07.24.13

U.S. Senator Tammy Baldwin Delivers Senate Floor Speech on Student Loans

Supports Reed-Warren Amendment, Opposes Washington Deal that is wrong for Wisconsin Students and Families

Washington D.C. – U.S. Senator Tammy Baldwin today delivered remarks the floor of the United States Senate regarding today’s debate and votes on student loan legislation. Baldwin announced her support for the Reed-Warren Amendment, which would provide greater certainty and lower interest rates for students and middle-class families, “The Reed-Warren amendment, which I proudly co-sponsor, would propose a lower cap to protect student borrowers,” Baldwin said.

She also voiced her strong opposition to the Manchin-Burr bill, which would result in higher interest rates for students in the coming years and instead of closing tax loopholes for the wealthy, use the profits from student loans to reduce the deficit.

“I am disappointed that we have reached the point where debates about the future of college affordability are less about the lives of students and their families and more about protecting loopholes for corporations and the wealthy,” Baldwin said, “Unfortunately, the Student Loan Certainty Act on the floor today is a step in the wrong direction. A college education should be a path to prosperity, a path to the middle class, not a path to indebtedness. Not only does this legislation raise long-term loan rates for students, it fails to close tax loopholes, and does not ask the wealthy to pay their fair share.”

Before student loan interest rates went from 3.4 percent to 6.8 percent on July 1 due to Congressional inaction, Senator Baldwin supported two pieces of legislation that would have closed tax loopholes for the wealthy and capped the student loan interest rate at 3.4 percent. Both proposals received majority support, but didn’t receive the necessary 60 votes in the Senate to move forward.

Student loan legislation is expected to be voted on in the U.S. Senate today.

Watch Baldwin’s speech here.

Below, full remarks as prepared for delivery.

U.S. Senator Tammy Baldwin’s Senate Floor Speech
Wednesday, July 24, 2013

Making college affordable is one of the most important steps we can take toward completing our economic recovery and ensuring a path to the middle class for all Americans. As a nation, we are still working to recover from the largest economic downturn since the Great Depression.  Access to student loans at affordable interest rates represents an incredibly important piece of this vital recovery.
 
I often quote President Obama’s quote that he included in his State of the Union address that says we need to out-educate, out-innovate, and out-build the rest of the world.  I believe we do this best by supporting our students and investing in their future.  Unfortunately, the Student Loan Certainty Act on the floor today is a step in the wrong direction. A college education should be a path to prosperity, a path to the middle class, not a path to indebtedness.
 
As many of my colleagues have described, the bill before us today offers students and families lower student loan interest rates in the near-term but we can fully expect higher student loan interest rates in the years to come.  For families with multiple children who are college-bound, their children’s education becomes more expensive in each ensuing year.  This means that under this plan, a current freshman in college may get a decent student loan interest rate for a few years—but a current freshman in high school will end up with rates higher than the cap in current U.S. law.
 
Not only does this legislation raise long-term loan rates for students, it fails to close tax loopholes, and does not ask the wealthy to pay their fair share. And it burdens the students who can least afford it with deficit reduction.  The bill before us lacks a true vision for “out-educating the rest of the world”. It does not ask our country to invest in the future, nor does it offer a comprehensive solution to college affordability.  Rather, it offers a shabby permanent fix and slaps students and their families with the bill.
 
I would remind my colleagues that there were multiple solutions proposed before Congress slumped over the July 1st deadline that doubled the interest rates on student loans. I supported two measures offered by my colleague from Rhode Island, Senator Jack Reed, that would have paid for lower interest rates for students by closing tax loopholes for the very wealthy in our country.  The Senate twice voted on Senator Reed’s proposals and they received a majority vote each time.
 
We’re also making a good-faith effort to address the shortcomings of the bill before us—to work toward a deal that would be a true win for students and their families.  The Reed-Warren amendment, which I proudly co-sponsor, would propose a lower cap to protect student borrowers.  Why on earth would we want to expose our students to higher rates?
 
Senator Sanders’ amendment would sunset the current deal in two years and allow for a return to regular order, so that Congress can rightly deal with interest rates and a host of other issues that affect college cost.  These amendments are sound improvements to the underlying bill that would allow us to invest in students and families, rather than obfuscate the student loan and debt problem.
 
Madam President, I am disappointed that we have reached the point where debates about the future of college affordability are less about the lives of students and their families and more about protecting loopholes for corporations and the wealthy.
 
It wasn’t always this way.  In 1944, starting with the compact to returning soldiers from WWII made through the GI Bill, our nation made a commitment to future progress by investing in education.  Between 1944 and 1951, 8 million veterans received education benefits—including many former distinguished members of this body.
 
In 1958, President Dwight Eisenhower, a Republican, signed the National Defense Education Act, providing loans for college students and funds to encourage young people to enter teaching careers, the precursor to our current program for student loans.
 
President Lyndon Johnson built upon this legacy. A cornerstone of the Great Society was a path to the middle class through a college education. The Higher Education Act of 1965 gave us the Federal Student Loan Program, known today as the Stafford Loan Program, and the Educational Opportunity Grant Program, known today as the Pell Grant Program. This generation of Americans and lawmakers lived in trying times—winning a war and fulfilling the dream of the civil rights movement.  Yet they still had the foresight to make the hard choices. The choices necessary to invest in the future—our future.
 
Legislation that I supported as a Member of the House of Representatives built on this investment and lowered the subsidized Stafford Loan rate to 3.4 percent, which was the rate that students borrowed at until July 1st.  We recognized that investing in students is important and lowering rates is a part of that investment.
 
The fact is that state investment in higher education has declined significantly over past decades, which has exacerbated the problem.  Particularly as states struggle to balance their budgets in these tough economic times, their investments in students have decreased—meaning higher tuitions, fewer grants, and fewer scholarships.
 
I hear from Wisconsin students that the cost of a higher education in my state puts college out of reach for some.  Thirty years ago, undergraduate tuition at the University of Wisconsin-Madison was about a thousand dollars.  Today it’s well over $8,000.  And it’s not just my home state of Wisconsin; across the country tuition at public four-year colleges has tripled.
 
This all means that more students are borrowing through federal student loan programs to cover the higher cost of a higher education.  For students in the University of Wisconsin System, unmet need after grants and scholarships is over $9,000, nearly doubling in the last decade.  Yet the federal government limits on subsidized loans have remained relatively stagnant over the past 30 years.  In many cases, the limits on what a student can borrow through the Stafford Loan Program means their loans will not even cover the cost of their tuition.
 
This is what is all comes down to: a series of choices. Are we going to sacrifice the progress of our next generation because we are unwilling to do the hard work and make those tough choices now?  Are we going to gradually chip away at the ladders of opportunity put in place by the generations before to lift Americans into the middle class and out of poverty? Do we ask the wealthy to pay a little bit more? Do we ask corporations to pay their fair share? Or do we say to students that you are on your own, sink or swim?
 
I say to students across Wisconsin and this great county - we are all in this together. We must continue this compact from one generation to the next.
 
The veteran who was educated by the GI Bill wants to see his neighbors’ children be able to afford to attend college. The teacher who earned her education through the Pell Grant program wants the same opportunity there for her students. The mother who attended college through the Stafford Loan program does not want to see her savings for retirement depleted or her children sapped with debt.
 
I reject sacrificing the progress of the next generation because we are unwilling to do the hard work and make the hard choices now. I reject short-changing the next generation of young Americans by making college more expensive, and then using the profits from their high interest rates to pay down the deficit—particularly when we ask the wealthiest to contribute nothing.
 
If we are to win the future we must make the hard, important choices now. And for this reason, and for the hard working people of Wisconsin, I oppose this bill and I urge my colleagues to do the same.

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