On the recordMay 7, 2014
I thank the Senator from Illinois. It starts with the premise right where the Senator was, and that is the Federal Government, once upon a time, lent money to our students. My colleague remembers the NDEA loans that went out at 3 percent. The Federal Government was subsidizing those loans, making it easier for students to be able to borrow. Where we have ended up today is that instead of there, we have students with outstanding student loan debt at 6 percent, at 7 percent, at 8 percent, at 9 percent, and even higher. So this isn't just to cover the cost of the loans. This is double, in some cases, what it takes, triple, in some cases, what it takes to cover the cost of the loans. That means the administrative costs, the bad debt costs--the costs of borrowing the money. So last summer, we were looking at new student loans that were coming through--the interest rates were about to double--and Congress, Democrats and Republicans, said if the interest rate doubles up to 7 percent, that is too high. So Congress said that for all new borrowers in 2013, the interest rate would be 3.86 percent on undergraduate loans, 5.41 percent on graduate loans, and 6.41 percent for PLUS loans. Make no mistake, the government still makes money--not a lot but the government still makes money on those loans.…
