Mr. Speaker, I move to suspend the rules and concur in the Senate amendment to the bill (H.R. 1911) to amend the Higher Education Act of 1965 to establish interest rates for new loans made on or after July 1, 2013, to direct the Secretary of Education to convene the Advisory Committee on Improving Postsecondary Education Data to conduct a study on improvements to postsecondary education transparency at the Federal level, and for other purposes.
The Clerk read the title of the bill.
The text of the Senate amendment is as follows:
Strike all after the first word and insert the following:
(a) Interest Rates.--Section 455(b) of the Higher Education Act of 1965 (20 U.S.C. 1087e(b)) is amended-- (1) in paragraph (7)-- (A) in the paragraph heading, by inserting ``and before july 1, 2013'' after ``on or after july 1, 2006''; (B) in subparagraph (A), by inserting ``and before July 1, 2013,'' after ``on or after July 1, 2006,''; (C) in subparagraph (B), by inserting ``and before July 1, 2013,'' after ``on or after July 1, 2006,''; and (D) in subparagraph (C), by inserting ``and before July 1, 2013,'' after ``on or after July 1, 2006,''; (2) by redesignating paragraphs (8) and (9) as paragraphs (9) and (10), respectively; and (3) by inserting after paragraph (7) the following: ``(8) Interest rate provisions for new loans on or after july 1, 2013.-- ``(A) Rates for undergraduate fdsl and fdusl.-- Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans issued to undergraduate students, for which the first disbursement is made on or after July 1, 2013, the applicable rate of interest shall, for loans disbursed during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to the lesser of-- ``(i) a rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1 plus 2.05 percent; or ``(ii) 8.25 percent. ``(B) Rates for graduate and professional fdusl.-- Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Unsubsidized Stafford Loans issued to graduate or professional students, for which the first disbursement is made on or after July 1, 2013, the applicable rate of interest shall, for loans disbursed during any 12- month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to the lesser of-- ``(i) a rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1 plus 3.6 percent; or ``(ii) 9.5 percent. ``(C) PLUS loans.--Notwithstanding the preceding paragraphs of this subsection, for Federal Direct PLUS Loans, for which the first disbursement is made on or after July 1, 2013, the applicable rate of interest shall, for loans disbursed during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to the lesser of-- ``(i) a rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1 plus 4.6 percent; or ``(ii) 10.5 percent. ``(D) Consolidation loans.--Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation Loan for which the application is received on or after July 1, 2013, shall bear interest at an annual rate on the unpaid principal balance of the loan that is equal to the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent. ``(E) Consultation.--The Secretary shall determine the applicable rate of interest under this paragraph after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register as soon as practicable after the date of determination. ``(F) Rate.--The applicable rate of interest determined under this paragraph for a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or a Federal Direct PLUS Loan shall be fixed for the period of the loan.''. (b) Effective Date.--The amendments made by subsection (a) shall take effect as if enacted on July 1, 2013.
(a) Paygo Scorecard.--The budgetary effects of this Act shall not be entered on either PAYGO scorecard maintained pursuant to section 4(d) of the Statutory Pay- As-You-Go Act of 2010. (b) Senate Paygo Scorecard.--The budgetary effects of this Act shall not be entered on any PAYGO scorecard maintained for purposes of section 201 of S. Con. Res. 21 (110th Congress).
Not later than 120 days after the date of enactment of this Act, the Comptroller General of the United States shall-- (1) complete a study that determines the actual cost to the Federal Government of carrying out the Federal student loan programs authorized under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), which shall-- (A) provide estimates relying on accurate information based on past, current, and projected data as to the appropriate index and mark-up rate for the Federal Government's cost of borrowing that would allow the Federal Government to effectively administer and cover the cost of the Federal student programs authorized under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) under the scoring rules outlined in the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.); (B) provide the information described in this section in a way that separates out administrative costs, interest rate, and other loan terms and conditions; and (C) set forth clear recommendations to the relevant authorizing committees of Congress as to how future legislation can incorporate the results of the study described in this section to allow for the administration of the Federal student loan programs authorized under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) without generating any additional revenue to the Federal Government except revenue that is needed to carry out such programs; and (2) prepare and submit a report to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and the Workforce of the House of Representatives setting forth the conclusions of the study described in this section in such a manner that the recommendations included in the report can inform future reauthorizations of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
Pursuant to the rule, the gentleman from Minnesota (Mr. Kline) and the gentleman from California (Mr. George Miller) each will control 20 minutes.
The Chair recognizes the gentleman from Minnesota.
Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks on
Is there objection to the request of the gentleman from Minnesota?
There was no objection.
Mr. Speaker, I yield myself as much time as I may consume.
I rise today in strong support of the Bipartisan Student Loan Certainty Act, also known as the Smarter Solutions for Students Act.
After many weeks of delay, I'm pleased we finally have a bipartisan agreement to address the student loan interest rate problem. My colleagues and I have been fighting for months for a long-term, market-based solution that will serve students and taxpayers, and the legislation before us today will do just that.
As you can see in this chart, much like the Smarter Solutions for Students Act approved by the House back in May, the Bipartisan Student Loan Certainty Act will tie student loan interest rates to the market, taking away the uncertainty that comes with allowing Congress to arbitrarily set rates.
Similarly, both bills provide a permanent fix to the interest rate problem, granting students the certainty they need to make smart, fiscally responsible investments in their education.
And most importantly, this legislation, like its predecessor, doesn't unfairly penalize taxpayers. Unlike some half-baked proposals that would put taxpayers on the hook for billions of dollars to pay for artificially low student loan interest rates, both the House-passed Smarter Solutions for Students Act and the Bipartisan Student Loan Certainty Act will generate a small amount of savings over 10 years.
Reports confirm the similarities between the House bill and its Senate companion. MSNBC has said the House bill is ``very similar'' to the Senate proposal. The Minneapolis Star Tribune recently noted the Senate compromise ``closely resembles'' the House-passed Smarter Solutions for Students Act, and the Associated Press called the differences between the two proposals ``relatively small.''
While I'm happy with the legislation we will consider today, I'm disappointed it took us so long to get to this point. Students and their families got roped into an all-too-tumultuous debate and were forced to deal with the fallout when Congress was unable to reach an agreement to prevent subsidized Stafford loan interest rates from doubling on July 1.
By getting politicians out of the business of setting student loan interest rates, the measure we consider today will protect students from future uncertainty. I applaud my colleagues on the other side of the aisle for finally recognizing this long-term, market-based proposal for what it is: a win for students and taxpayers.
Mr. Speaker, I strongly urge my colleagues to join me in supporting
I reserve the balance of my time.
Mr. Speaker, I yield myself 4 minutes.
Mr. Speaker, I rise in support of the Bipartisan Student Loan Certainty Act. It has been nearly a month since interest rates on student loans were allowed to double on millions of our neediest students, but thanks to the bipartisan negotiations in the Senate, we now have a solution that provides real relief. And I want to thank Senator Durbin, Senator Harkin, Senator Manchin, and Senator King for all of their work on this effort.
Thanks to this legislation, over the next 5 years, borrowers across the country will save $25 billion in interest payments. In my home State of California, this bill will cut the cost of college for more than 550,000 students this coming academic year. It was worth the wait.
When we started work on this issue, I said that any long-term solution to student loan interest rates must help, not harm the students or their families, must not make college more expensive, and it must protect students in the future from spiking interest rates. I believe that this bipartisan bill accomplishes that goal.
It locks in interest rates for borrowers when they sign on to their loans; it provides a reasonable cap to protect students from rising interest rates; and it rolls back the doubling of interest rates, saving students and families real money right now.
Today's bipartisan student loan deal stands in stark contrast to the partisan bill passed by the House majority in May. The bill would have made college more expensive by nearly $4 billion to students and their families. It would have subjected students to a bait-and-switch scheme. It offered students teaser rates that balloon annually, leaving students deeper in debt and guessing what they will owe.
If you look at this chart, you will see that, under the bipartisan agreement we're voting on today, it will cost students about $11,363. The current law raises the cost to $14,000, and the bill that passed the House, the Republican bill, was $16,400. So it's been well worth students to have this disagreement, to have this wait so that we could save this kind of money for students and families.
Next year's freshmen who borrow a maximum amount of subsidized and unsubsidized Stafford loans over 5 years would have paid $5,000 more in interest rates under the House Republican plan than under today's bipartisan compromise, and nearly $2,000 more than if we did nothing.
The House majority's solution wasn't a solution at all. Their approach was best summed up by the chair of the Higher Education Subcommittee who recently said, ``It is not the role of the Congress to make college affordable or accessible.''
I couldn't disagree more. That statement explains why their bill piled debt on the backs of students rather than trying to lighten the load.
The Senate bill before us today takes the opposite approach. It saves students and families money.
I understand the concerns that some have raised by this solution. While it provides real relief for the next few years, it does not solve the long-term student debt crisis. We have much more work to do to address the underlying cost of college, and we must remain on guard against any unacceptable rise in interest rates.
In the meantime, we now have a bill that will make a positive difference to families struggling to pay for college.
Today, I ask the Republican majority to drop their support for the original House bill that was so devastating to students and families and, instead, support this bipartisan bill that delivers real interest rate relief for millions of Americans.
I reserve the balance of my time.
Mr. Speaker, I yield 4 minutes to the gentlewoman from North Carolina (Ms. Foxx), the chair of the Higher Education Subcommittee.
Mr. Speaker, I thank the chairman for yielding time.
I rise in support of the Smarter Solutions for Students Act, renamed as the Bipartisan Student Loan Certainty Act by the Senate. It's about time that bipartisanship on this issue won the day in Washington.
Earlier this year, my colleagues and I warmly welcomed the President's ideas to settle how student loan interest rates are calculated. Referencing his plan and his premise that student loan interest rates should be permanently free of politics and set using market interest rates, we introduced, and a bipartisan House majority passed, the Smarter Solutions for Students Act in May, well before rates were scheduled to double on July 1.
Our friends in the Senate were on a much different schedule. Rather than immediately building on the striking similarities between President Obama's initial proposal and the House Republican solution, Senate Democrats chose infighting over completing this important work.
July 1 came and went without any agreement from the Senate. Rates doubled.
But advocates of common sense and bipartisanship made a better case. Last week, Senate Democrats finally chose to support a permanent, market-based solution much like what the President had originally requested and practically identical to our Smarter Solutions for Students Act.
Campaign promises and political posturing should not play a role in the calculation of student loan interest rates. As we've seen, Washington's involvement in the rate-setting equation is a recipe for uncertainty and confusion. Borrowers deserve better.
The Bipartisan Student Loan Certainty Act will apply predictable, market-based interest rates to all Federal Stafford and PLUS loans, ensuring that student and parent borrowers will be able to capitalize with certainty on low rates while being shielded from high rates by specified caps.
From personal experience, I know that paying for college is hard work. It's getting harder as tuition and fees increase, and the vast majority of American households are feeling that pressure.
The need for solutions to help ease the challenge of college affordability is especially acute in today's jobless economy. Many recent graduates took out loans with the expectation that they would be able to find a job to pay off their debt. Now, many find themselves among the 53 percent of their peers struggling with un-or underemployment.
Like our colleagues across the aisle, we want every student to have the necessary, honest information they need to make an informed decision about the financial obligations they voluntarily assume, and we want taxpayer subsidies for higher education to be well-spent, not wasted.
Now, with interest rates settled permanently for students and taxpayers, the Higher Education Subcommittee I chair will continue to look for and promote solutions to help bring clarity to college costs for all students and families considering the investment.
Students, families, and taxpayers deserve a long-term student loan solution, not more can-kicking from Washington. The Bipartisan Student Loan Certainty Act, like the House-passed Smarter Solutions for Students Act, puts an end to temporary fixes and campaign promises that have failed to strengthen our Nation's student loan system. This legislation offers students simplicity and predictability as they prepare to pay for college.
The American people deserve the clarity, certainty, and protection guaranteed by this legislation. I urge a ``yes'' vote.
Mr. Speaker, I yield myself 30 seconds.
I would not want the Members of this House to believe that somehow this bill that we're going to vote on in a few minutes is the same as the Republican bill. This bill saves $25 billion for those students over the next 5 years. The Republican bill that was voted on in this House costs those students a billion dollars. So there's a big difference. As I say, it was well worth the wait.
So let's understand very clearly. The Members of this House are getting a better deal with this legislation if they vote ``yes'' on this bill, both sides of the aisle.
I yield 3 minutes to the gentleman from Connecticut (Mr. Courtney).
Mr. Speaker, I, too, rise in support of the Student Loan Certainty Act and again want to emphasize the fact that, compared to the product that came out of this Chamber on May 23 that the majority passed on a partisan, party-line vote, on which the White House issued a veto threat, the final bill that's before us here today is a far superior piece of legislation that protects students.
Again, as Mr. Miller said, the numbers don't lie. The bill that the Republicans passed on May 23 had a 4.3 percent interest rate, which was a teaser rate. The bill that's being passed here today is 3.86 percent, and over time, that nets about $5,000 of additional savings for students. That's real money, and that certainly is something that's worth the wait.
But what I want to point out is that there is actually, in my opinion, a more fundamental difference which is so critical for borrowers, which is that this piece of legislation will fix the rate at time of origination. In other words, when students take on these 10-year notes, which is what Stafford student loans are, the rate is fixed at the time the note is written.
The bill that came out on May 23 was a floating variable rate product which would not be set until the time that students commenced payment. Some students take Stafford loans out over a period of 5 and 6 years, so the rates that they were touting back on May 23 were an illusion. They were not what the rate was that the student actually was going to be paying.
And again, for this country, which went through the trauma of the subprime mortgage variable rate fiasco, this is a critical difference which provides greater protection for the borrower.
If you go online today, a 30-year mortgage for a house is about 4 percent, for an auto loan it's about 3.8 percent. They are fixed loans if you took those loans out today. And that's exactly what this compromise creates is that there will be real borrower certainty and protection, unlike the bill that recklessly, and on a partisan, party-line basis, flew out of this Chamber on May 23.
This is a better deal for America's students. It's why, again, the process that we went through was worth it. And again, it's certainly worth people's support.
At the end of the day, though, let's remember, students are still paying into the deficit of this country. The Congressional Budget Office has told us over 10 years, $184 billion of revenue is going to be generated through this program towards the deficit.
We need to change that. That's not the purpose of the Stafford student loan program. When Senator Stafford from Vermont passed it many years ago, it was about providing an affordable system of access for higher education, not a cash windfall for the coffers of the government.
And that's why we have more work to do. That's why we need to pass a Higher Education Authorization Act which, again, balances these priorities in the right direction for students, not for government coffers. And again, this legislation gives us the time to address that issue and come out with an even better program for students which, again, is good for them and good for our country, to make sure that we have a workforce which is ready for the challenges of the future.
Mr. Speaker, I yield 2 minutes to a member of the committee, the gentleman from Nevada, Dr. Heck.
Mr. Speaker, I rise in strong support of the Bipartisan Student Loan Certainty Act of 2013.
As the first in my family to go to college--and as a parent--I fully understand the value of a high-quality education and the opportunities it provides. I also know that accessing higher education is not cheap. I just started paying back the student loans of my daughter. I'm still paying back my student loans for medical school.
Throughout Nevada, many new high school graduates are preparing to head to college this fall. Without this bipartisan compromise, originally proposed by the House Committee on Education and the Workforce and based largely on the President's own proposal, students face significant uncertainty over their student loans. This legislation provides a permanent, market-based solution that gives students and taxpayers the certainty they need and deserve. Additionally, by ensuring the interest rates are set by the market, rather than legislators, this bill rightly takes politics out of the student loan discussion.
While we must continue our work to address the skyrocketing costs of higher education--because the much greater issue is the total indebtedness upon graduation--this bill is an important step in addressing the near-term needs of students.
I strongly support H.R. 1911 and urge the passage of this important bill to help not only Nevada students, but students throughout our Nation.
I yield 3 minutes to the gentleman from New York (Mr. Bishop).
I thank the gentleman for yielding.
I rise today in support of the underlying legislation. Although this compromise is far from perfect, it is a step that must be taken in order to provide financial relief to American students and their families.
This legislation will bring undergraduate interest rates back under 4 percent for the upcoming academic year--a far more sustainable and appropriate level than the current 6.8 percent rates. Graduate students and parents will also benefit from lowered interest rates within this bill. Importantly, and in contrast to the bill that previously passed the House, the legislation also locks in those interest rates for the lifetime of each annually disbursed loan, providing student borrowers with critical consumer protections and a measure of predictability. Finally, this compromise provides interest rate caps for all student loans, offering an essential safety net to protect students and their families from the whims of market-based rates.
While this isn't a bill that I would have written, we must all recognize the urgency of our current situation and pass it today. Classes are starting at many institutions within just a few weeks. Students around the country are signing master promissory notes even as we speak, committing themselves to years of debt and loan repayments in order to make an investment in their future. At the very least, this Congress has the responsibility to momentarily end the political gridlock that paralyzes our Nation and notify these hardworking student what their interest rates will be.
However, let's not think for one second that our work on college access and affordability is now complete. With the Congressional Budget Office projecting interest rates of 10-year Treasury notes--the baseline that determines student interest rates--to rise significantly over the next 5 years, we must work proactively and cooperatively to assure affordable student interest rates not only for present students but future students as well.
American student loan debt stands at $1.1 trillion. And it continues to rise. The Federal Government continues to make a huge profit on student loan repayment, even as students are forced to shoulder more of the burden than ever before. Balancing our deficit on the backs of student is simply not right, especially when considering the broader economic impact of saddling students with untenable amounts of debt.
When borrowers are forced to devote huge chunks of their paychecks to student loan repayment, it means they will have less income to spend on major purchases like homes or vehicles. They are less likely to start a business. They are less likely to invest in retirement accounts or the stock market--all negative indicators that will affect our economic prosperity now and into the future.
Mr. Speaker, a college education has represented a path to the middle class for millions of American families. Taking direct action to bring down the cost of a college degree by lowering student loan interest rates is a step in the right direction. I urge my colleagues to support this bill.
I yield 2 minutes to another member of the committee, the gentleman from Pennsylvania (Mr. Thompson).
Thank you, Mr. Chairman, for yielding.
Mr. Speaker, as an original cosponsor of H.R. 1911, the Bipartisan Student Loan Certainty Act, I rise in support of the Senate amendment to H.R. 1911.
President Obama, as part of his budget request, proposed returning student loan interest rates to a system of market-based variable rates tagged to the 10-year Treasury note.
As a member of the Education and Workforce Committee, I can attest the committee staff and members worked in good faith to meet the President's request, developing a bill that could pass the House and promote certainty for student borrowers. The House moved to pass the bill in May, reasserting that access to education for so many of America's young people should not be subject to annual political battles. Unfortunately, the Senate chose politics over students and delayed passage of the legislation until last week.
The positive is that H.R. 1911 is a complete departure from what had become an annual debate within Congress on how to set the rates for student loans. This measure modifies how interest rates on most Federal student loans are set, returning to a system under which interest rates are tied to market rates, but with rates fixed for the period of the loan. It would apply retroactively to any loans since July 1, when the 3.4 interest rate on Stafford loans rose to 6.8 percent.
This bill will transition the student loan system to one that is more predictable and affordable--one that protects both taxpayers and students. We have a responsibility to America's youth. We have a responsibility to the students such as those seeking opportunities at Penn State, Pitt, Lock Haven, Clarion, Edinboro, Juniata, Dubois Business College, and South Hills. We have to put forward a long-term plan for college affordability. This bill is a good first step and will offer students the lowest possible rate for higher education while ensuring the solvency of these important loan programs.
I urge my colleagues to support this commonsense, bipartisan legislation.
I yield 3 minutes to the gentleman from Colorado (Mr. Polis).
I'm very pleased that finally we are taking action on the pressing issue of college affordability for constituents of mine across Colorado and Americans across our country.
Absent congressional action, the current law today has effectively doubled the interest rate that our neediest families pay to be able to borrow money for afford college to 6.8 percent. I believe that the previous bill that passed the House was better than the doubling to 6.8 percent. It would save families money in the short- and medium-term while Congress worked through a final solution. But I'm very proud to say here today that this bill is far better. And I encourage my colleagues on both sides of the aisle to support this bill, which has several features that are strong improvements over the original House-passed version, including a fixed interest rate for the life of the loan so that our students are not beholden to the fluctuations of the market when they can least afford it--after they graduate.
This bill would keep interest rates low for our neediest students and their families, providing some certainty and some surety. Under this bill, the typical undergraduate student borrower this year will save $1,500 over the life of a loan. A graduate student will save over
This bill is a step towards making sure that our student loan system is not subject to the whims of Washington every week, with arbitrary expirations and control over the interest rate. We have to make sure that our students are able to plan their futures.
This bill is but the first step in the much-needed reforms that we need as we reauthorize the Higher Education Act. I encourage all of my colleagues to support this bill to keep college affordable now, and I hope that my colleagues will be able to consider Representative Petri's and my H.R. 1716 bill as we look towards long-term solutions.
The ExCEL Act, H.R. 1716, would replace this complicated array of loans, subsidies, deferments, forbearances, and repayment options with a single loan repaid through simplified and improved income-based repayment. One of our goals is to protect our neediest Americans. Income-based repayment is a better tool than interest subsidies. While interest subsidies are based on a student's family income before school, income-based repayment ensures that students are protected when they truly need it--when they graduate from school, if they go through tough times, or if they're in a service-related profession. Under the ExCEL Act, we include strong borrower protections so our neediest students after graduation will be paying effectively a zero percent rate for the balance of their payments.
We need to pass this bill now and send it to President Obama to prevent our students this fall from paying 6.8 percent. I hope we can continue the discussion and dialogue about thoughtful student loan reform proposals like the ExCEL Act that address keeping college affordable for American families.
I am so grateful the Democrats and Republicans have come together to, hopefully, pass a bill here today that will be able to be brought to President Obama for his signature to provide some commonsense and predictability by lowering the student loan interest rates from 6.8 percent, which they are under statute today, and putting us on a path toward fiscal sustainability.
I urge my colleagues to support this bill.
Mr. Speaker, can I inquire as to how much time is remaining on each side?
The gentleman from Minnesota (Mr. Kline) has 10\1/2\ minutes remaining. The gentleman from California (Mr. George Miller) has 7 minutes remaining.
Thank you, Mr. Speaker.
I yield 3 minutes to another member of the committee, the gentleman from Indiana (Mr. Messer).
Mr. Speaker, I rise today in support of the Smarter Solutions for Students Act, also known as the Bipartisan Student Loan Certainty Act. I commend Chairman Kline; our Education Subcommittee chairwoman, Ms. Foxx; Ranking Member Miller; and others for their hard work and diligence throughout this process of getting this bill where it is today.
I am pleased that cooler heads have prevailed and Senate Democrats finally have agreed to the commonsense solutions proposed months ago by House Republicans and the President in his budget to stop interest rates on student loans from doubling. This is a good deal for 11 million students. The rates are better in this agreement. Students will save an estimated $1,500 in interest over the life of their college loans as a result.
Those beneficiaries include more than 200,000 students in Indiana alone, who will be taking out their student loans this year. It will help young people like John Houston, a Ball State University student and intern in my office this summer, who will be taking out student loans as he heads back to school this fall. Getting Congress out of the business of randomly setting interest rates is a good deal--both for students like John and taxpayers.
The bill will allow students to benefit from lower interest rates and prevent taxpayers from being forced to subsidize arbitrary rates set by politicians for political reasons rather than for policy purposes. Maybe most importantly, Mr. Speaker, this legislation shows that, even in a challenging partisan environment, Congress can come together and work on behalf of the American people to make their lives a little easier. I hope this agreement builds momentum for reaching bipartisan solutions to other problems that our Nation faces.
I urge my colleagues to support this measure.
Mr. Speaker, I yield 2 minutes to the gentlewoman from Texas (Ms. Jackson Lee).
(Ms. JACKSON LEE asked and was given permission to revise and extend her remarks.)
I'm just delighted to be able to say that the leadership of the Senate realized that the Republican bill would have overwhelmed our young people.
I was just talking to someone just a few minutes ago, and they were saying we need to have a commitment that every person that graduates from college has a job. We should also have a commitment that every young person that wants to go to school and get a higher education should not be burdened with hundreds of thousands of dollars of debt.
For over 2 years, our good friend, Mr. Courtney from Connecticut, Democrats, the Education Committee, and Mr. Miller have been begging on behalf of the American children to not cause them to pay this enormous amount but to hold the interest rates for middle class families and working families at 3.4 percent. And we struggled. There were many discussions in the United States Senate. And the reason why they continue to struggle is because they wanted to make sure that the victory came out for those young people of working parents and middle class parents. That's why we're here today--because they held out and we held out. Now we're glad to be in a bipartisan mode. But it's important to note that this was a struggle.
If we pass this bill and get it on the President's desk, the 3.6 percent or so will be held. As we go forward over the years, we'll have a measured increase. Not a high increase to market rates or rates higher than that, but a measured increase or 3, 4, or 6 percent. And then some 5 years out, when it reaches about 7 percent, we'll have the ability as a Congress to come back and look. Because we should not burden our students to the point where they cannot get an education.
We all are created equal. Maybe education is not written in the Constitution, but certainly the opportunity for the pursuit of happiness. Therefore, the opportunity for education must be protected.
This is a crucial difference between the bipartisan Senate bill of $11,000. The current law right now is $14,000. And what the House Republican bill passed was almost $17,000.
Mr. Speaker, this is a relief. This is to be applauded. And I'm delighted that we have finally come to our senses.
Today the House of Representatives will have a second chance to get Student Loans right. This is an opportunity to relieve the fears and anxiety of families of college bound students across the nation by passing H.R. 1911--the Bipartisan Student Loan Certainty Act of 2013. By passing this legislation the Congress can take a concrete step toward restoring the economic security, educational opportunities, and peace of mind of America's students.
The goal of our nation should be to educate our youth to reach their greatest potential in life. A good education should be accessible and affordable to all of your young people.
For too long, millions of America's best and brightest have been waiting for Congress to find a responsible solution to rising student loan interest rates. While House Republicans have insisted on saddling students with even more debt, the bipartisan legislation we passed today seeks to ease that burden.
This bipartisan compromise offers hardworking students and families critical protections, reduces rates on all new loans this year, and saves undergraduates $1,500 on average over the life of their loans.
The plan caps market-based interest rates, ensuring students won't bear the brunt of skyrocketing rates in the future. While the House Republican bill considered earlier this year only offered uncertainty, insecurity, and more debt for our students, the Senate compromise that we are considering today will restore a sense of security for nearly 11 million Americans who are seeking a better life through higher education.
The passage of the College Cost Reduction and Access Act of 2007, Congress made historic investments in student aid. The law did what Congress should always do when considering the needs of students seeking education to improve their chances of success. This bill halved interest rates on need-based federal student loans to 3.4 percent--making these loans more affordable for low- and middle-income students. If Congress doesn't act before July, the rate will jump back up to 6.8 percent, making it much more difficult for many American students and their families to afford a college education.
I represent colleges and universities in my District who serve the higher education needs of tens of thousands of Houstonians and others who come to our city for its education opportunities.
A college education should not be only for the lucky few, but should be available to all of those with skill and determination. Given the opportunity, millions of young and older Americans would access higher education to provide their families with a more certain financial future, while also strengthening our nation's economic and national defense human capital. A college degree is also becoming essential to a growing number of jobs in the 21st century economy.
STEM workers earn 26 percent more than non-STEM graduates.
By 2018 we will need: 710,000 Computing workers, 160,000 Engineers, 70,000 Physical Scientists, 40,000 Life Science workers, and 20,000 Mathematics workers.
STEM Computing Jobs are critical to America's future: Software engineers, Computer networking workers, Systems analysis, and Computer researcher or support workers.
College student STEM retention according to the President's report is improved when students have the proper peer and instructor support system, which is what Superintendent Dr. Soner Tarim has done at each of the area's 17 Harmony Schools.
By providing access to an affordable education we are eliminating the shortage in two ways by: (1) creating opportunities for Americans to prepare for STEM careers, and (2) by welcoming those from other countries who choose to study and remain in the United States to work.
According to the Association for Computing Machinery K-12 computer science education as a component of STEM education would help students have a deeper understanding of the fundamentals of computing, which is a critical foundational knowledge for a wide range of education needs for other STEM education programs and future jobs.
We know that fewer than 40 percent of new college students enter College intending to get a STEM related degree. This is not good enough for America--we need to do much better.
By making college more affordable and accessible we could increase the retention of the STEM degree majors from 40 percent to 50 percent, if we reach this goal the nation can meet three fourths of the 1 million STEM workers we will need.
Minority college students who major in STEM higher education make 25 percent more than minority graduates with non-STEM educations. Minority students who take STEM jobs make 50 percent more than minority non-STEM graduates.
Students and families cannot wait any longer to know how much they will owe on their student loans in the coming academic year. Making college more affordable is critical to sustaining America's economic competiveness. Business leaders know it is vital for the workforce of tomorrow to get an education beyond high school. If more of today's students cannot afford college, businesses will not have the workers with the education and training they need to keep our economy competitive and dynamic far into the future.
I urge my colleagues in joining me in support of this Student Loan legislation.
PROJECTED INTEREST RATES UNDER SENATE BIPARTISAN AGREEMENT
Below are the projected interest rates under the bipartisan Senate agreement for 2013-2023:
Mr. Speaker, I have no other speakers, and I'm prepared to close.
I have no further speakers.
Mr. Speaker, in closing, I want to thank the chair of the committee for bringing this bill to the floor as soon as it was possible to do, but certainly before we break for August.
This legislation, as I said earlier, is a vast improvement over what we voted on before and what was presented to this House. I think families all across the country with students heading off to college or returning to college this fall will be happy to know that as they take out a student loan this year, they will save over the next 5 years some $25 billion because those loans that they take out will have that interest rate guaranteed at that rate today and for the life of that loan.
Big distinction between this bill and the bill that was presented for the House to vote on, which many of us rejected but the Republicans supported and was passed to the Senate. Over the next 10 years, it provides about $4 billion in additional relief.
What's important to know is that this will deal with making college more affordable. But, clearly, what is on the agenda of the Education and Workforce Committee is making sure that we're dealing with the cost of college so that we can reduce the student debt in this country, we can reduce the affordability of college in this country.
We expect that as we struggle to try to figure out how to provide this loan money on behalf of the taxpayers to these students who are the future of our economy, the future of our society, that the institutions will struggle with seeing what they can do to lower the cost of these colleges.
This is a very exciting time in postsecondary education because we have opportunities now with technologies and the ability to present classes in new formats, in new forums for students much differently than in the past. We've got to make sure that we're providing that quality education, but perhaps in a way that's more cost efficient. And efficiency isn't the enemy of intellectual curiosity or intellectual achievement or scholastic achievement, but it may be helpful to those families who are struggling with a debt to provide one, two, or three children a college education, or for those students who graduated who are struggling with that debt as they enter the job market.
So we really want to say that we've done the best we can under these circumstances with this legislation, but we expect the institutions of higher education all across this country to reexamine how they're doing their business and what they can do to reduce the cost of college. And we'll continue to do our part, trying to make it more affordable for the American family.
But in the past, we've seen where we put money in at the top and the States took the money out at the bottom. We're not going to play that game anymore, and we can't play that game anymore. That has ended up with a lot of increased debt on the part of students. Certainly with respect to the public institutions, the States have to step up and share the responsibility for their public institutions. We cannot have this situation where they continue to decline their support and then foster that off on parents and students, and then the parents and students need help from the Federal Government. That chain has got to stop here.
But I think today, this is a big and important step in terms of the affordability of college for students. And all of the indicators are that that college degree is well worth it over the lifetime of work of students, over the types of jobs that they will get, the types of wages that they will receive. It's still a huge benefit. There has been a lot of discussion over the last few months that maybe college isn't worth it anymore. It is, but we have to do it right. And young people have to be able to obtain that college education, and they have to do it with the least amount of debt possible.
With that, I yield back the balance of my time.
Mr. Speaker, I yield myself the balance of my time.
It's always interesting to listen to the debate here on the floor. No matter how hard we try to use the word ``bipartisan,'' we get into these partisan squabbles: the Republican bill was bad and this bill is good, and that bill is--look, we needed to change the status quo, and that's always hard to do.
We had some pretty simple goals here that we were trying to reach. We wanted to get out of the partisan political squabble that was occurring in this city every year as we tried to figure out, through some alchemy, what the student loan interest rate ought to be. The answer has been in front of us for a long time: the market is the best determiner of that.
So we wanted to put together legislation that would get us out of this political squabble, let the market do this in a way that was fair to students and fair to taxpayers. Let the market do it based on the 10-year Treasury, which is the best indicator of what it costs the Federal Government to borrow money; do it so that it was as close to budget neutral as we could get it.
The President of the United States had a proposal that did those things. At the end of 10 years, I think the President's budget saved the taxpayer about $3 billion. The House bill that we've been discussing saved the taxpayers about $3.5 billion, And this bipartisan Senate bill, just under $1 billion saved. That's budget neutral in this city, in a 10-year window, from the Congressional Budget Office. We're trying to get that.
It was a bizarre circumstance, Mr. Speaker, that I and House Republicans were working with the White House and the Department of Education trying to convince our Senate colleagues, Senate Democratic leadership that the answer was there in front of them, all they had to do was pick it up and pass it. We can get it done in this House. We can answer the questions of parents and students and put some certainty in this. I am very, very pleased that the Senate was able to put together that bipartisan--
Will the gentleman yield?
I yield to the gentleman from California.
I didn't mean to interrupt. I thought you were going to yield back your time. I just wanted to ask you for 30 seconds. I thank the gentleman for yielding.
We have these differences at the Member level and the institutional level.
I just forgot, before I sat down, to thank the staffs of both sides of our committee for their professional work. Because whatever's going on on the surface here and surface warfare, we know that, underneath, the staff is trying to make it work out whatever direction we decide to move in. So I just want to thank so much the staff both of the majority and minority side for their help.
I thank the gentleman.
Reclaiming my time, I will pick up on that note because we could not have done this without the hard work of some really instrumental people.
Certainly, I'd like to take a moment to recognize and thank the committee staff, as my colleague has done, for their hard work on this important issue, both sides of the aisle.
First, I would like to thank the majority staff director, Juliane Sullivan; our education policy director, James Bergeron; and professional staff member Brian Melnyk; and of course Amy Jones, sitting next to me here today, who started working to solve this problem more than a year ago. That's the frustrating thing here, Mr. Speaker. This problem didn't arise in April or May. We've known for more than a year, with certainty, that we had to address this issue. So I thank Amy for her passion in all higher education work. I know she's just resting up so that we can start into reauthorization of the Higher Education Act as we go forward.
Certainly I'd like to thank Virginia Foxx, the chairman of the Subcommittee on Higher Education and Workforce Training, who helped craft the Smarter Solutions for Students Act. Again, I would remind my colleagues, this was a bipartisan bill. It came out of the committee bipartisan, came off the floor with a bipartisan vote, and Ms. Foxx deserves a lot of credit for her hard work.
In closing, I remind my colleagues, the legislation before us today is a victory for students, families, and taxpayers. It deserves our robust support.
I urge my colleagues to vote ``yes'' on the bipartisan Student Loan Certainty Act, and I yield back the balance of my time.
Mr. Speaker, today I will vote for H.R. 1911, the Bipartisan Student Loan Certainty Act of 2013. Due to congressional inaction student loan rates doubled to 6.8% on July 1st. This is not the bill I would've written but it was necessary to come to an agreement so that today's students don't see their interest rates double. It would have been my preference to pass the legislation introduced by Senator Elizabeth Warren that gives students the same low interest rates that the Federal Reserve grants Wall Street banks.
With passage of H.R. 1911, this year's students will only pay a 3.8% interest rate when they go back to school in the fall. This rate will be locked in for the entire life of their loan. Although the interest rates will likely increase for future students under this bill, they should remain below the current 6.8% for the next few years. This is a short term solution to the long term problem of rising college costs and increasing student debt. I stand ready to work with my colleagues to address the issue of college affordability including student loan interest rates in the upcoming reauthorization of the Higher Education Act.
Mr. Speaker, as you may know, on July 1st the rate for subsidized Stafford student loans doubled from 3.4% to 6.8%. Today, students already face over $1 trillion in student loan debt nationally and any effort to further indebt hardworking students and families would be disgraceful. This Congress needs to act in a responsible fashion in order to help alleviate the cost prohibitive status of higher education in this country. Today, I am pleased to say that this Congress has acted to help students and families by putting forward H.R. 1911, the Bipartisan Student Loan Certainty Act of 2013, legislation that I am proud to support.
Unlike the proposals floated earlier this Congress by the House majority, this bill offers students and families a reasonable way to finance higher education. As opposed to rates that fluctuate throughout the life of the loan, H.R. 1911 allows for a variable rate for new borrowers that adjusts yearly but is fixed for the life of the loan once borrowed. Further, the bill offers lower interest rates for undergraduate borrowers of subsidized and unsubsidized Stafford loans by pairing them to the 10 yr Treasury (T) bill + 2.05% as opposed to the 10 yr T bill + 2.5% in the original House majority proposal. Lastly, the bill offers interest rate caps for borrowers to ensure that interest rates do not soar to undesirable levels in the years to come.
If this bill is signed into law, rates on new subsidized Stafford and PLUS loans will go down this year. Undergraduates would borrow at 3.86%, a cut from 6.8%, graduate students would borrow Stafford loans at 5.4%, a cut from 6.8% and parents and graduates borrowing PLUS loans would borrow at 6.4%, a cut from 7.9%. For a freshman undergraduate beginning school this year and taking out the maximum amount of loans, he/she will save $3,300 in interest payments over their college career as compared to current law and undergraduate students would save $25 billion in debt relief, according to CBO projections, over the next five years as compared to current law. While this bill represents a significant improvement for students, I do have reservations that the undergraduate interest rate cap, currently set at 8.25%, is too high. While it is widely believed that students will enjoy low rates in the short-term, there is a strong possibility that rates will skyrocket as our national economy improves. I believe that, for undergraduates, a lower cap should be considered and I would welcome its continued review by this Congress in the years to come.
Overall, Mr. Speaker, this is a good bill that will give students and families alike significant financial relief and stability in the years to come.
Mr. Speaker, I rise today to express my opposition to the Motion to Concur in the Senate Amendment to H.R. 1911, the Smarter Solutions for Students Act.
This bill returns federal student loans to a system of market-based variable rates, an imprudent policy that seeks profits for deficit reduction at the expense of students struggling with the substantial and climbing cost of post-secondary education.
While the bill may appear to reverse the interest rate hike that occurred on July 1, setting rates at 3.8 percent for this year and 4.6 percent for next year for undergraduate Stafford student loan borrowers, it is essentially a bait and switch that will pile extra debt onto students when the current record-low rates inevitably rise.
This is unacceptable. Student loan debt is a major drag on the American economy, reaching $1 trillion and climbing, and recently surpassing credit card debt as the largest form of consumer debt. Approximately 60 percent of students take out loans to attend college, and increasing the costs of borrowing will prevent millions from being able to pursue higher education.
While the interest rate caps are a step in the right direction, they are too high to meaningfully protect students when the temporarily low rates give way to rates that are even higher than the 6.8 percent rate this bill attempts to fix.
College educated students are the future engine of our country, and anyone who wants to pursue a post-secondary education should have the opportunity to do so without going into crushing debt. I urge my colleagues to vote against this legislation and instead, extend the current interest rate of 3.4 percent until Congress enacts a true long-term solution to the cost of college that is worthy of our Nation's young people.
The question is on the motion offered by the gentleman from Minnesota (Mr. Kline) that the House suspend the rules and concur in the Senate amendment to the bill, H.R. 1911.
The question was taken.
In the opinion of the Chair, two-thirds being in the affirmative, the ayes have it.
Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
Pursuant to clause 8 of rule XX, further proceedings on this motion will be postponed.
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