up wilderness areas, decreasing harvesting rates -- we used to harvest about 12 billion board feet per year off of national forests. that has dropped down to nothing. the natural forests national forests -- the national forests are getting bigger and that is causing more catastrophic wildfires. >> thank you very much. senator wicker? >> thank you, mr. chairman. i have to say this. i have not today, or ever, in a committee hearing, insulted the integrity of witnesses on the other side of an issue. we have come perilously close to that in this committee today.

to be suggested, by my friend from rhode island, that dr. south is part of a fringe -- into me, this is the very kind of public intimidation and insulting rhetoric that professor lee gates has talked about experiencing at the university of delaware. i take exception to it.

now dr. lee gates, your signatory of the petition, are you not? >> yes sir. >> that petition says there is no scientific -- no convincing scientific evidence that carbon dioxide or other greenhouse gases are causing a real and perceivable can -- conceivable heating of the earth's climate. >> i believe there are 30 some thousand people that sign the petition. >> 30 some thousand people? would you describe them? >> many of them are scientists, phd's in other disciplines. people connected with climate change and doing research in the areas. >> i have to say, i appreciate someone standing up and challenging the conventional wisdom. martin luther did that. martin luther king did that. i appreciate people that are willing to hold up their hand and say, i have some data here. i would like to suggest is a contrary position.

>> i wouldn't put myself in that category. >> it is important issue. i admire you for standing up, and dr. south also. saying, you have a right to be heard. a right to be listened to. a right not to be insulted by the being called part of a lunatic fringe. you have concluded that droughts in the u.s. are more frequent and intense during colder periods, is that correct? >> that is what the data indicates. when we look at droughts over the last 2000 years, they tend to be more intense and frequent when the temperatures have become colder. >> dr. south, you have offered a couple of bets to your fellow scientists over time. is that correct? looks yes, sir. >> five years ago, you offered to bet on an ice free arctic in the summer of 2013.

when a bbc journalist wrote a 2007 article. several ice experts declined to bet with you, is that correct? >> that is correct. >> they would have lost that bet, is that credit? >> that is correct. >> you are currently offering a bet on sea level rise. will you tell the committee about that? >> i am looking for someone who would be willing to bet $1000 on the sea level increase for the year 2024 in charleston, south carolina. the rate currently is about 3.15 millimeters. i don't know how they do that to the hundreds of a millimeter.

you can do it mathematically. i will bet that the rate 10 years from now is not over seven millimeters. seven millimeters would -- if a seven millimeter rate starts now and goes to 2100, it would equal about a two foot increase. many people are talking about a 14 millimeter -- being equivalent to a war foot increase. i am essentially betting that for the next 10 years, it will not be increasing at a rate that would equal a two foot increase by 2100. but i will not be living that long. i can't win that bet. >> the disc that apply to your

heirs -- would that that apply to your heirs? >> yes, it would. >> thank you very much. we have had a good hearing. there are people watching this -- and there will be people late at night watching this suffering from insomnia. perhaps someone will take dr. south up on his bet. >> thank you to all of our witnesses. i appreciate you bringing your expertise. we have heard today that climate change is having impacts on the ground right now. it is not an abstract theory. it is not about models, decades, or multiple decades into the future. changes on the ground right now are real and measurable. they are affecting americans'

livelihoods in farming and fishing and four street. these are real jobs and a real impact on this generation. we have heard about bark beetle infestations. migrations of fish. the impact on intensifying wildfires. the impact of magnified droughts. more acidic oceans in the pacific. their impact on oyster reproduction. i have to wonder about, if baby oysters are having troubles forming a shell, how many other shellfish impacts are there that are going to be problematic for the food chain in our oceans and our fisheries? these things are real at this moment. they confront us with evidence that must not be ignored. certainly, this is in the

context of debate at this moment about specific measures that we might take to limit carbon dioxide. including that from coal-fired power plants. the cost of ignoring climate change will continue to increase. the costs are real and tangible. they will affected jobs. they affect our rural resources. i appreciate the testimony before this committee today. members of the committee will have two weeks from today to submit additional written questions to the witnesses. i would ask that if you receive such questions, you will respond. we will make sure the answers are circulated. with that, the meeting is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> bergdahl. the headline he says he was tortured by taliban captors.

he is being treated at an american facility in germany. he says he was eaten and hounds in a cage after he tried to escape. the telethon said he was held under "good conditions." it is one of the talks on the sunday talk shows today. on therry commented detainees that were released from guantanamo bay in exchange for his return. he appeared on cnn's state of the union. i am not telling you they do not have some ability to go back and get involved here at the also have the ability to get killed doing that. not think anybody should doubt the capacity of the united states of america to protect americans. no one should doubt the capacity of america to protect americans. he has always said he will do what ever's necessary to protect the united states of america. these guys pick the fight with us in the future.

we have proven what we are capable of doing with al qaeda. >> this is starting at 1:00 p.m. eastern. more on the u.s. taliban prisoner exchange wednesday during a hearing on capitol hill. chuck hagel will testify along with anti-gun general counsel house preston before the armed services committee. we will hide that at the clock a.m. eastern here on c-span3. you can share your comments via twitter. the senate budget committee held a hearing last week on student loan debt examining the effects of student loans on borrowers, career choices. we will be taking your calls and comments immediately after.

>> this hearing will come to order. i want to think senator johnson who is filling in today forced senator sessions. welcome to our colleagues who are joining us today as well as a roomful. welcome to the really important topic. we're going to be talking about a challenge that 40 million feet will face today. for many americans that want to further their education and build their skills.

a bill that is coming to the floor very soon that will allow our worst to refinance their school loans and is a part of that fair shot agenda. we will be discussing that a little more later. i want to thank our witnesses who are here that will help shed mountingts that student that compose for borrowers and our economy. we will be hearing from the student loan man for the consumer financial bureau. to welcome britney jones today. she's a recent graduate and former president of the student virginia education association. we will also be hearing from a distinguished professor of economics at ohio university. a college degree is a worthwhile investment. for many it can be a ticket to the middle class. we know that on average college graduates earn more and they

tended to have lower unemployment rates than their less educated peers in a highly educated workforce is also good for our country. class,ngthens our middle he workforce will need to compete in the 21st century. many people have to turn to student loans to help finance their education. for a few minutes you'll hear from britney jones. she will be talking about how taking this out made it possible for her to get a college degree. i look forward to hearing more about your experiences. you have started a teaching career in paying down the student loan that got you through college. alone.not

dealing with overbearing student debt has become a reality for a growing number of americans. the statistics are staggering. the average college graduate will have to pay back around $30,000 in student loans. a record number of young households posted at that. americans who took out loans found it difficult to save and a qoa well eared a recent study showed that college graduates without student debt had accumulated seven times more wealth than those who are paying back school loans. christian student debt is not just hurting far worse. there is mounting evidence that it is holding back our economy. historically they have been

starting their own careers. today many are finding it difficult to save for a down payment on a home in the high monthly bills can disqualify many people from even getting a mortgage. when first-time homebuyers are not able to get a mortgage, it it can affect the housing industry as a whole. that is why groups like the national association of homebuilders have expressed concern about the overbearing financial weight of student loans. this can stifle entrepreneurship. young people are not able to take the risk. paying off student loans can prevent young people from saving for retirement or making the kinds of purchases that help further our economic recovery. i know these economic consequences are what you and others have called the domino effect. i am looking forward to hearing

board details about those negative economic impacts. to adjust his as a starting point we need to ensure that student loan servicers that handle building a track borrower payments are treating them fairly and responsibly. there have been alarming reports the student loan servicers committing borrowers. they have not properly processed payments. there have been complaints that they have put borrowers into default if a cosigner dies despite the borrower being current on their loan payment. i was troubled to hear reports that sallie mae was overcharging moseley members on their student loans. sallie mae has agreed to pay nearly a hundred million dollars in fines after charging them higher interest rates. i have asked arnie duncan to investigate to make sure other companies are not doing the same.

we can do more to help borrowers. the refinancing act is a bill from senator elizabeth warren but i have cosponsored. borrowers toow refinance their federal student debt. will letmate this borrowers save $4000. it would put more money and borrowers pocket so they can make ends meet, make down payments on homes or start new businesses and help grow our economy. right now people can refinance their home. or their business loan. this bill will let borrowers student loan certainty act. it allows new borrowers to take advantage of lower interest rates established by the free market.

their skills are better able to afford college and manage their student debt. it is an economic imperative. to strengthen our middle class, workforce, and economic growth congress needs to address the challenges. >> it will occur in student loan debt currently. i refinance professor in -- i

have a finance professor in college who spend a day talking about personal finance. he said the reason they call the debt instrument a bond is because when you go into. you put yourself into bondage and you want to avoid that. i took that to heart. i have the advantage of growing and going to college in the 70's when college was cheaper. i worked full-time. read upon leaving college with close to $30,000 in debt, and left college with $7,000 in the bank. i wish that were more possible. would like to start with a chart i have repaired. i've been using this in my powerpoint presentations. and laying out some facts food for thought. what this shows is that in 1963, the total cost of a four-year undergraduate degree in a public college was about $929 per year. that is room, board, intuition.

actual cost has risen to $4600 which was 27% rate ofhan just the inflation. you can see as a 2012, the cost ratellege outstripped the of inflation by 2.5 times. rather than costing 7000, when $17,474.llege is about times the rate of inflation. the question i have asking is why? what is so different about what colleges and universities spend their money on that their cost would outstrip the rate of inflation by two .5%? two of the components of a room , andoard, food and shelter the rest of the economy those have actually grown at a lower rate than inflation.

let's face it. was we spend in college about $2 trillion since 1963. it is all well-intentioned. it has a very serious negative unintended consequence. dewey make it less accessible because we have made it so much more unaffordable? just to have a little more detail. of the $2 trillion we have spent 200 that timeframe, about billion dollars was spent between 1963 in 1988. $1.8 trillion was spent as college costs really skyrocket. i will leave this for the reader to judge. i think he will talk a little bit about that as well.

you are correct. 2011 thehame in average student loan debt after four years of college is $25,000. , aboute 57% of students 29,500. statistic isesting how long it is taking our students to graduate. about half graduate pretty much in the four-year timeframe. they graduate within 52 months. about 4.3 years. the other half raises the average time to graduate to 6.3 years. just as he we question, why is that, particularly when you have so may suit is leaving college with credits in the -- high school with credits in the bag. have we made fun to so readily that people can dither in college? just a question i'm asking. i know part of this hearing is to talk about other types of

legislation to solve the problem. one thing i think is important for us to talk about is how those proposals might be scored. having is constrained by to score these under the reform act. it is not acoring account for economic conditions or loan default. itis showing that this saves would also cause the government $88 billion over the 10 year frame. ares important if we looking for peaceful legislation that we take a look at the fair value cost and the effect it has on the deficit. the only other thing i want to

talk about is another unintended consequences some of these problems designed to give loans. into07, congress passed law the college cost reduction and access act of 2007. it established a new loan program but discharges in the remaining debt after 10 years of full time employment in the public service. the borrower must have made 120 payments as far as the direct loan program in order to pay. they have to keep you there. they cannot be in default will there working for the public sector. thata wrote a column said law schools on opportunity. statementsd monthly are lower so the schools to cover graduates payment entirely for the first 10 years. the money for law school repayment programs usually comes out of tuition mostly paid with federal student loans. do you understand what i'm saying?

they law school is gaming the system. they are saying all we have to do is we will make the loan payments for our graduate students for 10 years and at that point the american taxpayer will pay for our law degrees. at berkeley, it is part of the fee that all they agree students pay. three to 50 borrowers are taking advantage of this program. at berkeley there are 263. ae average student debt of law graduate is $150,000. at berkeley it is when under $15,000. -- 115,000. the university chicago is also doing that. until recently, georgetown had on its website basically talking about how schools combined with the federal plan "means public interest borrowers might not pay a single penny on their loans !"er

all these aid packages are well-intentioned programs. i think we have to honestly take a look at the reality of the situation in the very serious unintended consequences of our good intentions. collectively enticed our children to take in school debt. thank you. we are to turn to our witnesses. and keep her coming and sharing your personal experiences. we're going to start with you. morning. i thank you for inviting me here today. my story starts as a second grade student when the decision was made. i would declare to the world

that i would become a second grade teacher. i pursue this plan throughout my studies. teacher, followed by receiving my bachelor's degree i pursued our elementary education. it was in high school that the begin this. they talked about scholarships and financial aid awards. i assumed everyone could attend college. it was not until i was except as that i would we offered that i feared i could not attend. i made thersations, decision to enroll with the assistance of student loans and become a teacher. the cost of attendance constantly increased while the grant funds decrease. upon graduation, the joy of completing the first portion of my program was overshadowed by the truth that i have borrowed

well over $70,000 in student loans from various sources. federal subsidized, unsubsidized, perp and, and -- and personal. was facing the difficult decision of whether to continue my education and public my dream of becoming a teacher or seeking immediate employment. one student bar the maximum to fill thenable gap in his cost of attendance. he later withdrew and never returned. another student who serves as our treasurer also left school for financial reasons. job in sales and was offered the position of store manager. ofed with the decision occurring more student loan debt, it was no longer the passion would follow.

when confronted to the decision to borrow another 20 grand to complete my program, i decided it was best to postpone attendance. admittedly after commencement, i drove to an interview for a preschool teaching job, got it and begin teaching the following tuesday. i was excited to have a position despite the low wage of $10 an hour because unlike many of my colleagues, i was working in my desired fields. i was the lead teacher in my own classroom. i was elated until the loan statements started to come. because i owed approximately $60,000 at the time and i was working full-time, it had to start paying them back here at this route problematic. they figured i would be able to afford paying $600 a month. i was making $10 an hour and paying over $9,000 in rent and insurance and other expenses. my parents were able to help with some of the payments to keep the loan in good standing.

this continued for a few more months until i lost my job. notice thateceived i had defaulted on the remainder of my loans totaling $58,000. a nicer gentleman called and requested the date by which i could send the $58,000 check or money order. he said hegh or two would be happy to set up a paymentd plan. he put in the calculations and determined i would be able to pay 653 a month. i was working as a prekindergarten tendacher making 13.50. the numbers do not add up. i worked as many as three jobs at once just to make my monthly payment. two years later i was finally created to apply for financial aid and return to school to pursue my masters. the ordeal i went there with my student loans made this a weary one. alternativeor

programs began. i didn't not want to collect any more student debt. classroom to become a teacher, not a teacher with more loan debt then she can take. his name is i need them for residency program. through this program out become a masters degree. be fees associated will repaid upon the completion of the program. it includes four years teaching in denver public schools. this is promising. it is an exciting time in my life and almost $80,000 still await repayment. student loan debt has been the driving force of my decisions for the last eight years of my life. according to my current plan is suggested to be for the next 25 years of my life, well into the years for which i should be planning a retirement. it should not be this way. sureave the power to make that it is it this way any longer. you can take action to help make college more affordable so that

students have a fair shot at pursuing their dreams. t, should be our collective goal. i asked that you increase student aid especially those who need the most financial help your i urge you to help make student loans more affordable including by allowing refinancing of the loans as legislation from senator warner would do. i ask you to look for ways to make careers in public service like teaching more attainable by expanding loan forgiveness programs. for the opportunity to share my story today. >> thank you for coming and sharing that with us. members of the committee, thank you for the opportunity to testify today about the potential impact of student debt. are contributing to large increases in student debt owed by americans who have already graduated.

in addition to considering how to make college affordable for future students, we cannot ignore the impact of the $1.2 trillion already owed by more than 40 million americans. there has been growing consensus that today's 1.2 trillion dollars can have repercussions that threaten the broader economy. the treasury secretary remarked that student debt is hampering our economy across multiple sectors of society. the federal reserve identified student debt as a rest to aggregate household spending. executives in the banking industry have cautioned that the condition of the student loan market "is now having a significantly negative impact on students, the economy, and taxpayers. 49% of americans cited student loan debt as a huge obstacle to homeownership. the national association of home builders said aiken apparently

ability for them to qualify for a mortgage. it may not only delay household formation but also other large purchases. america's largest automaker has fact the overhang as a key her, explaining the low level of car purchases by young people here student debt can hamper entrepreneurship. find aitary research negative correlation between changes in student loan debt information of certain small businesses. longer-termhave a effect on future retirement security. forg workers to save early requirement can generate significant retirement assets over the course of their careers. did it debt may be stopping workers from evening contributing at all. the same can be said about the impact on later market outcomes. they noted that high debt burdens can impact the career positions,new

leading some to abandon primary care altogether. it can impact the availability of other professions critical to the livelihoods of those in rural communities. are graduating with debt averaging over 115 thousand dollars per borrower, making it make endsy you can meet. the list goes on and on. there are several areas that .arrant attention first is servicing. as the financial crisis and rivals -- and rivals, many state and proper foreclosures due to the stakes from their servicer. i am concerned that this may be interesting to our growing student loan problems talking 7 million americans in default over $100 billion in balances. , theyonth after referrals ordered sallie mae to pay $100

million for violating multiple laws including illegal treatment of service members was student loans. markets, these are few and far between. when mortgage borrowers see broader interest rates plummet, their own incomes rise in the credit profiles improve. they try to refinance. responsible student loan bars rarely have these options. ,he market transparency regulators miss some of the important linkages by which problems in mortgages would rebound or the financial system. currently financial regulators lack fundamental information on student loan origination and performance. the quincy and default in the student loan market are not well understood and we must work to close the transparency gap. in conclusion,

we must ask ourselves how do we preserve the drive to succeed theso many who feel that dream is just now out of reach, ignoring the warning signs may prove to hold back not only the future of growth and dynamism in our economy but our entrepreneurial spirit. may provethese dividends for many years to come. i look forward to your questions. you.ank i wish to make three points. worse, the current student loan debt prices would never have at thed had college cost general rate of inflation. the primary cause of the student is increased university fees.

e must deal with the root cause of this, namely runaway college cost inflation. there are many reasons for this university price inflation, several which i mentioned in my written statement. one that is relevant here is rising tuition fees are federaly given by assistance programs themselves. significant successful solution to the problem of rising college costs will work only if you radically change the nature and magnitude of federal finance. a tippingor near point where fundamental change will come to higher education. these are starting to happen. proposals do not fundamentally addressed the broader problems and would likely worsen rather than

improve the situation. the increaseks at in tuition fees for various theaters over the last 75. the first half tuition fees to write about 1% more than the overall inflation rate. 1978, adjusted tuition growth has tripled to well over 3% a year. it were what it had been tuition levels, today would be only 60% lower. i'll look for your tuition levels will be in the 3000 to $5,000 range is a 7000 to $12,000. a is a bigger bargain for

simple of indiana to send their child to purdue university today than at the end of the great depression. board charges for outdistanced food and housing inflation rates. solve the tuition fee problem and you will dramatically reduce the debt loan prices. there are many explanations. themost relevant here is explosion of growth in federal student financial aid. this has contributed to rising tuition fees. there will be no harm in it solution to the dutch permanent solution to the debt crisis without reining in federal programs. there are many ways to downsize these programs to make them more progress of which liberal democrat should like it also smaller and cheaper with republicans should like. have failedgrams miserably at providing greater access for lower income americans. the proportion of recent college

graduates coming from the lowest file is smaller than it was in 1970 before pell grants or student loan problems. rising income inequality has been associated with more financial aid assistance. i do not think that is coincidental. severaloncerns about administration initiatives including the college rating system. they are lowering interest rate. i think this is a bad idea for several reasons. beginning with the fact that it does nothing to address college tuition inflation. conscientious payers of debt obligations and of getting punished relative to non-payers who get lower interest rates. it will also add tens of

billions of dollars to the deficit and national debt. there are other objections as well. over and breast-feeding in higher education. decline.starting to we need to reduce our aid program, probably doing away with tax credits and loans and constraining others. there are no painless solutions. we are doing more, lowering interest rates. it will probably enhance, not reduce, income inequality.

be very strict with allowing five minutes to beat senator. we will be calling on people in order of arrival. with that, i wanted to start with ms. jones. thank you for sharing your story and being here to testify. all of my sisters and i went to college with hell grants or student loans to finance our education. i taught young children early on which got me into politics to begin with. of financial burden financial debt is considerably more than when i graduated. i share your understanding and appreciate your being here. in your testimony, you said you paid over $600,000 a month to cover your federal student loans. how much was your monthly take-home pay? time it was roughly 1500. >> do you have any money saved? >> i do not. i'd been using it to pay back

the loans i have taken out for my undergraduate degree. ran into difficulty repaying all of your loans, did your service or offer any alternative repayment plan like the income-based repayment option? >> they did not. i do not learned that until very recently. i believe have i been offered that program my payment would 50 a month asghly 1 opposed to $600 a month. >> if you have been able to take advantage of that it would reduce the payment to put $50. do you know how much you would save if you have been allowed to refinance your student loans? >> over 10 years, i would've been able to save more than $4000. >> how would that have impacted your life? >> as educators, we always have to buy materials for the classroom. funding is limited. i think having the extra funding available would make life easier. i would be able to save for the future in a be able to plan for

retirement as opposed to wondering if it would be possible. that you to speculate would be in a much better place today. nobody told you. thank you for being here as well. he worked directly with a lot of student loan borrowers. he talked about some of the macroeconomic consequences. you have encountered a lot of stories. one at the top issues they have identified is difficulties repaying, restructuring, and rolling, and loan modification programs and staying current to avoiding delinquency. >> our services are not reaching out and helping young people or even adult learning what their options are today. >> we learned a very painful years around the financial crisis in the mortgage servicing market. there is some fundamental

misalignment where what may be good for the loan owner or the investor and what may be good for the borrower is not actually the outcome. market forces can often cause terrible outcomes for everybody. >> i have heard from a lot of people today he were paying back loans that they do not know how much of the old. they're having trouble getting that information. they do not get your the statements. britney is nodding her head. is that something you hear a lot? >> it is not actually just not knowing about it. it is also we hear from many borrowers and we see it in the data that a number of borrowers are reaching out and are seeking help with their often told to choose forbearance. we have continued to hear complaints from service members military families that are simply told just do what military forbearance.

that option will keep interest accruing. it'll make the debt burden harder but it is easy to accomplish rather than walking them through the steps to enroll in their eagle entitled benefits. gett is hard for them to good information personally about what they should be doing. ok. >> i have about 50 seconds left. families of the larger implications for our economy. and our discussions with the banking industry, there is general concern about increasing debt to income ratios. while the advantages of going to college on the differential between college graduates and non-graduate is growing, most of that is growing because non-college graduate wages are slipping. it college graduate wages are so much higher but generally flat when controlling for inflation, the debt, which is growing even

faster than tuition cost, that means less ability to create new credit whether it be for mortgages or to use those funds for other productive purposes. >> thank you. thank you for coming to testify. do any high school or college counselor ever go through the calculation of checking on student loan debt and how you would be able to repay based on your profession? not.ey did we started the conversations, they simply let us know that you can apply for millions of dollars in scholarships and grants. you just have to apply for them. you can talk to your financial aid counselor about the other options for paying for college. >> did you ever touch a financial aid counselor? about the ability to repay? >> not in the initial stages. you were just saying th had this much of a balance and he can pay with loans and you

can take them if you want or borrow from your family. >> do you wish you would have had a finance professor talk about this? she could go back in time, would you do the same thing? would you try to figure out a different solution? college experience, a degree was absolutely necessary. the option to not get a degree was not available. i would do it. michael is to become a teacher. >> have you ever heard of the college of the ozarks? college and university set up for all the students work . it is set up so nobody incurs debt. does that, a good idea for you? it is a great investment. investment, the loans ought to match its a you can handle those when you get done. >> it should. i think being able to refinance the loans we have will be a great benefit for students like

me. the loans made it possible. there was no other funding available to go to school. we have to have our degrees to teach. you do not want an unqualified teacher in the room. i do not see myself doing anything else. whatever it takes to get to a question, that is what i will do. we need to look at what we can do to make it possible for everybody to get the degree they want. >> god bless you for being willing to teach our kids. said the student that is hampering our economy and entrepreneurship. shifting this debt to a select few to all of our kids and grandkids help entrepreneurship? we would be shifting it from those that incurred the debt to all of our kids and grandkids. we are arctic and the deficits and we cannot afford it. debt and they in

deficit and we cannot afford it. when broader interest rate environment change, it is common not only for homeowners but also for the corporate sector as well as the government to be able to match their debt to something that potentially reflects better their own credit profile. >> let me interrupt. are you supporter of the the act of 2007 that basically forgives student loan debt after 10 years of working in the public sector? are you in favor of that? >> we do not know the results of that. nobody has actually received forgiveness from that program. >> forgiveness will come on the backs of american taxpayers. correct? decision.s congress' >> are you supportive? how does that not hamper our

economy if we shift the deb debt burden from a select few to all of the kids and grandkids? debte distribution of the burden will come in multiple different sectors. i think the marginal propensity to consumed for young people a prime ages of home ages and purchases of durable goods, this is something that is of great worry to the financial s ector. >> there would be a lower propensity because the debt burden. theyou disturbed about political and wall street journal stories, about how the law school graduate schools are gaining that program? does that concern you? >> as we saw in the run-up to the financial crisis, it the essence of -- the incentive misalignment between those who their alignment

with investors or others can lead to very disastrous consequences. i do not know the specifics of the schools you mentioned. aligning incentives between schools, financial service providers and others is critical to ensure that market outcomes are efficient. >> thank you. >> thank you very much. one of the noteworthy thing about student loans, and they s tand out from virtually all somebodyt, is that wrangled a provision into the bankruptcy reform act years ago, a somebody who has left no fingerprints on the amendment. i think it was stuck in

conference. nobody takes credit for it. it snuck in and became the law of the land. tt provides that studen loan deck is not dischargeable in bankruptcy. think of status provided for in the constitution. it is one of the elemental -- bankruptcy is provided for in the constitution. it is one of the elemental parts of the constitution. yet the ability to fail and do it again. virtually every type of debt is dischargeable except student loan debt. is there an economic justification for bankruptcy debt being treated differently than any kind of debt? nature ofore in the an unexpected blessing to the then largely violently held student loan industry? >> pursuant to a report that was

required by congress to publish, data related to student loan originations, particularly private student loans throughout the past 15 years or so. the 2005 change in the bankruptcy code, one would anticipate an ordinary marketplace that prices would come down as bankruptcy codes become more strict. in fact, we saw that prices actually went up and this suggests that broader capital may beconditions, ma larger than teachers to pricing the markets and it suggests that the bankruptcy code is operating way as itdifferent compares to other consumer financial product markets. we had representatives from the private student loan

industry come in and testify that it would be wrong to unwind alth provision that was not in the dark into this provision, because it would upset the settled expectations which loan industry, congress is the whole of irony. it is ironic that an industry that step this in the midnight upsetting every settled expectation of borrowers as to how their loans will be treated. they now try to defend themselves why the rule of settled expectations. i do not believe there is any rational distinction between student loan debt and any other kind of debt. thank you for your testimony. witness been a turkic

that has brought a real dose of reality to this hearing -- a real terrific witness that has brought a real dose of reality to this hearing. how has your student loan debt affected other personal decisions in your life like to own a home, to have a family? how has that burden of debt changed what you might do with your life? >> i had this conversation with my mother a lot. 15 times whataybe it is that i'm pursuing the education field. borrowed against her own retirement so that i could become the teacher and want to be. stick withn to education was driven because of the desired to want to see the future generations have the same chances we have. i will say these decisions to take out more student loans made

going back to school a hard decision. using more justify of my mom's retirement even just to pay for it. >> what has it done to your likelihood of owning a home? >> considering i have no funds for a down payment, that has been put off for a few years. hopefully in the future i can work something out so i can start saving again. >> thank you. i want to thank the chair. i wanted to just ask him do we have an estimate by the administration yet as to how many student loan borrowers would actually take up the potential option to refinance their pre-july 2013 student loans? do we have a sense of what numbers we are talking about? do we have an estimate about

what that will cost? important so we understand the challenges we are facing as a nation as we look at this piece of legislation. do we know what those numbers are? >> it is an independent agency, not part of the administration. i do not have that type of analysis available. what i can say is that we do know from our experience in various mortgage financing programs that the economic impact of individual mortgage refinancing according to a study by the department of housing and urban development led to approximately $25,000 of economic impact for homeowner that was able to refinance. a mortgage is a much larger loan. then again, a younger person to have a higher likelihood

be in prime age for certain purposes. i cannot speak to that. ati am just trying to get the basics. how much more are we going to add to the debt? how much more is this going to cost? we asked this question about every piece of legislation. it is basic information. perhaps with your background, let's if 100% of borrowers to refinance their july 1, 2013 loans or a large percentage, what kind of impact -- to we have any numbers we can think about here? donehave not personally any estimation, but the math suggests the numbers could be very large will stop we have 40

million borrowers, not all of them prior to 2013, but most of them. you have close to 40 million are worth darling on average 25,000 or $30,000, you are talking about over a trillion dollars. let's say for the heck of it that you lowered interest rates two percentage points on a trillion dollars and that's $20 billion. per year. that is real money. it's probably less than that. i have seen one estimate of the deficit effect measuring in the tens of billions of dollars over a long time. consequentiala amount of money. >> i think it's an important piece of information that we would have. the issueask about raised because i think it's a very important issue. it's an issue i hear from parents and students -- we are

going to get to a point where if the rate of increase of what it costs to get a college education keeps going up, no matter what we invest, if we are thinking we are going to be able to help the dead erdman of someone like ms. up higher,t is going then i don't know. it may not be going up higher than health care, but this is a big issue. issue we get that that and if we are going with our investment, how do we get to for thesentability institutions to have to be market-based, think animatedly, and deliver quality education at a more reasonable price? issue this is a big that's going to hit us no matter what we do here. >> i completely agree. the rising college costs is an american tragedy and we should do everything we can to make

sure those people who are going to college this fall, the class of 2018, the class of 2019, that they do not incur a lot of debt. ignore the class of 2008 and 2009 who graduated almost by no fault of their own when they started as freshmen in 2004. they could not imagine they would graduate into a financial crisis. that's something we had to on in both ends. she appreciates that, but we are going to look back on all of because it's1 2013 a large amount of individuals. you answered that question for the record? do to helpof what we students get a good education,

i'd like to know what your thoughts are and how we hold these institutions more accountable. >> we have a lot of senators coming, so i will have them answer for the record. senator baldwin? >> thank you. i appreciate both of you for hosting this hearing on such a critical issue. staggeringare nationally with $1.2 trillion in student that. i look at the statistics for my home state of wisconsin. areof the students graduating with an average of $28,000 and that. these numbers starkly demonstrate that there is a student loan debt crisis facing our nation. wisconsin individuals with a

bachelor degree report making payments of about $350. graduate or professional degrees are making average monthly payments on their student loan of $448. that is an average figure. the ranks of student loan debt obligations is nearly 19 years for persons with bachelors degrees and 22 years for persons with professionals agrees. as we have heard through your testimony and the question so these statistics are underscored by millions of personal stories and and notes visions affect personal as i have heard testimonies and roundtables. people literally deciding whether and when to start a family because of the impact of this debt and the career decisions ms. jones's talking

about. there are a lot of folks getting a higher education because they want to teach or they want to do public service or work for a nonprofit. debt constrains their career choices. we are little testimony and .iscussion on that you get out of college and start a business and put that off. who you get out of college and do yourent, do you buy, move back on with your parents? are people facing most choices in their late 20's and early 30's. do you buy a used car or used car? all of those have ripple effects throughout our entire economy. it have been talking about and sharing your own story and

so many have stepped forward to do that. this is a crisis would need to confront. i have in my very limited time to questions i wanted to pose our current law on student aid. i've heard from a number of students who have had to hold him part-time work, sometimes almost full-time work while are hit all stop they with something known as the work penalty because their incomes may exceed the protection federale part of the financial aid under the higher education act. i am working on legislation that deals with this work penalty that would raise the income protection allowance. i wonder if you can speak to the

importance on the availability of financial aid. question manner as number of people returned after being displaced from the labor force in the great recession and took on part-time jobs and that's something we would be happy to discuss with you further. >> i certainly know that has been a reality in my home state and many of the factories that there was not a supply of jobs without significant retraining. the other thing i wanted to follow-up on is the work you've done regarding servicers. anything from simply failing to provide quality customer service to ignoring some of the legal obligations around notice and payment offices and fees to

certain officers. ine heard from people wisconsin about getting quality information and the frustration and additional costs that come along with simply trying to pay back what they owe. a constituent from march field talk about loan she took out for her daughter's education and believe she had finished paying it off years ago only to find out of the blue there were claims that she still owed money . i wonder if you can speak to how strong a requirement for student the onesicers like that could give students valuable information. >> we learned a valuable lesson from the breakdowns in the mortgage servicing markets. have learned as financial regulators from the past 10 years another very important lesson.

in 2004, the student loan marketing association was as atized and operated private company for 10 years and has since restructured but despite the significant public benefits and subsidies that the corporation received, it was sally mae was ordered to stop breaking multiple laws. they continued to break those laws. >> i have to move on. we have a number of senators waiting to be called on. if we could get an answer in writing, i would really appreciate it. -- i wantrner, i know to thank senator warner and senator kaine for helping us get a witness from virginia today and i know you both have questions. several senators and votes will be called shortly. with any members want to go vote and come back, we will keep

going as the boat is called. >> thank you very much. of the statistics i found very interesting was in comparison to germany, your college costs 4.3% of the country's median income. here, it is 51%. thedoes that affect aspirations of students and those two nations? >> the lack of affordability of college may not only impact the alsonts themselves, but it might impact a broader family balance sheet. as we saw, the rise in student becauset was not only college was increasing in costs, but students themselves are bearing a larger share of total college costs compared to their parents or other sources.

that means because people have less home equity, they have less savings adult with unemployment themselves will stop those costs got shifted to students, so it may impact the student and the family aspirations themselves about how they will prosper economically. >> does this reflect the philosophical issue over whether it benefits the individual children the strengthens society as a whole? >> i'm not a philosopher, but i the positivet at externalities of a more educated us.lation benefit all of there is some empirical literature to suggest that but at the same time, we need to make sure people are completing and able to repay their student debt and it doesn't displace other productive spending. >> let me put it another way.

if colleagues of ms. jones are looking at the challenges of debt and deciding i cannot pursue a path where i have the equal to thef that millstone pulling me down because of the consequences and struggle, that not only impacts the individual but doesn't it impact the future prosperity of our entire society if folks in do not reachation the fullest of their potential and contribution back to the economy? >> behind all the facts and statistics is a broader question is the american tradition of entrepreneurialism and risk-taking. people feel they cannot take those risks and cannot start at small business out of the garage and cannot start a family and that something we should think about will stop >> let's think about how this

amplifies the inequality of wealth will stop the students try to purchase a home and adding homeownership is the of personal family wealth for working americans, doesn't that amplify the inequality of the society? gap ine is a large certain simulations of graduates who do have student debt and those who don't in terms of what those final outcomes might be for their retirement balances. traditionally, younger workers have been able to stash cash away for the home down payment or saving for retirement. they lose as compounding debt, some student of the repercussions to say the long-term debt could be real.

to make thatted point. the thing i most concerned about is the impact on aspirations. i live in a working-class community and children did the same high school and what i'm hearing is a feeling among high school students that there is not a path in which they have an opportunity to thrive and pursue their potential which then affects the behaviors and high school as far as how hard they are going to work to make that path possible. this is the heart of the american dream and there's a full opportunity to thrive for every american, whether they are a child of the mechanic, the child of a janitor, or the child of a ceo. given the huge hurdle of college debt, is that compromising their

vision? >> the change in aspirations from the stories we are constantly submitting to the public record illustrate many of the themes. >> i have to interrupt because we have both occurring right now and we will let you answer that for the record. the senators next to be king,ized -- stepped out, warner, white and. i'm going to go vote and come back. i suggest anyone on that list go with me and come back. >> thank you very much for hosting us critically. thank you for sticking with it and doing what is right to work hard and, like most of us to mull and i was in school, we did not have the capacity to turn to our school and say can i borrow $20,000?

memost people are not of situation where they have other options will stop i assume from what you are saying come you would be in the situation i was will stop fortunately for me in the 70's, we did more on scholarships. i would not have gone to college. my little 93 person graduating class in michigan, my dad was sick and i didn't have a lot of money and i qualified for a tuition free scholarship and that got me to college. we don't have those anymore. unfortunately, the state of michigan is one of the highest at cutting higher education over 32% of the funding. college is interestingly have not increased tuition by that same 32%.

we are seeing them take significant cuts. what i find interesting is the for-profit universities have increased their tuition twice as much as a book universities. of the for-profit school grads are coming out with 30,000 more. 57%. there are a lot of things involved which we need to be think wet, but i don't should say in the meantime students should not have the same opportunity that all the rest of us have who want to finance the house. i do also want to save we are asking questions, the good news for this refinancing bill unlike

other things congress has done over the years, the bank bailout and all kinds of other things, this is paid for. that's the good news. we are proposing to ask everyone pay their fair share and create a fair shot for everybody. say, have to turn to you and say i am so very surprised at your testimony. it seems that you are saying we should reduce the federal role and we have too many graduates in our economy. that michigan you out ofd there would be the one point 5 million jobs expected to be created in michigan alone in the next six thes, one million of

million and a half will take education beyond high school. when i look ma say there are 600,000 jobs available right now, not all of those are full-year. we look at the need on stem, science, technology and engineering and math and where we are going as a economy, i am haved that you think we too many graduates going into our economy. i wonder if you might speak about that. >> certainly. if you look at the bureau of labor statistics data of people working with college degrees in the united states today, nearly half of them are in jobs that the bls has characterized as

jobs that do not require four-year degrees. that statistic has to be taken with a little grain of salt. i'm the first to admit there are judgment calls, but the unemployment rate among college graduates just right out of college last year was above the overall u.s. unemployment rate. which i thinkory, is a compelling story, is a story of someone who has worked hard, but she's making $10 an hour or $13 an hour. this goes back to senator wyden's great bill that wants to bring more information to the theset before they make wrong decisions. time, but i out of

don't know who's running the let me now all stop >> just say in conclusion that i don't hear anywhere from any business or anybody that we need less education for folks. andk you again mrs. jones we will do everything we can to give you a fair shot to unload this kosow you can actually buy a house. >> thank you thomas senator wyden. as a richmond resident like you, i appreciate your testimony. to passwant it unnoticed. student loan debt has been the driving force of my decisions for last eight years of my life. according to my current repayment plan, it is projected to be for the next 25 years of my life well into the years for which i have been planning for retirement. that's a powerful statement. i would like to be a student in your class because someone who wants to be a teacher as much as

you do, someone who has been willing to take on your shoulders that much debt and still fight to achieve your dream, someone willing to move halfway across the country to know youter street, i are and are going to be one fantastic teacher, so i thank you for your commitment. i want to focus on the cost side of this equation. higherg down the cost of education, i support so many of the issues on loans, but i'm focused on these cost issues. we have probably done a disservice to students and families by not laying out in a more clear matter lower-cost to get skills or degrees to find a way to succeed. one kind of skill you can get is not a college degree but a licensed professional. the georgetown workforce center says seven percent of young with license or

certificates are more than those with bachelor's degrees. it's not that you don't get education of high school, but sometimes the right education is a welding society certificate will stop a cisco systems administrator assistant. i don't think we coach and counsel our young people that there are ways to get the credentials that able you to work that out the same as degrees. military tuition assistance benefits. for0 year to active duty college or community college. you cannot use them to pay for a exam. more and more states are embracing the notion that students while they're in high school should be able to get dual enrollment credits. you cannot use pell grant credits, you cannot use a current pell grant program to pay for college credits you can

obtain for a really cheap cost in high school with dual enrollment. to graduate from college in three years because of dual enrollment and it was enormous lee helpful to my family. they had to tell me when everyone was celebrating their colleges that you are going to have to talk your way into some place late. everyone that except you is too expensive. ap credits are a way to reduce college costs. two plus two programs -- a lot of students know -- this was not happening so much for me but a lot of students now are going to j sergeant reynolds and then going to tcu. their total cost then shrinks but to do that, someone has had to sit down and counsel them about this at a path. you could get the same degree and it would be 30% cheaper

about the community college. what this tells me is i'm concerned about that but i'm probably most concerned about this college cost issue. i think there are already a number of pathways to get college degrees or the certificates that will enable them to work. but we have an obligation to provide better information and we have an obligation to provide policies that do not discourage or treat a second-class education some of the things like professional certificates. ask in terms of the information provision, i know you have concerns about the grading system and i do too because i think they can obscure more than they reveal, but in terms of inviting students and parents with information earlier in their lives so they can make decisions, what more can we do at the federal level?

>> one of the things we have noted is that it's also very whatcult to even compute the true cost of college is for many families. tuitions change from year to year, but it's a challenge to project what your monthly payment will be when you take on a certain amount of debt this year. just like we saw in the mortgage market where conditions change, people are really rolling the dice. there are number of tools to assist with this but there can be more that can be done. >> our chair has come back and >> thankg for all stop you. very good testimony. thanks to all three of you.

it seems one of the things we have talked about and send you talked about this in the answers to your questions from senator murray is their questions about the income-based payment that have a low uptake rate will stop isn't one of the things we should do about interest rates or refinancing to make more information available to borrowers at the beginning and the end of their schooling so they know what these options are? that would have helped you dramatically, apparently. >> it evidently would have helped to know what i was getting into. beginning, you were told this is what you need to get through college and you can deal with after but you won't be doing it on your subsidized loans.

won't be talking about it when she take your exit exam, but what i realize is even and not knowing, we are losing potentially great teachers. they're walking away because they can't afford the education they need. >> there may be options they have a don't even know they would have that would help them stay in the profession. andworked in this field their something like seven different repayment options. about streamlining those and making more information available. isn't that one thing we ought to do? >> the simplicity of how to repay your loan is a very important goal. i recently heard , am a former employee student loan servicer, and they are evaluated harshly on how quickly they can get someone off

the phone. that can lead to very quick interactions or being transferred, and you might get the shortcut answer rather than the answer that is ultimately bore the borrower and maybe even the economy more broadly if it avoids default. addressing those incentives as a major concern. i enjoyed your testimony and i will share with you a story you can use next time. and a former life, i was a talkshow host and i interviewed a financial aid officer of one of our colleges in maine and we talked about college tuitions and he said for the past 40 years, the cost of a good private college has been the same of it -- the same as a new ford. in the 40's, it was a thousand dollars and it went upn