Student Loan Debt

Floor Speech

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Ms. BONAMICI. Mr. Speaker, when I traveled around northwest Oregon last month, from town hall meetings to the grocery store, I spoke with Oregonians about the challenges they are facing and what keeps them up at night. Time after time, the conversation turned to the cost of higher education.

It is likely we have all spoken with parents trying to make ends meet who can't save for their young children's education and recent graduates who are worried about finding jobs that will cover their looming student loan payments. But we also hear from too many people who are trying to balance their current student loan debt with child care, housing, and other expenses. Many are getting by, but 1 month of unexpected unemployment or illness could set them back years. Unfortunately, for too many, the threat of default is already a reality.

Currently, more than 8 million student loan borrowers are in default on their educational debt, and the number is growing. These are hardworking Americans--mothers, fathers, veterans, nurses, teachers, and young people--who are trying to improve their lives, but have been pulled into financial turmoil.

The 8 million people in default--a group, roughly, twice the size of Oregon--are at risk of financial ruin. Their tax refunds and Social Security benefits may be withheld. Their wages can be garnished and they can face legal action. And with damaged credit, borrowing for a home, car, or business, or even renting an apartment can be an impossible task.

What can Congress do for those who are struggling to make their student loan payments?

The answer is SIMPLE.

Today I am pleased to introduce legislation with my friend and colleague from Pennsylvania, Congressman Ryan Costello. Our bill, the Streamlining Income-Driven Manageable Payments on Loans for Education, or SIMPLE Act, makes it easier for millions of at-risk student loan borrowers to access protections that are already available under the law.

Income-driven repayment plans allow borrowers to make loan payments that are based on how much they earn. So, in other words, what they can afford. As a result, they are much less likely than other borrowers to default on their debt. That is good for the borrower, their families, and local economies.

Unfortunately, too many at-risk borrowers don't know about these plans or they are unable to navigate the complicated application for enrolling, so they don't receive the benefit of lower payments. In fact, 70 percent of borrowers in default from the government's largest student loan program, the Direct Loan program, would have qualified for lower payments.

Even if borrowers enroll in income-driven repayment, they must complete a burdensome process to update information. In one study, more than half of the borrowers did not recertify their income on time. When this happens, a borrower's payments can spike and suddenly push the borrower toward delinquency and default.

In short, the government makes it unnecessarily difficult for people who are weighed down by student debt to get the help the law already affords them.

Our bipartisan SIMPLE Act streamlines the process and removes barriers that prevent borrowers from benefiting from income-driven repayment. The bill uses borrowers' existing income data to automatically provide at-risk borrowers on the verge of default with lower loan payments. The bill provides for automatic updates of borrowers' income information each year, so they continue to pay what they can afford.

As college costs continue to rise and more students leave school with increasing levels of debt, it is clear that this House needs to act to make higher education more affordable for everyone. The SIMPLE Act is part of that broader effort. It works by reaching at-risk borrowers, simplifying the process to get them into a plan with repayment based on income and helping them keep their payments affordable and avoid default.

I thank Mr. Costello for his partnership on this bill and urge all of my colleagues to join us in supporting this legislation.

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