Menendez Calls For Fairness To Stop Student Loan Rates From Doubling

Menendez Calls For Fairness To Stop Student Loan Rates From Doubling

Washington - Today, U.S. Senator Robert Menendez (D-NJ) took to the Senate floor to underscore the impact of Senate Republicans' obstruction of a bill to stop interest rates on student loans from doubling. If Republicans continue to block the measure, current interest rates on federally-subsidized Stafford Loans will double from 3.4% to 6.8%. The hike would saddle nearly 144,000 New Jersey students who depend on Stafford Loans with approximately $114,752,478 in additional interest payments on loans issued after July 1st. This hike comes at a time when student debt has reached nearly $1 trillion-exceeding credit cards and auto loans. Menendez supports a bill that would prevent a interest rate hike on these loans by closing a corporate tax loophole. Republicans have called for gutting the Prevention and Public Health Fund, which provides funding for critical health programs and investments, instead.

Menendez told the stories of several New Jersey students who will be hurt by the increase.

Click Here for video of Senator Menendez's remarks on the Senate floor.

Full Text of Remarks As Prepared for Delivery

Mr. President, I cannot believe that we have to come to the floor of the United States Senate, at a time of economic hardship and recovery for millions of families... a time when jobs are scarce, the need for a skilled workforce is critical, and student loans are about to double... only to have those on the other side turn this into yet another filibuster, another capitulation to those on the far right of their Party... those who are so far right that -- when they look back along the political spectrum - can see only the small image of their hero, Ronald Reagan, fading in the distance. They have gone so far to the right that they can no longer see any heroes, not even their own. And so here we are, Mr. President, with our side once again debating the obvious... and the other side defending the indefensible position of the far right.

We are looking for common sense, reason, and fairness. We are, that is, looking to govern fairly for all. They are looking to play politics that benefit a few. We are asking to stop interest rates on student loans from doubling for 7 million Americans by closing a gaping-tax-loophole that those who have benefited most from this economy can drive an S-Corporation through. And my Republican friends on the other side are once again saying "NO". They are once again attempting to govern from the extreme... once again demanding that even closing an obvious tax loophole that benefits the wealthiest is an unacceptable government intrusion, but that ending preventive care for those who are struggling with rising health costs is the best option. Can they be serious! Can we be standing in this chamber saying that the most reasonable option to prevent student loans from doubling is not common sense tax reform, but ending breast cancer screening for millions of women? Is that the view from the far right of the political spectrum?

I ask my colleagues on the other side, do you really believe that's a fair option?

Have we run through all other possible options to have reached a point where we can now say: "the only arrow left in the quiver is to end preventive care as we know it?" Have we already ended all outrageous tax loopholes for the wealthy? Have we already ended subsidies to Big Oil, ended the Bush Tax Cuts for the top one percent, and now have no other option than to end preventive health care for women... for millions of Americans whose health depends on it. Unfortunately, it seems that our Republican friends have once again put partisanship and politics first. Their budget prioritized tax breaks for the wealthy over keeping college costs down for middle class families. Only when they realized that this wouldn't play well politically, did they reverse course and drop their objections, but only under certain conditions.

Rather than close a special interest loophole that only a small minority of wealthy businesses can exploit, they would rather cut funding for children's vaccines, mammograms, and other critical services. This is the classic case of giving with one hand and taking with another. And all without asking the wealthiest Americans -- those who have reaped the most rewards and benefited the most in society - to help the country at this critical time.

M. President, if that doesn't tell you about the priorities of each party, I don't know what will. These preventive health services not only improve people's health and their lives, they also reduce the costs of healthcare. That's because it's a lot easier and less costly to treat illnesses when they are first detected. When women have access to affordable mammograms, their doctors will be far more likely to catch breast cancer in its early stages when it is most treatable and least expensive to cure. When we give a child a simple, inexpensive measles vaccine, we don't have to worry about expensive treatment for measles. When we help people quit smoking, we dramatically reduce the costs of treating that individual.

The saying, "an ounce of prevention is worth a pound of cure", could not be more appropriate.

For a party that loves to preach about fiscal responsibility, it boggles my mind that they would fight to cut preventive care that will reduce healthcare costs. But Republicans decided to make a target of these programs, not because of substantive issues, but just because - plain and simple -- they were included in the President's healthcare bill. And, as we know, as the distinguished Minority Leader said, it's all about defeating the President.

They lost the healthcare debate in 2010 and have spent every day since trying to refight the battle.

Now Republicans will try to scare people into thinking that closing this corporate tax loophole will kill small businesses.

But, actually, according to Citizens for Tax Justice, "closing this loophole will actually help most small businesses, which are currently subsidizing the minority who abuse it to avoid payroll taxes."Let's be clear. The vast majority of small businesses pay their fair share into Medicare...

...but this loophole, affectionately dubbed the Edwards/Gingrich loophole, has allowed certain professionals like former Senator John Edwards and former Speaker Newt Gingrich to avoid paying millions of dollars into the Medicare program. Technically, they weren't wrong to take advantage of this loophole, we were wrong to allow it. But enough about the details on how we pay for it, this debate is really all about people, all about families struggling to pay for college.

As the first person from my family to go to college, who had to rely on federal grants and loans to pay tuition, I have a first-hand appreciation of the importance of giving all students the opportunity to pursue their dreams. For students struggling to pay for college and racking up debt, this is not an academic argument. The extra $1,000 they would have to pay each year is not theoretical money. It's the difference between being able to repay their loans and entering the workforce with good credit - versus being overwhelmed by debt and going into default.

Recently, I had the pleasure of speaking with students from Montclair State University in New Jersey about how this interest rate hike would affect them. I heard from Emily Delgado, a first-generation American and the first person from her family to go to college. She just completed her freshman year at Montclair. Despite working for the college as a student mentor, Emily will still be saddled with approximately $20,000 in debt by the time she graduates. She told me she can't even bring herself to calculate how much the interest rate hike will cost her, because in her words "it will just crush my dreams".

Nick Weber works three part-time jobs to help pay for college. Despite these three jobs, Nick only makes around $175 per week, which is about how much extra he'd have to pay in interest every month if we don't act now. He doesn't think that's fair and neither do I.

A student by the name of Jamie Sommer -- who dreams of one day becoming a professor -- works part-time for the school, but her income hardly puts a dent in her debt - and she fears she won't be able to afford graduate school... won't ever realize her dream.

Emily, Nick, Jamie, and all the other students who are struggling to pay for college deserve their dreams... and it falls to us, all of us in this Chamber, to do all we can to keep those dreams alive. These students deserve our support. They deserve the common sense of a community that understands that we have to reduce the deficit, but that we cannot balance the budget on the backs of the next generation, we cannot cash in their dreams and let those with the most cash-out.

We need a fair solution, not political dogma. These students have worked hard. They deserve better. They're not asking for a hand-out. They studied hard in high school, got good grades, took out loans and got jobs to pay for college. They're working toward a better life, doing what every parent dreams of their children -- to do well, built a decent life for themselves and their family, and give something back to their community and to the economy. They epitomize everything we want our young people to be... And all they're asking in return is fairness... not a political-slight-of-hand that helps them with their student loans, but, in the process, takes away their health care. All they are asking is for us to not make it harder on them... for us to not add yet another stressor to their lives. And certainly it is our obligation to not shut down their dreams of a higher education, for it is in their dreams for a better life that the economic future of this nation will be built. We owe them every chance to achieve their dreams and help make this another American century. Isn't that the least we can do? With that, Mr. President, I yield the floor.


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