When you go back home and talk to people around the Senate, a lot of them start gazing at the ceiling and saying: I don't know about you politicians in the Senate. All you do is give speeches, put out press releases, and take up valuable time on television. What do you do to help us? What are you doing for working families?

Well, I have a speech--and it is pretty good--about what we try to do with minimum wage and making sure people--women and men--are paid fairly in the workplace, but this college student loan thing haunts me. It haunts me to think that these young people, who are convinced they are doing the right thing, who are borrowing money for the right reason--higher education--are getting so trapped in debt that their lives are compromised. People make speeches about, well, it affects the economy. If you have a lot of student debt, you may not buy a new car, a new home, get married, or have children once married because of your debt. That is all true. That looks at the big picture. But I can't get away from those smaller photographs in my mind of the people I have met in Chicago and all over my State who are trying to pay off these debts.
It comes down to this: We have 55 Democrats and there are 45 Republicans in the Senate. My job is to count votes. I think we are going to get all of the Democrats. I think every one of them will vote for it. But that is not enough. Fifty-five out of one hundred is not enough. Tomorrow we need at least five Republicans to join us--five. None of them have cosponsored the bill yet to refinance college student loans, but they can get into this conversation and join us tomorrow in an effort to help. If five will cross the aisle to make this a bipartisan effort, we can get this moving.

I know the House of Representatives has been a dead end. So many things have gone over there to die--immigration reform and a long list--but I sense this is different. I sense that Members of the House of Representatives in both political parties, if they go home, wherever they live, if they have a real town meeting, if they invite real people, real families, they are going to hear about this issue. Forty million Americans are living with this issue.

Let's do our job in the Senate. Let's pass this college refinance bill. Let's give these students a break, a chance. Let's do the right thing for them. They did the right thing and went to school. Their debt should not compromise their future.

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

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