Cantwell: Senate Should Reconsider Student Loan Debt Bill
WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA) spoke on the U.S. Senate floor about the need to address rising student loan debt and to express her disappointment in the Senate’s failure to reach a final vote on the Bank on Students Emergency Loan Relief Act.
Below are excerpts from the speech, followed by a full transcript:
- “I want to thank my colleague, Senator Warren, for sponsoring that bill and for my colleagues who did support that, and I hope that we will have chance to bring this legislation up again and get bipartisan support and get it passed.”
- “We can all agree that education is the gateway to opportunity. I was the first in my family to go to college and went to school with the help of financial aid. I know how important it is to many students in the State of Washington that we help them make education more affordable.”
- “Over the last four years, student debt has even surpassed credit card debt. The fact that student debt is enough to pay every American’s credit card balance and still have $450 billion left over, tells you how much debt is being accumulated on behalf of students.”
- “We can't make an investment in education on the backs of these students when they're coming out of college with this much debt or trying to struggle even to learn these careers that are so vital to our economy.”
- “I hope my colleagues on the other side of the aisle will look again at this issue and get back to it. We need to make sure that college education is more affordable. It's time for us to extend the same benefits that we do for businesses and mortgages to students, so that they can refinance and that 25 million students in America could refinance their student loans.”
Full transcript of Cantwell’s speech:
“Thank you, Madam President.
I rise to express my disappointment in today's earlier vote that we weren't able to pass the student refinancing legislation. I want to thank my colleague, Senator Warren, for sponsoring that bill and for my colleagues who did support that, and I hope that we will have chance to bring this legislation up again and get bipartisan support and get it passed.
We can all agree that education is the gateway to opportunity. I was the first in my family to go to college and went to school with the help of financial aid. I know how important it is to many students in the State of Washington that we help them make education more affordable. Student debt in this nation has quadrupled over the last ten years, and so the total amount of debt is $1.2 trillion. Many students in my state are anxious about this situation and they want to do something about it.
Over the last four years, student debt has even surpassed credit card debt. When you think about that, the fact that student debt is enough to pay every American’s credit card balance and still have $450 billion left over, tells you how much debt is being accumulated on behalf of students, just to get an education, just to basically make their way in a changing economy. We do live in an information age and it means that everybody having a good base education and being able to adapt as new information comes along that changes industry is going to be critically important. And, so the fact that student debt is now the second source of personal debt in America only behind mortgages puts a drag on our economy.
Those who are suffering under this are real individuals. We just had a roundtable in the State of Washington last weekend with some of the best and brightest at the University of Washington and these students talked about how they were trying to invest in their own skills so that they could advance in their education. Many of the stories that they told were not really out of the ordinary, but I think it is something we don't think about. And in a lot of these cases these individuals were talking about how they were trying to get an education and other people in their family -- their brothers and sisters -- were trying to get an education. And their parents were also trying to upgrade their skills because in an information-age economy, that's what happens -- everybody has to upgrade their skills. These students are trying to do everything. But I was really moved by one student who said, I have a debt that seems to be the size of a mortgage for me, but I don't have the house that goes along with it. You know he was trying to say, I’m coming out of college with incredible debt and how am I going to even afford the basic things that people look forward to, maybe not right after graduation but as they start their careers and they start to move forward?
These are individuals who contribute to our economy. They buy cars, they buy homes, everything. But this individual, a graduate of Central Washington University, told me that he pays the same amount for rent as he does for student loans every month. So in Washington State, the average student borrower owes more than $23,000 before they graduate. That's an increase of 22 percent over the last five years, $4,000 for the average student borrower at the University of Washington. Over the next weeks, thousands of students in Washington State will walk across the stage and get their diploma, but when they accept the diploma and go into the world of opportunity, they will also be going with a lot of debt.
We also heard from another student at the University of Washington, how at this point in her career when she graduates, the debt will be almost $100,000. She wants to pursue a career, but when she thinks about how much she has to pay on that student loan, that's going to affect that. In fact, during her time at the University of Washington, there were points in which she worked 60 hours a week. Now, I don't know how anybody can continue their education and work 60 hours a week. So these are students who want to be able to refinance and pay down. In this case, somebody who has a 6 percent or 7 percent interest rate, this bill, legislation, would allow them to refinance. The legislation, an undergraduate with $30,000 in student loans, for example, would save almost $5,000 over the life of their loan by refinancing, if it was an interest rate of 6.8 percent to the current undergraduate direct interest rate of 3.86 percent. That is real dollars to these individuals. That means much-needed help for 25 million borrowers across the country. It could save those borrowers, on average, $2,000 per loan. And in my state it would mean relief for 451,000 students just like the ones we just spoke to last week.
Our students from everywhere across the state -- I don't know if we have that chart -- the University of Washington and the Pacific Northwest took action into their own hands and produced their own report. The report showed that the typical University of Washington student would have to work 54 hours a week for a full year to pay for one year of student education. I’m so proud that these students did their own report and got it on the front page of the Seattle times because it really spells out what we already have known. The days when students could just raise the amount of money they needed for education by doing summer jobs, is gone. The burden of debt and amount of money owed is just impacting students. There is no way they can work their way through college at 54 hours or 60 hours a week and be able to do their academic work. So entrepreneurial activity among 20-to-34-year-olds is a challenge. The Federal Reserve Bank of New York has found for the first time that people with student loan debt are less likely to buy house than those without. It’s showing up in our economy, so if you think about it, if this is what a generation of Americans are going to be faced with for the next decade or two, then that's going to have a ripple effect through our economy for several years.
A recent study by the Brookings institute found that student loan borrowers are 60 percent to 70 percent less likely to apply for graduate school than those without student debt. So, again, now we have another complexity. Madam President, I look at this issue and I look at the fact that we have a worldwide demand for 35,000 new airplanes. We need 20,000 new workers in the aerospace industry. We have demands for computer scientists, something like 300,000 a year. We only graduate 70,000. I look at it and say, why aren't we helping to finance everybody who wants to get an engineering degree and computer science degree? Why aren't we figuring out a way to make that more affordable? Because in an information age economy that's exactly what we need to do, make an investment in education. But we can't make an investment in education on the backs of these students when they're coming out of college with this much debt or trying to struggle even to learn these careers that are so vital to our economy, and they have to choose between working and actually studying. We'd rather they commit themselves to these careers and these educations so we can have the workforce of the future.
Now, I know some of my colleagues on the other side of the aisle didn't support this legislation, but the Congressional Budget Office projects that the bill would actually reduce the deficit by about $14 billion over the next decade. That's important because we want to see policies that are going to help our economy in the short-run, in the long-run, but they have to be fiscally responsible.
I want to make sure that those critics who say, oh, well if you make the interest rate lower that students are going to borrow more money ... I don't think that students are looking to borrow more to add to their debt. I don't think students that I talked to, who had loans as high as $180,000, want to borrow more money just because you are going to reduce the interest rate. They want to refinance, reduce their obligation and get back to studying. There's much more that we need to do to mitigate the costs of higher education and I know my colleagues and I are going to be working on that. But the Bank on Students Emergency Loan Relief Act was a very good step to help students and to focus them on their careers and their education. So again, I hope my colleagues on the other side of the aisle will look again at this issue and get back to it.
We need to make sure that college education is more affordable. It's time for us to extend the same benefits that we do for businesses and mortgages to students, so that they can refinance and that 25 million students in America could refinance their student loans. So I thank Senator Warren for bringing this issue up, and I hope we will get back to it again. Madam President, I yield the floor.”
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