Durbin Expresses Support For Biden's Student Loan Forgiveness Plan In Speech On Senate Floor
Durbin reminded his Republican colleagues, who have criticized the plan, that they have previously supported, and personally benefited from, federal loan forgiveness
WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL) delivered a speech on the Senate floor addressing the burdensome cost of higher education, which has quickly become one of the biggest worries facing middle- and low-income families in America. Durbin began his speech by recalling the inception of the National Defense Education Act, which was enacted to counter the Soviet Union’s exploration of space and their growing technology industry. As a result of the legislation, students were offered loans to attend college.
“The National Defense Education Act said that those who applied for federal college loans could borrow money and pay it back at three percent interest but not have to repay until one year out of college and then they had ten years to pay it off. I didn’t know at the time but that turned out to be my ticket to college…I ended up borrowing enough to get through college and law school. The amount of debt if I said it would draw a laugh from everyone else because it was so small,” Durbin began.
Durbin continued by citing additional restrictions that saddle students with a lifetime of debt. In his remarks, Durbin explained that federal legislation bars student borrowers from discharging their debt in bankruptcy because of an antiquated legality. Under current law, most types of debt – mortgages, credit card debt, boat loans – can be discharged in bankruptcy court except for student loans, which continues to prevent middle- and low-income Americans from living in financial security.
“When it came to student loans [in bankruptcy court], we said… we’re not going to allow [students] to discharge it in bankruptcy. It ultimately meant that for those who borrowed money to go to school and college when they were 19 or 20 years old, they would have a debt that they had to pay back or carry to the grave,” Durbin explained.
“Should [student loans] be dischargeable in bankruptcy? I think under some circumstances they should be. If ten years have passed and you still had a balance on your student loans and you were literally head over heels in debt, you ought to be able to discharge that in bankruptcy,” Durbin said.
To address this oversight in student loan forgiveness, Durbin introduced the bipartisan FRESH START Through Bankruptcy Act to restore the ability for struggling borrowers to seek a bankruptcy discharge for federal student loans after waiting a period of ten years.
Durbin went on to praise President Biden’s move to offer up to $10,000 in student loan forgiveness to Americans earning less than $125,000 annually and married couples earning less than $250,000. President Biden’s plan also offers up to an additional $10,000 to Pell Grant recipients.
“Under the plan, 43 million Americans will receive some amount of debt cancellation. A majority of them, about 27 million borrowers, will see up to $20,000 knocked off their student loan balance. For 20 million borrowers, that’s enough to totally wipe out their entire student loan balance. They can start again. They can consider going back to school, maybe even a good school that gives them the kind of training, education, and degree that really can lead to a better life,” Durbin said.
Today, two-thirds of college graduates have student loans. On average, a student graduates with nearly $25,000 in student loan debt. For students that attend predatory for-profit colleges, the burden of student debt can be far worse. Lured in by the false promises of for-profit college advertisements and recruiters, students often do not graduate from these programs but are left on the hook to pay thousands of dollars in student loans.
Durbin shared the story of Vickie Vences, one of the thousands of Illinoisans who was scammed by Westwood College, a for-profit institution. A first-generation college student, Vickie enrolled in Westwood’s criminal justice program in Chicago in 2004, believing recruiters’ promises that a Westwood degree would help her secure a well-paying job in law enforcement. Vickie, however, was unable to secure employment in law enforcement because of Westwood’s lack of accreditation.
“Because Westwood College hid the truth about the fact they were not accredited in Illinois, a lot of young people were duped into believing it was a ticket to a good law enforcement job. By the time Vickie figured out how badly she was into it, she had $50,000 in student loan debt and she didn’t even have a Westwood degree to point to,” Durbin shared.
Vickie now works at non-profit organizations that assist victims of domestic violence. However, she rarely makes enough to pay down her student loans, forcing her to live in fear of wage garnishment. The Department of Education (Department) recently announced that students who attended Westwood qualify for borrower defense group discharge due to pervasive misrepresentations and misconduct at Westwood. Vickie’s entire loan balance has been cancelled. Without this burden, Vickie can consider going back to college to help her secure a job in law enforcement.
The Biden Administration’s one-time student loan debt relief plan and the Department’s recent decision to provide borrower defense discharges for students who were scammed by for-profit schools will allow millions of borrowers to see relief. As Durbin goes on to point out, however, Republicans are quick to decry President Biden’s student loan forgiveness plan under the faulty argument that this debt forgiveness is a handout to graduates of elite schools.
“President Biden’s student loan forgiveness plan is not a giveaway to rich doctors and lawyers who racked up big debt at Ivy League schools. Ninety-eight percent of the student loan borrowers did not attend those schools. The majority of these debts are held by families who have zero net worth. What will their life be like without help? Nearly ninety percent of the relief dollars in the President’s plan go to borrowers earning less than $75,000 a year,” Durbin asserted.
Durbin reminded his Republican colleagues that several of them accepted loan payments from the government through the Paycheck Protection Program (PPP). When the federal government was offering this relief, Republicans remained quiet about the federal assistance.
Durbin concluded, “We started talking about trillion-dollar relief packages in the pandemic. We said to people that we’re going to have loans through the Small Business Administration for people who have a job or a business and need a helping hand in terms of borrowing money to get by. If you can prove that you spent the money on payroll and utilities and rent, it’s forgiven…We had a number of Members of Congress who applied for PPP loans, the same people criticizing forgiving student loan debts literally, personally borrowed money they didn’t pay back to the federal government. They didn’t think there’s anything wrong with that,” Durbin pointed out.
“The bottom line is this. If we can help these young student borrowers get an opportunity to reduce the debt that they owe and get their lives back online, that is a great outcome for them and a great one for this nation….Joe Biden’s step is a reasonable, humane step in the right direction. It should have bipartisan support,” Durbin concluded.
Video of Durbin’s floor speech is available here.
Audio of Durbin’s floor speech is available here.
Footage of Durbin’s floor speech is available here for TV Stations.
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