A picture of Senator Maria Cantwell
Maria C.
Democrat WA

About Sen. Maria
  • Making Continuing Appropriations During a Government Shutdown

    by Senator Maria Cantwell

    Posted on 2014-06-11

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    CANTWELL. 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 thank my colleague Senator Warren for sponsoring that bill and for my colleagues who did support it. I hope we will have a chance to bring up this legislation again, get bipartisan support, and get it passed.

    We can agree education is the gateway to opportunity. I was first in my family to go to college and went to school with the help of financial aid, and I know how important it is to many in the State of Washington that we help them make education more affordable.

    Student debt in this Nation quadrupled over the past 10 years, 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 past 4 years student debt has even surpassed credit card debt. So when we 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 us 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 [[Page S3579]] base education and being able to adapt--as new information comes along that changes industry--is going to be critically important.

    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. These students talked about how they were trying to invest in their own skills so they could advance in their education, and many of the stories they told were not out of the ordinary, but I think it is something we don't think about.

    In a lot of these cases, these individuals were talking about how they were trying to get an education. 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 is what happens, everybody has to upgrade their skills.

    So these students are trying to do everything. But I was truly 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 a house that goes along with it.

    He was trying to say: I am coming out of college with incredible debt and how am I going to even afford the basic things people look forward to--maybe not right after graduation but as they start their careers and 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 he pays the same amount for rent as he does for student loans every month.

    In Washington State the average student borrower owes more than $23,000 before they graduate. That is an increase of 22 percent over the last 5 years, $4,000 for the average student borrower at the University of Washington.

    So over the next weeks thousands of students in Washington State will walk across and get their diploma, but when they accept this 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, as 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 is going to affect that. In fact, during her time at the University of Washington there were points at which she worked 60 hours a week. 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, with somebody who has a 6-percent or 7-percent loan, this bill and legislation would allow them to refinance.

    With the legislation, an undergraduate with $30,000 in student loans, for example, would save almost $5,000 over the life of their loan by a refinancing of that interest rate, if it was 6.8 percent, to the current direct undergraduate interest rate of 3.86. Those are real dollars to these individuals.

    That means much needed help for 25 million borrowers across the country. It could save, on average, for all those borrowers, about $2,000 per loan. In my State it would mean relief for 451,000 students, just like the ones we spoke to last week.

    The University of Washington in the Pacific Northwest took matters into its own hands and produced a 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 1 year of student education.

    I am so proud of these students. They did their own report and got it on the front page of the Seattle Times because it spells out what we have already known, that the days when students could raise the amount of money they needed to pay for education by doing summer jobs is gone.

    The burden of debt and the amount of money owed is 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.

    Entrepreneurial activity among 20- to 34-year-olds is challenged. The Federal Reserve Bank of New York has found that for the first time people with student loan debt are less likely to buy a house than those without, so it is showing up in our economy.

    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 is going to have a ripple effect through our economy for several years.

    A recent study by the Brookings Institution found that student loan borrowers are 60 to 70 percent less likely to apply for graduate school than those without student debt. So again now we have another complexity.

    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 a computer science degree? Why aren't we figuring out a way to make that more affordable? Because in an information age economy, that is 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 are 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 would rather they commit themselves to these careers and these educations so we can have the workforce of the future.

    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 is important because we want to see policies that are going to help our economy in the short run and in the long run, but they have to be fiscally responsible.

    So I say to those critics who say: Oh, well, if we make the interest rate lower, then students are going to borrow more money, I don't think students are looking to borrow more to add to their debt.

    I don't think students whom I talked to who had loans as high as $180,000 want to borrow more money just because we are going to reduce the interest rate. They want to refinance, reduce their obligation, and get back to studying.

    There is much more we need to do to mitigate the cost of higher education. I know my colleagues and I are going to be working on that, but the Bank on Student Loans Emergency Refinancing Act was a very good step to help students and to focus them on their careers and education.

    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 college education is more affordable. It is time for us to extend the same benefits we do for businesses and mortgages to students so they can refinance and that 25 million students in America could refinance their student loans.

    I thank Senator Warren for bringing up this issue. I hope we will get back to it again.

    I yield the floor and I suggest the absence of a quorum.

    The PRESIDING OFFICER. The clerk will call the roll.

    The bill clerk proceeded to call the roll.

    Ms. CANTWELL. I ask unanimous consent that the order for the quorum call be rescinded.

    The PRESIDING OFFICER. Without objection, it is so ordered.

    Ms. CANTWELL. I ask unanimous consent that the time in quorum be equally divided between both sides.

    The PRESIDING OFFICER. Without objection, it is so ordered.

    Ms. CANTWELL. I suggest the absence of a quorum.

    The PRESIDING OFFICER. The clerk will call the roll.

    The bill clerk proceeded to call the roll.

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