Smarter Solutions for Students Act

Floor Speech

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Mr. SANDERS. Madam President, I have a lot of affection for my friend from Iowa Senator Harkin and Senator Durbin from Illinois, but I must respectfully disagree with them and rise in opposition to the bill.

I ask for support for an amendment I am offering which is being cosponsored by a number of Senators. I wish to thank Senator Leahy, Senator Wyden, Senator Whitehouse, Senator Gillibrand, Senator Blumenthal, Senator Schatz, Senator Murphy, and Senator Hirono for their support for this amendment. I also wish to thank the largest educational organization in America, the National Educational Association, for their support of this amendment, and I thank the American Federation of Teachers for their support of this amendment.

The truth is that if the bill on the floor is passed without amendment, it would be a disaster for the young people of our country who are looking forward to going to college and for the parents who are helping them pay their bills. The job of the Congress, it seems to me, is to improve upon the dismal situation we face today in terms of student indebtedness and college affordability. These are major crises in this country. Millions of kids leaving school are deeply in debt and parents are borrowing at high interest rates to send their kids to college. We have a crisis. This bill makes a bad situation worse, not better.

I ask my colleagues to support the amendment I have offered which would provide a 2-year sunset to this bill--an approach which would prevent student interest rates from soaring and allow us the time, through the reauthorization of the Higher Education Act, to deal with the issue of student indebtedness in a constructive long-term manner. This issue is too important not to go through a hearing process, not to go through a committee process. I hope we will pass my amendment, supported by eight other Senators, which will sunset this bill in 2 years and allow us to take advantage of the relatively low interest rates now and prevent student interest rates from soaring into the future.

The very sad truth of the matter is that in a number of ways, our government--Congress, the White House--is failing young Americans today, at all ages. We have the highest rate of childhood poverty of any major country on Earth. Almost 22 percent of our kids live in poverty.

I think every working American understands that our childcare system is a disaster. If a person is a working-class mom or dad in Vermont, or I suspect any other place in this country, it is hard to get the quality childcare they need, so that many kids today, because of inadequate childcare from zero to 3 and 4, enter kindergarten or first grade already years behind where they should be intellectually and emotionally. We are failing our young children.

We are failing our teenage young people as well. Today, the unemployment rate for high school graduates is close to 20 percent. That is the official rate. For real unemployment, counting those who have given up looking for work and those who are working part time when they want to work full time, it is even higher than that. What does that mean for millions of kids who graduate high school, can't get a job their first year out of school, their second year out of school, and their third year out of school? What does this mean for their entire lives? We are not dealing with that issue.

I had passed an amendment as part of the immigration bill to provide 400,000 jobs over a 2-year period for young people. That is a start. We have to go a lot further than that. By and large, we are failing working-class, middle-class young people today who are desperately searching for jobs.

For minority youth--for African-American youth--if my colleagues can believe this, the official unemployment rate for ages 16 to 19 is over 43 percent--over 43 percent, African-American young people, unable to find jobs. That is unacceptable.

Our goal must be to make sure the youth of this country, if they graduate high school and they want to go out into the workforce, are able to get decent jobs or if they choose to go to college, to be able to afford to go to college, and to make sure our young people do not end up on street corners doing drugs--not in jail, not in self-destructive activity. That is our job, to make sure those who have the ability and capability are able to go to college and others are able to get meaningful work. Frankly, we are failing in both of those areas. When we do that, we fail not only the young people of this country but the future of this country because the future by definition is with our young people.

All of us know we live in a highly competitive global economy. If this country is going to succeed economically, we need the best educated workforce in the world. Unfortunately, compared to much of the industrialized world, we are doing very little to make that happen.

In June, the OECD--the Organization for Economic Cooperation and Development--released its annual snapshot on the state of education in developed nations. The report showed the United States is losing ground to other nations that have made sustained commitments to funding higher education opportunities. We are losing ground, and the legislation on the floor today, which will result over a period of years in a strong likelihood that interest rates for student loans will go up, making it harder for moderate and low-income kids to go to college, will only accelerate those losses.

The United States once led the world in college graduates. Thirty, forty years ago, we led the world in the percentage of our people who were college graduates. In fact, as a result, today those people between age 55 and 64 in the United States still lead their peers in other nations in the percentage with college degrees--about 41 percent. So if a person is between 55 and 64, compared to the rest of the world, that age group has the highest percentage of people who are college graduates.

Tragically, over the years, we have lost substantial ground. In 2008--and this is a very sad story indeed, something that should concern every Member of Congress and every American--the same percentage of Americans aged 25 to 34--the same percentage of that younger group--has a degree compared to the older group of 55 to 64. What does that mean? What it means is that for the last 30 years, every President, every Governor, every Member of Congress, virtually every parent in America has said to our young people: The world is changing. Technology is exploding. A high school degree no longer will do it if you are going to make it into the middle class.

That is what everybody has said for the last 30 years. But 30 years later, nothing has changed. The percentage of Americans who have a college degree today is no higher than it was 30 years ago. The result is that other countries have significantly surpassed us in terms of the percentage of their younger people who now have college degrees.

In terms of the percentage of college graduates, we lag behind Australia, Belgium, Canada, Denmark, France, Ireland, Israel, Japan, South Korea, Luxembourg, New Zealand, Norway, Sweden, and the United Kingdom. In other words, where we were once first in the world in terms of percentage of college graduates, we are now 15th in the world.

How do we compete in a global economy if we have descended from first to fifteenth in the world in terms of people with college degrees?

That is why on the immigration bill we have people coming to the floor and saying: Americans are not educated. They cannot do these high-tech jobs. We need people from all over the world to come in to do that work.

Well, I do not agree with that, but that is the argument out there: Our people do not have the education. Does anyone believe in any serious way the bill on the floor today is beginning--beginning--to address the issue of making it easier for kids in this country to go to college? The answer is nobody does because, according to CBO projections, interest rates are going to go up, and, in fact, it is going to be harder for families to send their kids to college. I will get into that in a moment.

The other very important point to be made--and I think a lot of people do not understand this--according to the Congressional Budget Office, the U.S. Government is making huge profits--huge profits--from college loans. In fact, according to the CBO, the estimate is that the U.S. Government will make about $184 billion in profits over the next 10 years.

So what do we have? We have a middle class which is disappearing. We have poverty at a level as high as it has been in the last 60 years. We have millions and millions of families struggling to be able to send their kids to college. My parents did not go to college. My brother and I were the first in our family to go to college. Millions of families are in the same boat.

What is the U.S. Government doing now? We are helping to balance the budget not by asking multinational corporations--that make billions of dollars a year in profit and pay nothing in Federal income taxes--to pay their fair share of taxes; no, that is not what we are doing. We are saying to working-class and middle-class families: Oh, you want to send your kids to college? You want to borrow money from the government? Well, over the next 10 years we are going to make $184 billion in profits off of you.

Let me go on record as saying I think that is a very counterproductive idea. It is a dumb idea. We have to get out of the business of making profits off of struggling families who want nothing more than to be able to send their kids to college.

Let's be very clear about what the legislation on the Senate floor would do. According to CBO--and I fully agree; I do not know what interest rates are going to be tomorrow, next year. You do not. Nobody does. And the CBO is by no means infallible. But the CBO and most economists believe we are leaving this period where interest rates have been historically low. Are they absolutely right? I do not know. Could they be wrong? Quite possibly. But that is what the CBO is estimating. This is what the CBO says.

The CBO says the 10-year Treasury note on which this entire legislation is based is now at 1.8 percent. In 2014 it will be at 2.57 percent; in 2015 it will be at 3.35 percent; in 2016 it will be at 4.24 percent; in 2017 it will be at 4.95 percent; in 2018 it will be at 5.2 percent.

Everybody has to understand that what this legislation is about is basing student loans on a variable interest rate. Interest rates go up; student loans go up.

So let's look at what will happen with student loans under this legislation. The good news is that because interest rates are low now, for the next few years the interest rate for the subsidized Stafford loans will be, in 2013, 3.8 percent; in 2014, 4.6 percent; in 2015, 5.4 percent; in 2016, 6.2 percent; in 2017, 7 percent, in 2018, 7.2 percent. That is for undergraduates.

For the graduate Stafford loans, under this proposal on the floor today, in 2015, 6.9 percent; in 2016, 7.8 percent; in 2017, 8.5 percent; in 2018, 8.8 percent.

For the PLUS loans--those are for parents who are helping their kids--in 2015, 7.9 percent; in 2016, 8.8 percent; in 2017, 9.5 percent; in 2018, 9.8 percent.

Now, does anybody really believe that at a time when families and young people are having an enormously difficult time paying for college that these interest rates make any sense whatsoever? They do not. They are going to put an increased burden on working families and young people.

Today, the average student graduating from a 4-year college leaves school $27,000 in debt. If you are paying interest rates of 7 percent or 8.5 percent for graduate school, there is no doubt in my mind that indebtedness will rise.

Furthermore, not only is it a question of families and young people struggling with enormous debt--on my Web site I asked Vermonters and people all over the country to tell me what the impact would be on their lives of student indebtedness. We heard just enormously painful stories from people who said: You know what. My husband and I wanted to have a baby. We cannot have a baby right now because we do not have the funds. We are paying off our student debt.

We heard from people who are going into professions they really did not want to go into because they just have to make a whole lot of money to pay off their debt rather than doing what was the love of their life, what they studied to do. So what we have is a bad situation which, if the CBO is correct, will only make that situation worse.

My amendment is not my preferred option. My preferred option would be to do what a majority of the Members in the Senate voted to do, which is to freeze interest rates for another year at 3.4 percent while we come up with a long-term solution. My Republican colleagues, as they do on virtually every piece of major legislation, chose to filibuster that bill, and we needed 60 votes. I think we only got 51. A majority spoke for the American people, for the young people, for working families, but we could not get the 60 votes. That was my preferred option.

But this approach, at least, and what my amendment would do is to say, OK, between 2013 and 2014 we will keep interest rates fairly low--not as low as I would want it--4.6 percent for undergraduate Stafford loans, 6.1 percent for graduate Stafford loans, and 7.1 percent for the PLUS program. It is not ideal by any means, but it is a lot better than what will likely take place in years to come. So we take the best of this bill and sunset it at the end of 2 years.

So if people say there is no option to going forward as opposed to 6.8 percent, I say: Sorry, you are wrong. There is an option. That is what we have done. We have a 2-year sunset on this bill that would be at least a reasonable compromise to give us the opportunity to take a hard look at the higher education bill and figure out two issues: how we create low-interest loans over a long period of time and, second of all, how we, in fact, make college more affordable than it currently is.

Let me be a little bit political, as I finish my remarks, and say this: I respect everybody's point of view, and there are different points of view here. But I think what a lot of Americans are asking themselves--they say: Well, let's see. We just had elections in November, and we were told elections matter. We had a candidate for President of the United States, Barack Obama, who won a very decisive victory, who ran on the platform of saying: Hey, I am going to stand up for the middle class. I am going to stand up for working families.

We had an election in which Democrats, Independents, retained control of the Senate. Now there are 54 votes in the Democratic caucus, and almost without exception Democratic candidates--I ran--Independents stand for working families, stand for the middle class.

So what I do not understand is, when we have a Democratic President, a Democratically-controlled Senate, why we are producing a bill which is basically a Republican bill--very close to what the House Republicans passed.

As most people know, the House Republicans are perhaps the most conservative majority in the House that we have seen maybe ever--the most conservative body. They say: This is a pretty good bill. We will accept it.

Well, if the most rightwing Congress in American history thinks this is a pretty good bill, I would hope that many Democrats would say maybe there is something wrong with this bill; maybe we can do something better than that.

The other point I would make, as I did a moment ago--and people have to understand this--a majority of the Members of the Senate voted to keep interest rates at 3.4 percent for another year. Fifty-one Members voted for that. Most people assume that 51 out of 100 is a majority. But we were unable to pass that legislation because of a Republican filibuster.

What we have seen on virtually every single important piece of legislation is that the majority does not rule in the Senate. We need to have a supermajority of 60 votes. The result is legislation like this, which could well end up raising interest rates for students and their families to an absolutely unacceptable level.

So let me conclude by saying we have a huge crisis in this country. The crisis is that today hundreds of thousands of bright young people who have graduated from high school are now saying--now saying--I would love to go to college. I can do it. I would like to be a professional. I would like to be a doctor. I would like to be a nurse. I would like to do one of many professions. I would love to do it. I am smart enough to do it. I have the drive to do it. I just come from a family that does not have the money to send me to college.

So for those hundreds of thousands of young people whose dream it was to go to college, this legislation only makes that situation worse because it will make college even more unaffordable. Let's be clear: This is a loss not only to those families and to those young people; it is a loss to our country.

A couple months ago I had the Ambassador from Denmark come to the State of Vermont to do some town meetings with me.

The Presiding Officer may or may not know the cost of college education in Denmark in terms of out-of-pocket costs. It is zero. It is zero. It is not just Denmark, there are a number of countries around the world that have the intelligence to understand that the most important thing they can do is invest in their young people. So they say to their young people: You do well in school, regardless of your income, and you are going to be able to go to the best colleges we have. Not only the best colleges but graduate school, medical school, law school, and your cost will be zero.

You know what. I think that is pretty smart. I think investing in our young people is investing in the future of our country. That is what some countries do. They make college education free in terms of out-of-pocket cost. Other countries do not go that far.

I live an hour away from the Canadian border. They heavily subsidize college. So we are seeing many American kids now going off to fine colleges and universities in Canada, where even for people from the United States college costs are less than they are in the United States.

In terms of what we are demanding of young people and parents in out-of-pocket expenses, there is no country in the industrialized world that asks more than we do. The result is that we have seen virtually no gain in the last 30 years in terms of the percentage of our people graduating from college.

We have a crisis. It is a crisis which impacts millions of young people: those who have given up on the dream of college and those who are graduating from college deeply in debt.

It impacts our entire Nation. It is insane to me that we are conceding to other countries around the world and saying: OK, you are graduating large numbers of people. You are allowing them to go to college. But we in this great country, we cannot do that. It makes no sense to me at all. It is bad for the future of this country, bad for our economy, bad for millions of families.

The legislation on the floor today only makes a bad situation worse. It is based on variable interest rates. It is, according to the CBO, likely that those interest rates will rise. In 2018, we are talking about subsidized Stafford loans at 7.25; graduate rates, 8.8; PLUS loans, 9.8. Can anybody really come to the floor and tell me this is where we want to go as a country? So we have a bad situation which we have to address, not make it worse.

Once again, I wish to thank all of the Senators who have cosponsored this legislation: Senators LEAHY, WYDEN, WHITEHOUSE, GILLIBRAND, BLUMENTHAL, SCHATZ, MURPHY, and HIRONO. I want to thank the NEA, the largest educational organization in the country, for their support, and the American Federation of Teachers for their support.

Let's stand tall today for the working families of this country who believe in the American dream, and that dream is significantly about the desire of our young people to do better than we have done. That was the dream my parents had. It is the dream that millions of families have had. An important part of that dream is to work hard as a parent to enable my kid to get a college degree.

We are failing millions of families right now. This legislation will make a bad situation worse. We can do better. We can do better. Let's stand with the working families of our country today. Let's reject the underlying amendment, and let's pass the Sanders amendment.

With that, I ask unanimous consent the time during quorum calls be charged equally.

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Mr. SANDERS. Mr. President, I want to thank Senators LEAHY, WYDEN, BROWN, WHITEHOUSE, GILLIBRAND, MERKLEY, BLUMENTHAL, SCHATZ, MURPHY, and HIRONO for supporting this amendment. I also wish to thank the NEA and the AFT, the two largest teachers organizations in the country, for supporting this amendment.

This amendment is very simple. It sunsets this legislation after 2 years, takes advantage of current, relatively low interest rates, and gives us the time to reauthorize the Higher Education Act and come up with sensible long-term solutions to the crisis of student indebtedness and college affordability.

According to the CBO, by the year 2018, under this legislation undergraduate Stafford loans will be 7.25 percent, graduate Stafford loans will be 8.8 percent, and parent loans will be 9.7 percent. We have a crisis right now in student indebtedness. We need to solve that crisis, not make it worse.

I ask for support of this amendment.

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