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Stop the Student Loan Interest Rate Hike Act of 2012--Motion to Proceed

Floor Speech

Location: Washington, DC


Mr. COONS. Mr. President, I rise today to talk about where we are right now procedurally in the Senate on the issue of student loan debt and the interest rates that we charge those who take out Stafford loans, but also the larger question of student loan debt and how we make the highway, the pathway, to higher education for America's students clearer, fairer, and more predictable.

Yates once said that education is not the filling of an empty bucket but the lighting of a fire. Educating our young people is one of the most important things we do as a society. In lighting the fire of curiosity, imagination, enthusiasm, entrepreneurship, and creativity, particularly higher education is one of the things that distinguishes the United States from many other countries around the world. We have long had an enormous advantage in having one of the world's greatest educational systems.

As the occupant of the chair knows, in Vermont and in Delaware today there are so many working families who deeply question whether the pathway toward higher education for their children will be as predictable, fair, and straight as it has been for past generations. When I meet with business owners, innovators, job creators, they deliver the same message: They have jobs. They are ready to hire people who have the education and the skills they need to compete and participate in the modern economy.

Today, with more than 12.5 million Americans out of work, including more than 30,000 Delawareans who are out of work, the question is, How do we make higher education, skills training, vocational schools, and community college more affordable and accessible? One thing we can do, and have to do, is address the staggering debt that lingers with graduates sometimes decades after completing school.

We are faced with two problems. One is a short-term problem and one is longer term. The short-term problem is that without immediate congressional action, student loan interest rates for millions of Americans will double on July 1.

If we allow rates on federally subsidized Stafford loans to increase from 3.4 to 6.8 percent, we will saddle student borrowers with an additional $6.3 billion in interest payments. In Delaware, this could impact more than 18,000 student borrowers, burdening families who are still struggling to recover from the recession with unexpected additional bills. Lots of people have contacted my office--called or written or sent me postings on Facebook, and they have tweeted to contact my office and many others here about their concerns.

Alexandra, a recent graduate from Wilmington, DE, reached out to me and wrote:

I can confidently say that going to a four-year college has prepared me more than I thought it ever could for success in my job search. Because of this education, however, I am facing about $20,000 of debt with a low-paying job.

Alexandra is deeply concerned about the significant debt she faces, and she urged me to work hard to freeze the interest rate on her student loan rather than letting it double.

I agree with Alexandra and fully support efforts on this floor to fix this short-term problem by freezing interest rates on Stafford loans.

I am disappointed that yesterday's vote--the failure to invoke cloture--to get past a filibuster by the other party has prevented the Senate from moving forward and discussing a possible realistic solution.

It is important for the Congress to confront this rise in interest rates, and I hope we can come to a bipartisan consensus. But let's be clear. Even doing that will not solve the larger long-term problem. Addressing this rise in interest rates would not change how much students borrow, numbers that are only steadily growing.

Just this week our Nation's cumulative student loan debt total crossed the $1 trillion threshold. That is an enormous burden on young people just getting started in life and in their careers. If we are to really address this challenge, we have to help students make smart decisions about financing their education.

We can empower students to make more informed choices by fully understanding the relationship between their debt, their choice of major or studies, and their future career path by providing more and earlier and better information about this.

Financial literacy, and a clear understanding of how or whether borrowing will help raise their earning potential later is a key part of the real solution to our country's ongoing and exploding student loan debt.

We can also seek creative solutions that look beyond the obvious and really work to make higher education more affordable for more students. That is why I am so glad to work with my friend, Congressman Chaka Fattah of Philadelphia, PA, on new legislation to encourage private investment in college scholarships. Congressman Fattah showed tremendous leadership in crafting this bill. We introduce a new tax credit that will help more kids afford a college education, entitled Communities Committed to College Tax Credit Act of 2012.

The bill provides tax incentives to encourage private donors to support and sustain educational trusts that make higher education possible for all the young people of a chosen community. These private donors, encouraged by a 50-percent tax credit, will help fund need-based college scholarships, fueling a new generation of achievement by making higher education more affordable and reducing the need for student loans. But equally important, in places such as Syracuse where these programs are already in place, it changes expectations. When young people, in the very beginning of schooling--from the first, second, and third grade--know there is some possibility, some savings account, some community program that will fund their higher education, the likelihood they will finish high school and go on to college increases by four to seven times.

I support Congressman Fattah's innovative effort to support community trusts that support higher education. That is one idea for looking beyond the box and working to make higher education more accessible.

Here is another. The American Dream Accounts Act is a bipartisan, bicameral bill to encourage real partnerships between schools, colleges, nonprofits, and businesses to develop secure, Web-based, individual, portable student accounts that contain information about each student's academic preparedness and skills. It also directly tackles the issue of student loan debt by working with students on financial literacy from a very young age. Instead of having each of these different resources available, as they are now, separately siloed, it connects them across existing education programs at the State and Federal level.

I am grateful to Senator Bingaman of New Mexico and Senator Rubio of Florida for joining me as original cosponsors here in the Senate. This bill is a potentially powerful step toward helping more students of all income levels and backgrounds access, afford, and complete a college education. It is rooted in my own experience with the I Have a Dream Foundation, which has helped more than 15,000 young people all over the country to achieve the dream of higher education.

If we want American companies, American workers, and American families to compete and win in the global economy, we have to help our students afford higher education. It really is that simple. I look forward to working with my colleagues to find solutions that promote affordable, accessible higher education because early action and early engagement can help change the future and the outcomes for our kids and make it possible for them to achieve the American dream.

It is my hope that we can overcome this needless filibuster, yesterday's setback, and that all of us can come together and achieve what we say we want to do together--a responsible path forward that avoids needless additional burdens on working families trying to finance their children's education--and that we can look seriously at these two proposals I have touched on briefly today that will help our students of the future understand and afford higher education to make their American dream possible.

I thank the Chair.


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