SHAHEEN: WE MUST PROTECT STUDENTS, FAMILIES BY KEEPING HIGHER EDUCATION AFFORDABLE
(Washington, DC) – This afternoon Senator Jeanne Shaheen (D-NH) spoke on the Senate floor urging Congressional action to prevent a student loan rate increase from taking place next week. If Congress fails to act, the interest rate on subsidized Stafford Loans will increase from 3.4% to 6.8% on July 1st.
Senator Shaheen’s remarks, as prepared for delivery, are included below:
Last month I had the privilege to speak at the commencement ceremony at Keene State College, in Keene, New Hampshire. The students were celebrating their graduation, eager to put their education to work and find meaningful employment. Their optimism, sense of hope and enthusiasm to make a difference was palpable.
As I looked out across the audience that afternoon, I knew that a number of these students – probably up to 66 percent, according to national statistics—had borrowed money to get their degree. These students, and their families, viewed the investment in higher education as so important they were willing to take on significant loans to get that degree.
It made sense for these students, particularly since recent studies have shown that higher education is one of the key factors driving upward mobility in the United States. In fact, earlier this year, the Pew’s Economic Mobility Project showed that, even during the most recent economic downturn, a four-year college degree provided protection in the labor market for the recent college graduates.
Making college affordable for our students is essential to growing our nation’s economy, creating jobs and protecting the middle class. Over the last thirty years, tuition and fees have increased 167 percent at private four-year colleges and 257 percent at public four-year colleges. Adjusted for inflation, tuition has increased faster than costs for gasoline, health care and other consumer items. We must protect our students and we cannot price middle-class families out of a college education.
In my state of New Hampshire, the student loan debate resonates. Last year, a survey found our state had the highest average student college debt in the nation at $31,408 per student and found almost three quarters of our students have some amount of student loan debt, ranking second highest percentage of students with debt in the country.
There is no question that the high cost of student loans can be financially crippling to students. I’d like to give you a few examples from students that I have hear from in New Hampshire over recent weeks.
Julianne from Gilmanton wrote that “her education is crushing her.” She earned a master’s degree – a terminal degree in her field—and now works for a New Hampshire state agency and as an adjunct at two local colleges. To finance her education—one that people told her would guarantee a job--- Julianne took out more than $220,000 in loans. Last year alone, Julianne paid over $13,000 in student loans, and cannot buy a house or secure credit, despite thinking that she makes a respectable income. She is frustrated that she cannot fully contribute to her community until she has relief from her student loans.
Lauren Beaudin graduated from West High School in Manchester a couple of years ago and went on to get an undergraduate degree in biology. Upon graduation, she looked at her job options and after considering entry level jobs that made $25-30,000, she decided to pursue a master’s degree, hoping that the salary range would increase. She is now 22 and enrolled in a masters of biology program at Clark University in Worcester, Massachusetts. Lauren has accumulated over $100,000 in loans and is concerned that she may struggle to find a job that she desires in research or working for a bio-tech company. She writes “I am not alone. This is an entire generation of my peers in this country who did the same. We followed our dreams and earned our degrees because this is America, and you can be what you want to be, as long as you work hard. We have worked so hard. We will keep working hard. But will it be enough? What will it be like for our kids, when we are still burdened by our loans after we start families and they want to go to colleges with even higher tuition and borrowing rates?”
I recently spoke with Barbara Ruth Layne, Executive Director of Financial Aid at Granite State College. Last year alone, Barbara and her colleagues helped students access 9 million in federal loans. That represents significant help for students who are seeking advanced education. But, Barbara is quick to point out, that number does not illustrate the human cost the loans take on a student. To illustrate that point, she told me the story of a student who lives in the Northern most region of our state. The student is 35 with two young children. She struggles to make ends meet with the child support she sometimes receives, and supplements with food stamps and visits the local food pantry. Her children receive clothing from the local church. In the winter, she receives some fuel assistance, which is not enough to heat her small home and she borrows money from family to use the kerosene heater on the coldest nights. This student understands that education is her only way out and the only way to break the cycle of poverty, so she met with counselors at the college and developed an educational plan. Though she is modest in her borrowing, the debt she will graduate with is more than she has ever earned in a year. While her education will prepare her for the job market, the payoff is not immediate and she will struggle to make the payments and care for her family. In a tight monthly budget, any additional cost of education will impact this young woman and her family.
I am moved by these stories and by these students working so hard to achieve their education goals and the jobs of their dreams. They recognize that their education is an investment, and that higher education is a sure path to middle-class success and economic opportunity.
I also believe that affordable higher education is one of the best economic investments our country can make. We should be doing everything we can to make America a magnet for jobs, ensure our workers have the skills they need to compete, and help Americans get ahead.
On July 1st, the subsidized direct loan rate will increase from 3.4 percent to 6.8 percent. There are a number of proposals currently on the table, and there are negotiations underway. As we consider our options, we should be getting rid of any obstacles that keep young people from getting the education they need to succeed, not putting more in their way. It is essential for our students and for our economic prosperity as a country.
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