Student Debt

Floor Speech

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Ms. BALDWIN. Mr. President, I rise today to speak about a growing crisis in our Nation that threatens our economy and the future strength of our country. A college education should be a path to the middle class, not a path to indebtedness. But today America carries the burden of $1.2 trillion in student loan debt.

In my home State of Wisconsin almost 70 percent of the students graduating from 4-year institutions will have student loan debt, and the average debt amount will be $28,000. This is real money. This is real money that isn't going into growing our economy at a time when we desperately need economic growth. This is real money that isn't going towards buying a student's or graduate's first car or first home.

The total amount of student debt in the United States has tripled in the last decade, from $363 billion in the year 2005 to over $1 trillion today. At the same time Federal financial support for students has not kept up with the need. The Pell Grant once covered $7 out of every $10. Today it covers $3 out of every $10 in college costs. In addition many States have scaled back their investments in higher education. 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 tuition, fewer grants, and fewer scholarships.

I heard from Wisconsin students that the cost of a higher education in my State puts college out of reach for too many. Thirty years ago undergraduate tuition at the University of Wisconsin-Madison campus was about $1,000. Today it is well over $8,000, and it is not just in my home State of Wisconsin. Across the country tuition at public 4-year colleges has tripled. This all means that more students are borrowing through Federal student loan programs to cover the high 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 those same 30 years.

In many cases the limit on what a student can borrow through the Stafford Loan Program means their loans will not even cover the cost of tuition, let alone other significant college expenses. The promise of a higher education has instead become a burden that has fallen squarely on the shoulders of students and their families.

Today, reflecting the trend of shifting costs onto students, 44 percent of college operating expenses are paid through tuition. Nationwide, 49 States, including my home State of Wisconsin, are spending less on higher education than they did before the great recession. Wisconsin has seen a 20-percent decline in State spending on higher education since 2008 while instate tuition has increased by almost 6 percent over the same time period.

It has not always been this way, and we seem to have lost touch with the American idea of building a path to the middle class by making a strong investment in higher education and giving Americans a fair shot at upward mobility.

In 1944, starting with the compact to returning soldiers from World War II 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. Yet they still had the foresight to make the hard choices, the choices necessary to invest in the future--our future.

Throughout our Nation's history, the Federal Government has made major investments in expanding access to higher education for all people willing to work hard to pursue their dreams. Unfortunately, in recent years we have neglected that proud legacy.

Recently, Congress lowered interest rates for new borrowers but not for those borrowers who are stuck paying back old loans with much higher interest rates, be they public or private. Further, for those who are in true financial distress, Congress has made discharging loans in bankruptcy nearly impossible, first by eliminating this option for Federal loans in 1995 and then for private loans as well in 2005.

Tonight we are giving a voice to the debt crisis that faces millions of American families and students. Tonight we are giving voice to a number of solutions that can address this crisis if we work across party lines.

I believe Congress must take action, and that is why I am proud to join my fellow freshman colleague Senator Warren as a cosponsor in support of the Bank on Students Emergency Loan Refinancing Act. This legislation would allow those with outstanding student loan debt to refinance their debt at the lower rates currently offered to new borrowers. It is simple. It is paid for by making millionaires and billionaires pay their fair share in taxes to give our students a fair shot at a bright future, and it will help strengthen the economic security of American families who are struggling with this debt.

I believe making college affordable is one of the most important steps we can take toward rebuilding our middle class and breathing new life into the American dream. I want to live in an America where everyone has a fair shot at getting ahead.

I yield the floor.

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