Transcripts For CSPAN Key Capitol Hill Hearings 20140604

Institutions subcommittee will get underway with a hearing that will look at the impact of high student Loan Interest rates and debt and the impact on the economy. Among those testifying today, the Financial Aid director a washington dc teacher will testify and others as well. At the subcommittees chairman will introduce legislation that would allow individuals without Student Loans to refinance at a lower Interest Rate being offered to new borrowers. This comes as fox business reports the numbers are startling. 1. 11 trillion in Student Loans outstanding. Of two toulon hearings we are covering today on the cspan network. The Senate Budget Committee Debt and you can call that getting underway right about now online at cspan. Org. Thank you all for joining us. One decade ago, we begin to see the warning signs of problems in the housing market. A few years later, we watched accommodation of wall street greed and attentive regulators inattentive regulators helping to destroy our economy. This crisis, the topic of today todays hearing. Here we are again third outstanding student debt is 1. 2 trillion. More than credit card debt, auto loans. Roughly 7 million borrowers are in default on a student loan with these borrowers lose, our economy loses. A 13, the Consumer Financial Protection Bureau released a report describing the impact of heavy student loan burdens. Joined them in describing how celebs can interrupt the slowly recovering economy. Excessive student debt can defer or destroy the dreams of prospective firsttime homebuyers. And limit the options of young graduates who might work as teachers or doctors in underserved areas. Defaults will have longterm impacts on a recovery. Its critical we ensure that student loan servicers do their jobs properly to protect individual borrowers and our economy as a whole. Last year, i wrote a letter to some of the largest banks and Student Loans companies asking about their efforts to modify loans for borrowers in trouble. Measuring their success and then rolling forwards and affordable incomebased plans. The numbers were dismal. No bank has enrolled more than of borrowers were in trouble. Im concerned that student loan servicers care more about maximizing profits than giving proper customer service. Thatf the questions considers the retirement system set up to make borrowers fail. Our servicers our servicers ensuring that you understand their full range of rePayment Options . Many of the loan rePayment Options are better suited for contract lawyers and recent graduates. We dont give graduates the tools to succeed, we can expect them to have a fair shot at building a successful life. How can borrowers understand the rePayment Options best suited to their specific needs when only legalways that experts can understand . I propose a student loan option within the cfp be. Within the cfpb. That office has issued reports describing trouble and practices. A borrowers payments in order to maximize fees. Facing challenges activating the relative benefits on the relative benefits on their Student Loans. All borrowers facing options obstacles and rolling in the modification programs. Come at fdicrrals founded the nations largest servicer broker in a series of laws. Its been ordered to pay fines and compensation of more than 90 million. It revealed it wash also under investigation. Cfp be reports have recommended that Congress Examine some of the reforms to the credit card and Mortgage Servicing markets such as ones related to Payment Processing and servicing transfers third in order to approve the student Loan Servicing market. To help address some of these problems would harm borrowers and our economy, i sponsored a number of reforms such as the student loan bar were bill of rights will will provide protections and require workable alternative rePayment Options for private loan borrowers were at risk of default. Notify lenders to borrowers about incomebased repayment plans for federal loans and protect our words from penalties due to errors on the part of the servicer. We know the privacy loans generally have significantly higher Interest Rates, offer omitted Payment Options and no relief for the many graduates who dont make the amount of money that they expected or have been laid off or even unable to find work. Actefinance education addresses this problem by addressing treasury to make the private student loan work more efficient. Loan market more efficient. I look forward to our witness views on student Loan Servicing practices. Let me introduce the four witnesses. We have both at 11 00. We have the votes at 11 00. I asked people to stay within the time is much as they can. Director of the programming granville, ohio. A Grassroots Organization that works to improve the federal direct loan program. For years working at financial offices. She has dedicated her crew to helping students afford a secondary education. Serves as Vice President of external affairs for student veterans of america. Considerable experience advocating on behalf of veterans. He joined the marine corps at. Ge 17 and i robert has some students with him here today. He served as a grade level leader and cofaculty o advisor for the gay straight alliance. Lindsey burke is the education policy chair at the heritage foundation. She has done Extensive Research around the governments role in education. Ms. Hoover, if you would begin. Thank you. And members ofwn the subcommittee, thank you for inviting me to testify today. My name is nancy hoover and im the director of Financial Aid at Denison University in granville, ohio. Liberal artstive college with an enrollment of approximately 2200 students. I have been the director of Financial Aid at denison since 1994. In administered the limitation of a direct loan program in year two of the program. Denisons endowment allows us to award annually Financial Aid from our universities funds to 97 of our student body. An average of 47 of our graduates are a federal loans and 4 borrow private loans. The key motive federal overtedness was a little 21,000. The William D Ford direct loan Program Turns 20 years old this here. The delivery process has continued to be efficient, reliable and easy for school s to administer. The direct loan program was first implemented, all of the loans were serviced by a single contractor. A all correspondence to bar words was identified as the william d federal direct loan program and the logo for the department of education made the servicing contractor for these loans invisible to the students. The department had to expand the number of services to accommodate the increased volume of Loan Servicing required for the purchase of federally backed loans in 2008 and the transition of all schools to the federal direct lending program. The department issued new deal vicing contractors contracts of agencies who had experienced servicing Student Loans in the program and allowed but do not require these new services to cobrand with the department logo. Since the servicers logo appears larger than the partners logo, borrowers are confused as to why they are receiving written or electronic correspondence from an unknown agency. Services report a large percentage of unopened emails from the borrowers because they believe the correspondent is junk mail or spam. The inherent flaw with the carnival full servicer environment is that borrowers do not understand it was servicing their loans and or are at a greater risk of defaulting. Currently, there are 15 contractors servicing federally held loans. The current federal Loan Servicing environment needs to be simplified by a mandate that contractors invisible agents of the federal government with identical processes and policies and the number of contractors with limited be limited. The bipartisan budget act of 2013 a limited special treatment for nonprofit student loan servicers. When the department of education had the opportunity to renew the servicer contract, it should consult with all of the stakeholders and student Loan Servicing and open the contract bidding process to other entities and financial sectors outside the previous environment. Our worst need their point of contact for all repayment activities to be a single portal one phoner number number. An efficient and robust portal at which students can execute every required process for their federal loans except to initiate the repayment process. Student loans. Gov can be expanded so students can begin the repayment process of their federal loans instead of going to a specific service or website. I would like to thank you and other members of the committee for your support of the bank on students emergency Loan Refinancing act. Borrowerss assistant with loans and will service or as to refinance all of their loans to have a single servicer. Required servicers to notify delinquent borrowers about incomebased options. However, with all of the good , it is extremely confusing for students to understand the intricacies of all the current rePayment Options. I encourage congress to reduce the current number of payment plans to two. Standard and incomebased from which students can choose. Repayment should be collected through payroll withholding. Many borrowers are unaware of service their service has been changed until they encounter a problem. Many borrowers have filed complaints to correct errors related to the servicing contracts. Do loan servicers need to provide notice to bar words about a change in their service like the Mortgage Services are required to do. Think you again for the opportunity to provide a Financial Aid administrative perspective on student Loan Servicing and im happy to respond to any questions you might have. Thank you. Mr. Hubbard. Thank you for inviting student veterans of america to cement our testimony on student Loan Servicing. It is our privilege to share this on the ground perspective with you today. Graduate across the country, we believe that the student debt burden will ultimately be one of the largest inhibiting factors to their longterm success. Part, stemsment from a lack of access to information that individual and institutional levels. Veterans consistently fight the following challenges. Difficulty obtaining Accurate Information about loans, convoluted pathways to gathering information and that limiting programs and unnecessary roadblocks in place by servicers. Despite avid efforts to increase protections against abuse practices, Getting Service members the right information about the protections at the right time remains a challenge. Service members and veterans have access to protections under these Service Member Service Release ask. This does not function cohesively and programs often function independent of each other. We have seen that many Service Members enter the military with Student Loan Debt. This existing debt is also a major source of the overall debt. Existing debt is particularly harmful to a Service Member or veteran when servicers do not comply with protections afforded by sacrum. Misconceptionmon that parents should go to school on the g. I. Bill and have a free ticket. You know this is simply not true. As an earned benefit, not only is the g. I. Bill not free, it may not always cover the cost of a full education. This is especially true for those attending private institutions or for those considered outofstate residents. To prevent situations that may violate a Service Member or veterans right, we believe that institutions need to have access to a full range of financial data. For data is necessary institutions to be able to effectively counsel their students about their Financial Futures. Haveiduals should also access to this data to achieve the highest level of consumer awareness. Currently, there is no widely used system that would allow any individual with education debt to see all of their loans in a centralized place. Tool. Could be such a the meteor program has the unique function of providing all itvate lender data in which simply requires the approval of the department of education to access direct loan data. This has yet to happen. While we might not know the full effect of student debt for this generation of veterans, we are beginning to see the first and second affects today. They are significantly less likely to build their own business, save for a home or save for their retirement. The effect of these issues will impact the economy for years to come. And will continue to distort economic behavior if not taken seriously. In light of the issues we have identified, we have recommended various solutions. Of the solutions we have cemented to the record, we would like to highlight one in particular. Program coronation. Many programs exist to support the repayment of Student Loans, though very few of these programs are coordinated. Ifajor opportunity exists current programs record and streamlined to function seamlessly. Putting these pieces together would be an important step forward. In the g. I. Bill becomes an even clearer asset to our economy. When this veterans are empowered with the right tools. I reducing the debt burden on servicemembers and veterans, we can set them up for longterm success. Andhink the chairman Ranking Member and the subcommittee members for your time, attention and devotion to the cause of veterans and i are education. As always, we welcome your feedback and questions and we look forward to continuing our and with this subcommittee the congress to ensure the success of all generations on of veterans. Thank you. Mr. Chairman and the distinct members of this committee, my name is robert and im a social studies teacher at Woodrow Wilson high school here in washington. I come to you as a member of the American Federation of teachers and the washington teachers union. I want to thank chairman brown for the opportunity to testify. Mikes appearances with student debt and loan repayment. I hope that sharing my experiences in the Financial Aid process makes it easier for students and their families to pay for Higher Education. Island and a rhode family of teachers come i always felt like i could make a world make the world a better place by helping kids. I graduated from Rhode Island College with a bachelors degree , having double majored in secondary education in history. While i was fortunate that my parents were able to cover my college tuition, i still had to pay for books and other expenses during my undergraduate years. I started my teaching career with some credit card debt. At the urging of my professors come i sought to teach in an urban area and that is how i ended up here in washington. Fully to admit, i was not prepared for the high cost of living in washington on a starting teacher salary. After several years of teach ing, i knew i needed to further develop my skills. Going for my masters degree would take my energy from a students and their work. I was accepted into one of the most respected teaching programs , Teachers College at columbia university. As able to earn a masters degree in social studies education over three considered summers. The program was the right professional choice for me. Attend thisorder to highly regard program, i had to take out several loans despite my fulltime salary on top of tuition fees, account for two apartments as i cannot contractually sublet my apartment in d. C. I had to pay for travel to new york, books and other typical living expenses. I like to point out that, while affordability is often on tuition, it was really those other expenses that drove up my borrowing. After three summers come i graduated with my masters degree an 37,000 of debt. I received some grant money during my program and subsidized loans over 25,000 for three years. An additional 11,000 in unsubsidized loans. I have been puzzled by several issues. I listen to switch providers twice and it has never been quite clear to me why the transfers were made. Amount has been debited for my Checking Account for my Monthly Payment when those loans were trevor the were transferred last time. When i set up an online account for milos come i found that the information about my loan included payoff options and pay updates was available. The information was never provided to me on my paper statements. Career. Ud of my 12 year my Financial Life has been put on hold because of the loans i have taken to stay in the classroom. Milos have a current Interest Rate of over 6 and i will pay over 10,000 in interest on top of the principal. It is hard to see how i can save to buy a home with this debt burden. Although i deftly could secure a mortgage at an Interest Rate of about 4 . I have a car loan that is at 1. 9 Interest Rate. Yet, theres nothing i can do to lower my student Loan Interest rate. With more and more students being forced to take on debt, believe we must make it easier for them by having access to grants and lower Interest Rate loans. I made a decision to get an advanced degree to be able to further my career and benefit the students im committed to serving. After about two years of payments, i am likely eligible for two programs that are lower my Monthly Payments and shorten the life of my love. I believe Many College Students would be more likely to pursue if these programs were streamlined and better understood. I suggest congress find a way to reach out rapidly to teachers about these options. Because the process was so convoluted for me, i worry about what would happen to my students. Many of whom are graduating as a testify today. I begin this whole process. Many will be the first generation and their families to attend college. Others have worked hard and have been admitted to the nations top colleges and universities but will be unable to attend because of cost. Im afraid some of my students dont understand the ways high Interest Rates will multiply their debt. I dont want them to be faced with the same lack of transparency and confusion. I hope that congress can find a way to ease the burden on students and families and make attending college affordable. I fear a generation will be to settle two saddled with debt to invest in housing, businesses or make career choices based on anything other than burden potential. I look forward to responding to questions. Thank you. Ms. Burke. Thank you. I am a fellow and education a fellow in education policy at the heritage foundation. For many, earning a College Degree is the way to climb the ladder. Is associatedona with higher earnings. College graduates earn 650,000 more over the course of a 40 year career. While a College Degree is not the only route of upward itility, for many, represents the most promising path for achieving their fullerenes potential. The value of earning a College Degree is demonstrable. The cost of earning a degree has become prohibitively expensive for many. Average tuition at fouryear Public Institutions for outofstate students reached when the 2000 22,000 this year. Many students leave with a bachelors degree in hand, but burdened with tens of thousands of dollars in Student Loan Debt. Many students leave College Without graduating, burdened with debt and lacking the paper credentials they hoped would put them on the path toward middleclass stability or better. Wellintentioned federal policies have failed to drag down college costs. Federal student aid has enabled students to take outsized bulls to loans with little credit check or consideration for their future earnings potential. Some have even argued that such policies have enabled universities to raise tuition. Federal Higher Education subsidies have increased since densely over the past decade. Now represents 71 of all student aid. According to the College Board, the College Board notes that over the past 10 years, the number of students borrowing through federal Student Loans increased by 69 from 5. 9 Million Students write during 2002. 60 of students who earned a bouncers degree of school more than 26,000 in debt. Total team and live Student Loan Debt now exceeds print trillion dollars 1 trillion. Increases in debt have been driven by increases in college cost. In the last 30 years come inflationadjusted fees increased by 153 . Increase greater than the increase in the cost of health care. Tuition and fees suggests that growth in federal subsidies have done little to mitigate the college cost problem. In order to make college more affordable, federal policy should do three things. Stop the spending spree, employee care accounting to understand the true cost and the couple federal financing from accreditation. If history is any guide, continuing to increase idle subsidies will fail to drive college cost. The 33 billion Pell Grant Program provided grants to 9 million College Deans making it the largest share of federal education budget. Congress grew the program by expanding eligibility and funding, resulting in a doubling of the number of pell recipients since 2008. In order to control Higher Education spending, pell Grant Funding should be targeted to the lowincome students the grants were originally intended to help. As the federal government finances federal Student Loans, it should use fair value Accounting Practices to get inaccurate measure of what those programs are costing taxpayers to ensure the loans. A report released last month, cbo calculated that the four largest Student Loan Programs will cost taxpayers money. A negative subsidy for the federal government. While the report states that the four loan programs will yield the savings of 135 billion dollars from 20152024, cbo calculates that using fair value accounting measures, the poor loans would have a net cost of 88 over the next 10 years. Largest Student Loan Programs represent an 80 billion taxpayer financed subsidy. The government is exposed to market risk when the economy is weak because our worst default on their debt obligations more frequently and recoveries from arewords are lower bar borrowers are lower. Any loan program should use a nonsubsidizing Interest Rate at which the rate for the program breaks even. Specifically, the department of education should be required to use fair value accounting estimates calculated by cbo and adjust loan rates accordingly going forward. This of help determine whether the programs are costing money for taxpayers and where to set Interest Rates to ensure the programs breakeven. Finally, if federal policymakers want to drive down college cost and increase access to higher , the single most important reform that can be made is to decouple federal financing from accreditation. Continuing to simply increase federal subsidies will fail to solve the college cost problem. Such subsidies shift the responsibility of paying for college from the student who directly benefits from attending college to the taxpayer. Transferring the burden of student Loan Financing from University Graduate who will earn significantly more over the to theof a lifetime three quarters of taxpayers who do not hold bachelors degrees. Stop theers should federal spending spree and employee fair value Accounting Practices and ultimately work to decouple federal financing from accreditation. Thank you. Thank you. My apologies to ms. Burke. There was a call i had to take. I know of your story and i appreciate that. I will start with you, ms. Hoover. Your testimony and others on the that Financial Futures of students depend on fair responsible servicing practices. Students are not able to choose who will serve as their student loan. Lenders. Selected by talk about that structure. You dont consider that the right structure. Explore with us the better way to do this and an analysis of the structure. The wait is now and the better way to do that. If you would explain your thoughts that way. Servicers andthe contractors volume of loan is assigned to the servicers based on metrics. There are three metrics that are based on satisfaction. School satisfaction, Customer Satisfaction and satisfaction fsa. Ss the percentage of loan defaults. Those are metrics for each of the servicers to get their volume of loans. The loans are assigned to the servicers the student does ert know to whom the servic their loan has been service. They have done a good job of trying not to have mixed borrowers. They are trying to have all of the loans there are some students who have loans that are still not sold to the department. There are still cases where students have more than one service or. What im suggesting is that these servicers are contractors they can Still Service the federal loans him up but they need to be invisible to the students. As soonent calls as they understand its a federal loan, to go to student loan stuff got to do everything. Hey do their counseling they should just continue the trajectory of being able to start the repayment of their federal loans. When they go there, if they have an inquiry, there is Technology Today that would transfer that call to the contractors. The contractors can still be the servicers. They need to be invisible to the students because students are getting emails from the various servicers and they do not understand who these agencies are. They think its spam mail or junk and they are ignoring it. How could your experience after going to get your degree have been better . Based on the structure and the way you were treated. I believe the best way would be more information about how much interest i would pay. I was not quite sure about the process, even though i went through interviews, exit interviews i was not sure what the total debt would look like at the time. I wish i actually had a of mysation with someone servicers. Yesterday was the first time i actually met had a telephone conversation. Definitely more in person conversations or interviews. You represent a group of people who have had some significant legal issues. If a servicer violates their federal contracts, should there be consequences and what should they be . Thank you for the question. This is a critical question. Many bad, there are actors out there. Some are very obvious. Others are more under the table. Recent sallie mae case was a good example of a clear signal for the industry that these issues will not be accepted. They will not be tolerated. 50 million being paid out as a sign that if you are going to take advantage of the system, you are going to abuse Service Members, it will not be tolerated. Compliance is a critical step in that process. Ensuring that Service Members are treated with the protection they are afforded under sacrum. Bp ms. Hoover, the cf the says to loan servicers might consider private providing notices so the consumer can notice the transition to ensure there are no servicing interruptions. Many consumers were unaware of the servicing change until problems arose. Withabout your views servers prior to and following transfers of the cost to borrowers. Thatwill have to say experiences i have had with my students have been limited in my students because have been in the direct loan program and have only had one contractor. I have not had students telling me of significant issues with their servicing of their loans. That is because of my student body. I do believe that the complaints have been registered with the Consumer Bureau. As we monitor as our students begin to be more into this ,ultiple servers or environment i shall be listening to it very carefully. So far, i have not heard that from my actual students. Anybody else want to comment on that . This brings up a very important point. A level of opaqueness in the system. When youre a student and you have different loans, you might know where those loans are. If you go to log on to find out what those loans are and how much you even know, that can be a challenge to figure out sometimes. Having an agricreated view of this load it would be important. Thisank you for holding hearing. We should be doing everything we can to help student loan borrowers repay their loans. Part of that is improving Loan Servicing. If we want to make sure people can repay their Student Loan Debt, shouldnt we start by doing what we can to reduce the size of their debt loads . The federal government is 8 lecting loans at 6 and and 9 and 10 and even higher. What i would like to do is i would like to ask a question about whether or not you could talk about the impact on people if we refinanced their Student Loans down to lower rates. I thought you might start that. Thank you, senator. It would be a wonderful opportunity to have the ability to refinance my Student Loans. 30s, i likeo my to begin a family and buy a home. I would like to be able to have that opportunity. Youyou talked about said you have a Home Mortgage at what Interest Rate . You had a car loan . A car loan at 1. 9 . Many car loans are offered at 0 . We want to be careful about that. Read closely. It would make sense to me that maybe there are more options available to refinance a lower rate. Mr. Hubbard, could you speak a little bit about what the impacts would be on peoples lives if we brought down the Interest Rate on Student Loans . Huge problem right now. If you look at individuals who go into the service of existing debt to begin with and then they are in the service and they have deployments, they have lots of protections and they are taken advantage of. Are you really thinking about your Student Loans in the comment combat zone . Probably not. You might not have the g. I. Bill. Youre taking a large loans. With very Little Information at your disposal and you might have been coming off active duty where it was very difficult to have access to anyone who even knew anything about getting the right information. That makes it very confiscated. You are not able to buy a house when you come out of your education. That impact is, when the g. I. Bill the investment of the g. I. Bill is completely lost when you are mired in student debt. You see what an individual can do without student debt, its impressive. It really is impressive. You have 2530yearolds by houses for the first time. Theyre investing in the future. The impact of this is on the larger economy. I would like to point out something that is not often looked at. The issue of security. National security is a big problem with existing debt for veterans. A Service Member loses their clearance as a result of their high credit. Their high student debt. That is a direct impact to the National Security of united states. Thing that is an issue that would be great, refinance would be terrific for Service Members. Unfortunately, the protections offered are lost when a student desk when a veteran goes to refinance a loan. That is something that has not been addressed. A very powerful point. Were talking about how the impact of Student Loan Debt on and the impact on the larger economy we have studies now showing that its causing people to not be able to buy homes. They are not able to start small businesses. They are not able to start their economic futures. This is why more than 30 senators have introduced the bank on students emergency loan and refinancing bill. We want to lower Interest Rates so that more people have a fair shot at getting started. I want to pick up on the point you made. , the Consumer Financial Protection Bureau put out a report analyzing financial products. A report suggests that private Student Loan Debt collectors may be making misleading or intimidating statements to course veterans into paying their debts. Including threatening to contact a Service Members chain of command or repercussions under the military code of justice. March, the gao released a report raising issues were guarding the oversight regarding the oversight. Are you concerned that the federal Student Loan Debt collectors are also using military Service Members service to pressure them to repay . Not only concerned, i am absolutely outraged. This is something that is unacceptable. The sallie mae case was a clear signal that this is not something that will be accepted in our society. When an individual is service, and he or a service or to take advantage and abuse those Service Members because they dont have the right information. If you have an individual who does not have access to clear information and then somebody calls them offering what they believe is information, taking advantage of them, that is sadly unacceptable. Simply unacceptable. I remain deeply concerned that debt collectors for the federal Student Loan Program are breaking the rules and misleading far worse misleading borrowers. Followings must be the law and should not take advantage of people. I think this is an issue that deserves very serious attention. Senator reed. Thank you very much. Your leadership on this issue is critical. Do not just the individual progress, but to our economy overall. Robert recognize you are from rhode island . Are you related to Kenny Jeremiah . No. Pee wee football with Kenny Jeremiah in rhode island. Hes your cousin or uncle. After graduating college, he went on to columbia. Federal law requires that the individual borrower be informed of his or her rights or rePayment Options before they enter the program and as they graduate. Do you think you get effective advice . That you had the full range of rePayment Options about Public Service . Thank you, senator. Yes, i did receive counseling. That was believe particularly effective. It involves going to the motions and clicking on boxes. That, do youis not have a question . That kind of interaction. I felt like i had that opportunity during my undergraduate years. Things were more clear. There were your parents helping out. As we advance in our careers and to teachingooking yes, i read through it. It was not clear. Someone liker myself who is trying to pay rent and teach 100 students and grade their essays and finish a masters thesis. The tuition is still roughly 1000 a year. And graduateimit schools. The counseling for graduates have to be more focused they are really taking out big sums of money. There is no limit on that. Ms. Hubbard, thank you for your service and your testimony. There are lots of rights that Service Members have, but they have to be aware of those rights. How good does the department of defense how well do they do in forming those Service Members veterans . R rights as piecese was a couple of to that puzzle. This is a great question. Thank you for that. Is department of defense certainly responsible to some degree for making sure that their people are taking care of. On the other end of things, if a falseer is giving them information, simply lying to them, whos to say that the chain of command is an expert on education loans . They are probably not. There are individuals within the determine of defense who are, but can they reach individual . I doubt it. Military toof the be able to reach out and find their own information with an aggregated dashboard that would hopefully allow them to over some red flags. Those red flags would bring the person to go out and seek that information from that dod education expert and then hopefully that would circumvent the process of those servicers lying to those Service Members. This is a rough historical analogy. In the old days, used to be able to the places offlimits. I urge secretary hegel to think about this. Maybe there has to be consistent method of unedifying of identifying services that are negligent and doing worse. With that dashboard come you can have, dont go there. Thats important. Can i ask a question you go right back to the services. Become over reliant on major entities to do the servicing. You have any advice about how we can provide Better Services to ones that dont try to take advantage of students . How we can do better with the services . Indicated in my testimony, i still believe there needs to one place of contact for all borrowers and that the contractors be invisible to the students. Student if the servicers were mandated to be contractors with identical processes and policies, a lot of this confusion would be limited. A that is where i keep coming to. Keep it simple and therefore, when the contracts are renewed for servicing, maybe they would be offered to entities outside. Credit cards and mortgage servicers have some Excellent Technology and dont have the default rates that we have today. Thank you very much. We will try to do a second round before votes. A question for all of you. Federal Student Loans are safer than private loans because they offer rePayment Options. We often hear that federal loans lacked comprehensive and consistent servicing standards. I would like each of you to answer a yes or no question on this. The regulators do regulators need to establish standards so that our words have more protections . Yes. Yes. Yes. No. Student loan borrowers are typically young, typically history. Redit they enter this market place and at the service or not service them quite right, they end up making mistakes and report loans as the late. Our words are penalized or borrowers are penalized for it responsibly management that, if you will. How do servicers affect credit cards and Credit Scores . I would imagine that if there were issues repaying, that would affect Credit Scores down the line and therefore would inhibit ability to make home purchases or car purchases. Orn apply for jobs government jobs. About a soldier in combat. You talked about veterans, soldiers and servicemen coming home. And facing student loan problems. Just how its much more difficult to launch their economic lives. Talk to me about what a credit score means to current and former military personnel who may have to ask projects in to get security clearance. There are two sides to this point. The security issue and the economic issue. On the security side, if an individual has a bad credit score, they are not going to get a good clearance. That might be critical to their future in the military or their personal future on the private side. Can you give examples of that . Economicatively, the issue is huge. Investment that america has made his old badly crippled when these individuals cannot invest in themselves and further on in the economy. When they can buy a home, th at money is lost and its taken out of the economy. In terms of Government Investment, you see a soldier now has a lower credit score. See that soldier eligible for a promotion perhaps the military is looking to provide security clearance for this new position. They are denied because of their credit score in the Government Investment then goes to waste in that sense. It does. This comes to a question of common sense. We have good individuals were strong soldiers that do well, but they have a bad credit score. What it looks like is they are not responsible. The servicer might have taken advantage of this individual and what outlined to them and allow this person to take out more loans than they were capable of or just completely inflate the rate on them and they go and come back at 75,000. That is a big problem. There is no way for the there is no appeal on this. My credit score is lower because of x y and z. There are appeals. It does not take away the dow. The doubt tha is hard to scrub. Investigatorsed have uncovered Serious Problems with student loan servicers and collectors. The gao raised questions about federal debt collectors pricking the rules and federal regulators have cited sallie mae for violating federal laws by overcharging Service Members honest in loans. When loan servicers break the rules, they push borrowers to do things that are good for the bottom line of the servicer, but not good for the borrower. Ultimately, its dunes are not able to repay, is the taxpayers will pick up the bill here. The of the problem is, rules are complex and it makes it hard for bar words to know what they should expect from their servicers. Orrower thinks they have not been told the truth or that somebody has broken the law , where do they turn . Where do they go now . Ms. Hoover . The time, the students now are going back to their Financial Aid office. They are so confused about where else to go. That, sometimes comest in stone do anything. Sometimes, students dont do anything. We continue corresponding with our students who are delinquent so they do come back to us. Again, im a small school and that is not real distinct for large schools. Basically, what you uphold told me is, they dont have any place to turn. Until we have the Consumer Bureau of protection the students are not aware of that. The lack of not understanding of where to go. I would like to point out one scenario. There was a Service Member cited by the cfpb on this particular topic. This individual went to lower their loans to 6 . The servicer look at the loans everything below 6 was raised. That 6 did not get lowered. This individual made a call and had all of their loans raised as a result. That is a prime example of what happens this particular issue , whichnd out by the cfpb is the primary route for individuals to make that complaint. Since they have come out and been soliciting this information, these stories have come out in droves. Stories like that make me sick. As they should. Borrowers should not be bearing the responsibility for keeping servicers in line. At the very least, if bar words borrowers have questions, it should be clear where they can turn for relief. Sallie mae has been touting its status as the federal student loan servicer with the lowest default rate. In february, i wrote a letter to sallie mae asking about the Company Positive fault prevention strategies. Data because not all strategies to reduce defaults are going to provide a successful repayment. Mae replied. They did not include the data for their default prevention program. Ive asked the department of education to provide default prevention data for sallie mae and other federal loan servicers. So far, no answer. Hubbard, do you believe that borrowers are getting sound advice from servicers like sallie mae at about what to do when they get behind on their payments . Bat, the single metric of the lowest default rate is pure nonsense. Just because you have low default rate does not mean individuals are not mired in debt. If i make a low payment for the rest of my life, i will be paying forever. I will never get a house. I will never have the money to start a family or a business. I will never be able to put back into the American Economy what has been given to me. Just because the individual goes to find out information does not mean on the back and it is not being treated harper lay. Withund issue after issue sallie mae, with tons of complaints. They were the number one Complaint Service or of any servicer of any servicer. Will put, mr. Hubbard. Quarter of sallie maes Loan Portfolio is in deferment or forbearance. As you point out, the interest continues to accumulate. This is going to add to their debt burden, and ultimately made to round them. We need real data to tell us which strategies work as a life preserver, and which work as an anchor for borrowers. Can help drive stronger accountability for sallie mae and other loan providers. We continue to push for them. Thank you all for being here today. Thank you, senator warren, and further witnesses. You for your testimony. There will be written questions from members who were here are not here. Lees answer them within a week, if you can please answer the within a week, if you can. [captioning performed by the national captioning institute] [captions Copyright National cable satellite corp. 2014] we are also covering a Senate Budget Committee Hearing today looking at this very same issue with Student Loan Debt. Both hearings will be available at www. Cspan. Org. Yesterday, eight primaries across the country, including the senatorial primary in mississippi between senator thad mcdaniel. Nd chris the club for growth is calling to pull outcorcoran of the race. The phone is on Cameron Joseph, a political reporter with the helm newspaper. There were eight states with primaries. Cameron joseph, lets go to mississippi first. What is the latest . Probably the ugliest in a couple of years it will be another three weeks, it looks like. Senator cochran did not manage a win. He is trailing his opponent, chris mcdaniels. Run a fewike it will more weeks, both of them beating the heck out of each other. Cochran had very little momentum. He managed to stop mcdaniels momentum with a local scandal and a local blogger who filmed his wife, who is in a nursing home. Be a really nasty race if this continues. Because this is headed for a runoff, what happens now with outside money . Caller both candidates are broke. They are pretty heavily dependent on the national groups. Senator cochran has very Little Campaign money or structure going into this. Somes bailed out by mississippi folks. His nephew has been running the super pack. Pac. Chris mcdaniel will have to lean heavily on the club for growth, more heavily than he has. One of the few at theear that shows th establishment has been winning most of the races. Who hasis an older guy not won a race in a little while. Lets go to iowa and what happened there for the open seat for retiring senator tom harkin in the republican primary. Really joni ernst is unknown going into this, had some backing from governor branstad early on. She would look like be able to win that primary two months ago. Got to washington and just took off afterwards, and ended up with over 50 of the vote. Offs going to be facing against congressman bruce bailey. He basically denigrated the senior senator as just a farmer who should not be house of the Senate Judiciary committee. Its going to be a race that even a couple of months ago democrats are feeling pretty good about. Baley does not have much of a record to be hit on. They are going to try to define her as this harsh ideologue. Its going to be tougher to do the working versus rich people argument. Baley has made out of touch, its outoftouch comments himself. It will be an interesting race to watch. Host there were comeback bids in mississippi and california. Lets begin with mississippi. Caller Travis Childers is the democrat. That will be a fun one for him. Mississippi is not the easiest place to win for a democrat, statewide. Gene taylor, another democrat in not do quite as well. He decided to switch parties and ran as a republican. Well, surprisingly, considering he was a democrat for many years. It to not quite make where he needed to be. He is trailing by a few points. Host in california, what was the outcome . Caller to be determined at this point. It is looking like deja vu of a nightmare scenario. It is a democratic district in the inland empire. Because california is unusual, they let the top two candidates go forward, regardless of party. Last year two republicans were banned. This year they have the same candidate running, pete aguilar, that they are backing, the redlands mayor. Congressman joe baca was also in the race. Aguilar is barely in second place right now. In firsta republican place and another republican just a few votes behind him. It was very close. It looks like they barely dodged a bullet in this district. They almost had the exact same scenario happened two years ago. Host the gop nomination to face senator cory booker. What is this looking like for november . Caller it is looking like the 1970s. Jeff bell was a speechwriter and pretty centrist republican. He went on to lose the general election. There has not been a senator from new jersey with the percent. I dont see how jeff bell has any help here. It certainly is an interesting story. Talk about alabama. What are the highlights from there . Caller it was a crowded race. A couple of these districts, there is an open seat there. Looking at theng democratic side. There is a democrat turned republican turned democrat. Kind of very conservative democrat that might have an outside shot. Host Cameron Joseph with the hill, thank you very much. At 1 30 eastern, when First Lady Michelle Obama will speak about efforts to end veteran homelessness. Gibson. Novan and sloan senate be live with the hearing on what is called stalking apps. The Senate Privacy subcommittee is looking into the issue. Today marks the 25th anniversary of the Tiananmen Square crackdown in china. We are marking the event with the impact those protests had on china and the rest of the world. H. W. Bush security is on the panel. On cspanre tonight at 8 00. Windswept point on the northern shore of france, the air is soft, but 40 years ago at this moment the air was dense with smoke and the cries of men, and the air was filled with the crack of rifle fire and the roar of cannon. At dawn, on the morning of the 200 25f june, 1944, rangers jumped off the British Landing craft and ran to the bottom of these cliffs. Their mission was one of the most difficult and daring of the invasion, to climb these cliffs and take out the enemy guns. The allies had been told that some of the mightiest of these guns were here. They would be trained on the beaches to stop the allied advance. Sawrangers looked up and the enemy soldiers at the edge of the cliffs, shooting down at them with machine guns and shooting grenades. The american rangers began to climb. Weekend, American History tv will mark the 70th anniversary of the dday. Watch this years commemoration. 11 30 withlowed at craig simon, who will discuss his new book. 12 30, he will take your questions and comments live. A look back at president ial speeches commemorating the day. Saturday on cspan3. President obama has arrived in brussels for a meeting with fellow heads of state focusing on the crisis in ukraine. The president s visit to the belgian capital is part of a threepart visit to europe. The president said today that ukraine could become a vibrant, thriving democracy if the World Community would stand behind it. [speaking foreign language] ladies and gentlemen, the heads of the delegation. The ceremony commemorating 25 years of freedom. [applause] i [speaking foreign language] the ceremony will begin. The National Anthem of the republic of poland. [speaking foreign language] please, take your seats. [speaking foreign language] [speaking foreign language] i am pleased to welcome the guests who celebrate their 25th anniversary of a great day of independence. It was here in the capitol, a quarter of a century ago. Not many generations before us had the opportunity to develop in a free country, but we did. Today it is my pleasure to welcome you in the city of people who are creative, free people who are passionate about freedom, people who do not take freedom for granted, even if it was severely find in its history fined in its history. Nowadays it is a modern,. Hriving capitol we wish to extend the warmest welcome. I wish to welcome the heads of foreign delegations here in the warsaw, which celebrates the 25th anniversary of freedom. [speaking foreign language] the declaration of freedom has been designed especially for the president of poland. It is open to be signed by anyone who subscribes to the values. In a moment it will be read out for you. [speaking foreign language] warsaw declaration of freedom. We, citizens of free and uniting , guided by solidarity in and otherf freedom joint values that gather us here ,n warsaw on the fourth of june marking the 25th anniversary of election where the selection of solidarity ushers in major transformation in countries in central and Eastern Europe. We express our view that freedom and solidarity represent fundamental values on which people should base their relations. We declare our profound attachment to values that represent the common heritage of our free nation, and source of human rights, source of the rule are thewhich fundamental principles of democracy. A and theare appreciation that respect for human rights and for fundamental freedom is a central factor to the justice and stability in the whole world. We oppose any manifestations of discrimination. We condemn all acts of violence that accompanied them. Past ofing the dramatic the afghan countrymen, we theess our conviction that annexation of crimea violates of order inndations europe and undermines the functioning of the whole international system. [applause] good neighborly states between based on sovereignty, territorial integrity, and political independence of state. We jointly subscribe to the hope that this freedom and solidarity in relations between nations and between individuals. June 2014. [applause] [speaking foreign language] the president of the republic of poland. [applause] france, president , madam speaker, prime minister, distinguished ladies and gentlemen, members of parliament, senators, all , we are nowd guests standing in front of the royal castle in warsaw. Difficultf a very history. Looks on. Y on september 1, 19 39, the Second World War broke out. The castle burned down. On the 17th of september, on the same day following the poland wasin pact, also attacked by the red army. Then poland lost its independence. The polish people dissipated in war operations from the first to the last day. They would be fighting on nearly all fronts. Were not granted the joy of freedom after the victory of allied forces over the nazis. Deprived by the arrangements made in yalta. The victorious powers decided to delineate influence in europe. Found itself in the realm dominated by the soviet union, in a world governed by stalin for a few long dark decades. The iron curtain prevailed in europe. Our dreams and aspirations survived. Our pursuit of freedom survived. We regained our independence in 1918. The source of this power was the mainstay of the nations life. We derived our power from the clear signalch, a of our belonging to the western world. Certain enclaves of normal the form ofailed in small trade, small enterprises. Changing, andwere the forms of fighting for our freedom were changing. After the drama of the postwar followed other dramas. Like the worker rebellion in june 1966 and december 1917 1970, they were repressed in blood. [indiscernible] june 1976 was of special importance. Breadrkers striking for support. Rt gain tomorrow, on mission street, in in front of the seat of , i willunist censorship unveil a new free speech memorial. Yet, even today i already wish 10 homage to those million of solidarity people within the borders of the empire, and addressing the millions and reaching their hearts was the polish pope, todays Pope John Paul ii. Let your spirit this send, entering you the faith. Thanks to such a great number of us, a Great Movement of solidarity managed to survive the martial law, bloody pass vacations of manufacturing pacifications of manufacturing the systems ofl the internal decomposition of the soviet union began to show systems of the internal the composition of the soviet union began to show. The communist system propaganda is dictatorship. Poland, this was accompanied by the strengthening resistance. F the solidarity underground every successive victim of the has the resistance and unites people in opposition. That is why communists had to make concessions. That is why in 1989, the political compromise reached at the roundtable was possible. Back then, it was determined that solidarity would be rel partially free elections to parliament would be carried out. , in both, 1989 , theally free elections forces of freedom got the upper hand. Redold forces were defeated it was a political defeated. It was a political knockout victory, and in spite of all of the preferential treatment. The whole nation decided about the fate. Without spilling even a single drop of blood. 25 years ago on june the fourth, 1999, communism finished in poland. We are told the iron curtain of tore down the iron curtain of propaganda. In order to build a system that was not democratic. For the first time, elections were not fiction. These were genuine elections. Our success triggered off in an avalanche of events. It was like the first domino blow. Regimes would go down one after another, until the evil empire was fully disintegrated. Gives you enormous power. The desire for freedom is contagious. Seen up close, freedom inspires human action. Beganriumphant progress in poland. The wall which divided the german nation and the german states and symbolized division of europe fell down. Further. Om spent romania, bulgaria, the balkans bringing freedom to lithuania, latvia, estonia. People. Ecame free we needed to decide how to manage the newly regained freedom, how we shall reinforce it. Freedom that had previously been , now turning to a sense of responsibility. , fornguished guests poland, it was a time of bearing pioneering daring pioneering. We were implementing in the spirit of compromise. The patrons of such activity was the first known communist prime minister. Last 25 years of polish freedom has been marked with ,xtremely difficult decisions with intensive work, much sacrifice, but also with huge achievement. We are more experienced than we were in 1989. Knew happens because we how to take our challenge of economic reform and to shoulder the burden of freedom. We were successful not only in but alsog the economy, laying down foundations for the state of law. Byreinforced our security developing strategic partnerships, mostly with united states. We also became members of the european union, something that we dreamed of. As amust also be included great achievement of polish freedom is reconciliation with then poland and the reconciliation with the germans and ukrainians. Perspective, constant llenge continues to be reconciliation with russian nations for freedom, when it is wisely managed, will also favor good relations with its neighbors. That is why it is with great satisfaction that together with , will we will freedom,motorway of also running to the east of poland in the future. Weve appreciate the freedom we have retained. We are starting to treat it as something for granted, something obvious. We remember the bitter taste of when freedom was lacking. We remember the price we had to pay for regaining it. Im happy to see that 25 years , it wasre than 71 worthwhile, 80 of people declare themselves to be happy, acceptance ofsed polands alignment and in the european union. The 25th anniversary is the best opportunity. Cogent,o thank this a to thank all polish thank this occasion, to thank all polish men and women. Thank you for your courage, for the acceptance of difficult reforms. Freedom is aof perfect opportunity to enjoy the day, and to enjoy our good fortune. We are fortunate enough to live in a very happy period of time, the happiest in polands existence. This is a good occasion to thank everyone. Those who have the will to change our country with their hard work, their effort from the 25 years of freedom, i wish to thank all of the opposition leaders, all of the freedom fighters, and my special words of gratitude. I also wish to thank all of the president s, prime ministers, members of parliament, local government, for all they have done in the last 25 years. Wish to express my wholehearted thanks to our friends and nation, together fromwhom we broke free division. I also wish to thank our allies and friends from the free world who showed support to our fight. I am glad that today, together ith the president of france, will have the opportunity of unveiling an exhibition. The exhibition that will commemorate the people of free world. Speciallike to express thanks to the united states, barack obama, for raising the proud standard of human and Citizens Rights so very high. I also wish to thank the ones who helped us to manage our freedom wisely, to reinforce it. People who lived in the free world, and who believe in us, who lent us support in our endeavors to have poland anchored in the western world, for the membership of nato, and the european union. I wish to thank all free people nowadays. The ones who show understanding to those fighting for freedom. I wish to thank you for supporting if you want to follow the same path as we did, the path towards freedom. There is no freedom without solidarity. This is what we shouted out loud during the solidarity demonstrations. There is no freedom without solidarity. 2014, i wish to reiterate this truth. There is no freedom without solidarity, and there is no freedom without the solidarity of the free world. There is no freedom without solidarity. There is no freedom without solidarity with the countries of the eastern partnership, especially with moldova, georgia, and ukraine. To express those words clearly in the presence of the president elect of ukraine. Is needed for the the nationation, that is facing the threat of and is facing immense challenges of modernization. There is no freedom without solidarity with ukraine. For that reason, im extending my warmest thanks to the leaders of the free world who arrived in so great numbers today. I find your presence a source of pride and joy. Your presence here in front of a raised from rubble substantiates our belief that the defense of freedom continues our hearts and minds, it substantiates the convictions that the defense of freedom remains the source of our solidarity and our power. Thank you. [applause] [speaking foreign language] the president of the united states, barack obama. [applause] hello, warsaw. [applause] mr. President , mr. Prime minister, madam mayor, heads of state and government, past and present, including the man who jumped that Shipyard Wall to lead a strike that became a , the president who transformed th enation the nation, thank you for your outstanding leadership. [applause] distinguished guests, people of , thank you for your extraordinary welcome and the privilege of joining you here today. I bring with me the greetings and friendship of the american people, and of my hometown of chicago, home to so many proud polish americans. [applause] chicago, we think of ourselves as a little piece of poland. Some neighborhoods, you only hear polish. The faithful come together in churches. We have a parade for polish constitution day. Every summer we celebrate the taste of polonia. We are all little bit polish for that day. [applause] being here with you, it feels like home. [applause] today, we witnessed a scene that had once seemed impossible. Election, where for the first time, the people of this nation had a choice. The communist regime thought an election would validate their rule, or weaken the opposition. Turned out in the millions. When the votes were counted, it was a landslide victory for freedom. One woman who voted that day said, there is a sense that something is beginning to happen in poland. We feel the taste of poland again. She was right. It was the beginning of the end of communism. Not just in this country, but across europe. Year ares of that seared in our collective memory. Citizens filling the streets. Hungarians, austrians cutting the barbed wire border. Hands acrossining the baltics. Czechs and slovaks in their velvet revolution. Berliners climbing atop the wall. We have seen the extraordinary progress since that time. Germany, nations in central and Eastern Europe standing tall as proud democracies, a europe that is more integrated, more prosperous and secure. We must never forget that the of so much of this revolutionary change for this blossoming of hope was led by you, the people of poland. [applause] the victory of 1989 was the culmination of centuries of polish struggle, at times in this very square. Generations of poles who rose up and finally gained independence. Soldiers who resisted invasion from the east and west. The righteous among the nations. The heroes of the warsaw ghetto who refused to go without a fight. The free polls of normandy, and wass who even as the city reduced to rubble, waged a historic uprising. We remember how when an iron curtain descended, you never accepted your fate. Poland ascended to the chair of st. Peter, he would return and here and warsaw he inspired a nation with his words, there can be no just europe without the independence of poland. Today we give thanks for the carriage of the Catholic Church and the fearless spirit of saint. Ohn paul ii [applause] we also recall how you prevailed 25 years ago, in the face of beatings and bullets, you never wavered from the moral force of nonviolence. Through the darkness of martial law, poles lit candles in their windows. When the regime finally agreed to talk, you embrace the dialogue. Elections,eld those even though not fully free, you participated. Saide solidarity leaders at the time, we decided to accept what was possible. Poland reminds us that sometimes the smallest steps, however imperfect, can ultimately tear down walls, can ultimately transform the world. [applause] of course, your victory that june day was only the beginning. As your president just indicated, democracy is more than just elections. True democracy, real prosperity, lasting security, these are neither simply given nor from the outside, they must be built from within. In that ageold contest of ideas between freedom and authoritarianism, liberty and oppression, between solidarity unrest showsce, s the enduring strength of the ideals we cherish as a free people. Here we see the strength of democracy. Citizens raising their voices, free from fear. Here we see Political Parties competing in open and honest elections. Judiciaryependent working to uphold the rule of law. Here and poland, we see a vibrant growing Civil Society that holds leaders accountable because governments exist to lift up their people, not to hold them down. Here we see the strength of free markets, and the results of hard reforms. Gleaming skyscrapers soaring above the city, and superhighways across this country. And livingubs standards that previous generations of poles could only imagine. This is the new poland that you have built, and economic merkel miracle. [speaking foreign language] [applause] here we see the strength of free nations that stand united. Across the centuries of struggle , polands fate was too often dictated by others. Invaded ands conquered, carved up and occupied. Those days are over. Understands as few other nations do that every nation must be free to chart its own course, to forge its own partnerships, to choose its own allies. The anniversary of polands membership in nato, we honored polish disturbance in iraq servants in iraq and afghanistan. This is the poland we celebrate today. The free and democratic poland that your forebears and some who are here today dreamed of and fought for and, in some cases, died for. The growing and secure poland that you particularly the young people who are here today have enjoyed for your entire lives. Its a wonderful story, but the story of this nation reminds us that freedom is not guaranteed. And history cautions us to never take progress for granted. On the same day 25 years ago that poles were voting here, tanks were crushing peaceful democracy protests in Tiananmen Square on the other side of the world. The blessings of liberty must be earned and renewed by every generation including our own. This is the work to which we rededicate ourselves today. Our democracies must be defined not by what or who were against, but by a politics of inclusion and tolerance that welcomes all our citizens. Our economies must deliver a broader prosperity that creates more opportunity across europe and across the world especially for young people. Leaders must uphold the public trust and stand against corruption, not steal from the pockets of their own people. Our societies must embrace a greater justice that recognizes the inherent dignity of every human being. And as weve been reminded by