I mean yes we are going to be living i mean i have an economic forecaster but everything i read suggests we are going to be living with an unusually high levels of unemployment, a lot of pain from over indebtedness and a quarter of the country is on food stamps. I mean its not a great depression. We are not repricing exactly what happened in the 30s but its a version of that. See the Consumer Financial Protection Bureau estimates that Student Loan Debt is more than a trillion dollars. Up next the Senate Budget committee looks at how that that affects borrowers and the economy as a whole. This is an hour and a half. [inaudible conversations] see this hearing will come to order. I want to thank senator johnson who is filling in today for my Ranking Member senator sessions. Welcome to you and all of our colleagues who are joining us today as well as a roomful. Welcome to all of you on a really important topic today. We are going to be talking about a challenge that 40 Million People around our country face today and for Many Americans who want to further their education and build their skills taking out Student Loans has become a college prerequisite. But that debt can have lasting consequences for borrowers and begin their chances of getting ahead. Insuring more americans get a fair shot at something many of us here in the senate are very focused on and a bill that is coming to the floor very soon which will allow borrowers to refinance their school loans is an important part of that fair shot agenda. I will be discussing that legislation and that more later but first i want to thank our witnesses who are here with us today who will help shed some light on the challenges that now now mounting student that can pose for borrowers and their economy. Today we are grit to be hearing from rohit chopra the student loan ombudsman for the Consumer Financial Protection Bureau and im pleased to welcome Britney Jones today. She is a recent graduate and former president of the student virginia education association. We are also going to be hearing from Richard Vedder a distinguished professor of economics at ohio university. A College Degree is a worthwhile investment and for many it can be a ticket to the middle class. We know that on average College Graduates earn more and they tend to have lower Unemployment Rates than their less educated peers. A highly educated work force is also good for our country. It strengthens our middle class, it strengthens the workforce will need to compete in the 21st Century Global economy. More and more jobs of the future will require postsecondary credentials or degrees and in fact in the coming years as many as twothirds of all jobs will require at least some College Education according to the center on education and workforce. But to afford college many people have to turn to Student Loans to help finance their education. In just a few moments you will hear from Britney Jones. Shes going to be talking about how taking out Student Loans made it possible for her to get a College Degree and britney id look forward to hearing more about your experiences. You were to start a teaching career and the same time paying down the student loan the but later college. Of course britney is not alone. Dealing with overbearing student debt is becoming a reality for growing number of americans. Statistics are staggering. Today the average College Graduate will have to pay back around 30,000 in Student Loans and a Record Number of young households owe student debt. Back in 1989, 16 of young households have student debt. By 2010 that figure had more than doubled according to the pew research center. More young people than ever before are dealing with more student debt than ever before and that can have lasting consequences. Americans who took out school loans lined it difficult to save and accumulate wealth. A recent study found College Graduates without student that had accumulated seven times more wealth than those who are paying back school loans. Crushing student student debt isnt just hurting borrowers. There is mounting evidence that student debt is holding back our economy. Historically Young Americans have been the source of Economic Activity as they set up a households and start their own careers but today many are finding it difficult to save even for a down payment on a home and hide monthly bills to pay back Student Loans can disqualify many people from many many even getting mortgage. And firsttime homebuyers arent able to get a mortgage it can adversely affect the housing industry as a whole. Thats why groups like the National Association of realtors and Homebuilders Association have expressed concern about the overbearing financial weight of Student Loans. Student debt can stifle entrepreneurship. Young people who dream of starting up their own business arent able to take the risks and the business they need when they launch a startup. They not student loan scam or that young people from saving for retirement while making the kinds of purchases that help further economic recovery. Mr. Chopra i know these economic consequences are what you and others in the Consumer Financial Protection Bureau have called the domino effect and im looking forward to hearing more details in your testimony about those negative Economic Impacts. To address these challenges as a starting point we need to ensure that student loan servicers, those are the companies that handle the billing to track borrowers payments are treating borrowers fairly and responsibly unfortunately there have been reports of student loan servicers mistreating borrowers. Some people have discovered their loan servers or hasnt properly process payments and complains that student lenders have for borrowers into default if a cosigner dies despite the barro being current on their loan payments. I was very troubled to hear recent reports that sallie mae was overcharging military members on their Student Loans. Sallie mae has agreed to pay nearly 100 million in fines after charging military members higher Interest Rates and ive asked secretary arne duncan to investigate to make sure other student Loan Servicing companies and hundreds and not doing the same but we can do more to help our wares. The bank on student emergency Loan Refinancing at is a bill from senator warned that i cosponsored along with several democratic colleagues. That bill will allow borrowers to refinance their federal student debt. The Congressional Research Service Estimates that this bill would let our wares save 4000 on average. Passing the legislation would put more money in borrowers pocket so they can make ends meet, make down payment on homes or start new businesses and help grow our economy. Right now people can refinance their home loans are their there Business Loans when Interest Rates drop. This bill will let our wares with federal student debt do the same and they should be a bipartisan issue. Last year for example republicans and democrats came together to pass the bipartisan student loan certainty acts. That bill allows far worse to take advantage of lower Interest Rates established by the free market. This refinancing legislation would use the same freemarket principles to help those with existing Student Loans. At a time when Higher Education is more important than ever to our nations longterm competitiveness a College Degree shouldnt drown far worse in debt. We need to make sure people who choose to further a their education and build skills are better able to afford college and manage their student debt. It is an economic imperative. To strengthen our middle class to strengthen our work orders and help spark Economic Growth Congress Needs to address these challenges. Im very delighted to have this hearing today and before i turn it over to our panel of witnesses i would like to hear from senator johnson. Thank you madam chair. Appreciate you holding this hearing. This is an extremely important issue. Its a tragedy that we have our children incurring Student Loan Debt. I had a finance professor in college before we talked about the cost of capital in the complex issues with Corporate Finance he spent a day talking about personal finance. He said the reason they call the debt instrument a bond is because you go into debt and you put yourself in the bondage and you want to avoid that. I took that to heart. I have course had the advantage of growing up and going to college in the 70s when college was a whole lot cheaper. I worked fulltime and rather than leaving college with close to 30,000 in debt i left college with 7000 in the bank. I wish that were more possible. I would like to start with a chart that i prepared an i been using this in my powerpoint presentations as i travel around the state of wisconsin. I just lay out some facts in a food for thought here. What this chart shows is that in 1963 the total cost of a fouryear undergraduate degree in Public College was 929 per year. This thats room, board and tuition. By 1988 the actual cost had risen to 4678 which was 27 higher than growing with the rate of inflation. You can see as of 2012 the cost of college outstrip the rate of inflation by 22 and have time so rather than costing 7000 which is what would it then growing at the rate of inflation one year of college now in 2012 with 17,474. 2. 5 times the rate of inflation and i guess the question im asking is why . What is so different about what colleges and universities spend their money on that their costs would outstrip the rate of inflation by 2. 5 by the way to the proponents room and board. Food and shelter in the rest of the economy not necessarily on College Campuses but the rest of the economy are growing at a lower rate than inflation because we have become so much more reductive in those sectors of the economy. Obviously productivity is not a word we use in education which is a shame. Just kind of asking the question of why all of our good intentions and lets face it what we spend in college in terms of of students is 2 trillion in 1963 was wellintentioned but it had a very serious negative unintended consequence. In trying to make College Marks of civil we make it less accessible because we have made it so much more unaffordable. Oh by the way to add more detail to that chart over the 2 trillion we spent over that timeframe about 200 million was spent through 1963 in 1988, 1. 8 china dollars was spent as College Costs skyrocketed. Cause and effect them i will leave that for the reader to judge. I think mr. Vedder is going to talk about that as well. Madam chair you are correct, its a shame that in 2011 which is the latest numbers i have from the College Board average Student Loan Debt after four is a colleges 25,000. Of those 57 of students that incurred debt and private institutions is 29,000900 incurred debt. Another statistic is how long its taking our students to graduate. About half graduate pretty much in the four year time period. In other words they graduate in about 4. 3 years but the other half raises the average time of graduating to 6. 3 years. Again just asking the question why is that particularly when you have so many kids leaving high school with College Classes in the bag. Have we made College Funds available so readily that people can dither in college . Is just a question im asking. Now part of the hearing is to talk about other types of pieces of legislation to supposedly solve the problem. When i thing i think its important to talk about is how those might be scored. Currently the cbo is constrained by having to score the cost of these college aid programs under the federal credit reform act and under that scoring for the tenure period 20 fort because it doesnt account really for varying Economic Conditions or loan defaults its showing that Student Loan Program saves the american taxpayer and reduces the deficit by 135 billion over 10 years but at the use of fair value basis and account for Economic Times in the fall to cost the government 88 ilya dollars timeframe so its important to look at each legislation and we take a look at the fair value cost and the effect it has on the deficit. I think finally the only thing i want to talk about is a potentially unintended consequence of some of these programs designed for loans. In 2007 Congress Passed into law the College Cost Reduction access active 27. Established a Forgiveness Program the discharges any remaining debt after 10 years of fulltime employment in the Public Service. The borrower must have made 120 payments in order to obtain this benefit. In other words they have to keep keep they cant be in default over the 10 year period while theyre working for the public sector. For luke over the end said law law schools look to the new laws and saw an opportunity. Incomebased monthly statements are lowered than standard payment so the schools could cover graduates payments entirely for the first 10 years. The money for law School Payment assistance programs usually comes out tuition mostly paid with federal Student Loans. You understand what im saying there are . The law school is gaming the system. They are saying so all we have to do is we will make the loan payments for our graduate students or 10 years and at that point the american taxpayer will pay for the law degrees. At berkeley for example its part of the fee the professionals agree to be paid. Georgetown 350 borrowers take advantage of this program in earthly there are 263. By the way the average student debt of a law graduate of georgetown is 150,000 it were we as 115,000. The wall street journal wrote about this also. The university of chicago is also doing that and until recently georgetown had on its web site basically talking about how the schools aid combined with the federal plan quote means publicinterest borrowers might not pay a single penny on their loans ever back. Again i understand this 3. 5 trillion and Student Loan Program in the aid packages are all wellintentioned programs but i think we have to honestly take a look at the situation and look at the very severe and serious negative unintended consequences of our good intentions. Part of that is we have collectively enticed her children to incur 1. 5 chilean dollars in Student Loan Debt and now we are trying to figure out how to solve that problem. Thank you. We are going turn to our witnesses. Ms. Johnson thank you for coming and sharing your personal experiences. We are going to start with you. Good morning chairwoman mari senator johnson and members of the committee. My name is Brittany Jones and i thank you for inviting me today. My story starts as a second Grade Student at an Elementary School and the decision was made i Brittany Jones self proclaimed mathematician drama queen would declare to the world that i would become the second grade teacher. With little deviation i pursue this plan throughout my studies and is a teacher in turn followed by receiving my bachelors degree from Virginia Commonwealth University in Early Childhood education. During high school when my counselors began the conversations about attending college. They talk to me about the details color shifts in grants and financial awards. Naturally i assumed everyone to attend college. It was not as i was accepted and learned the amount of financially they would be offered that i feared i could not attend. After conversations with my Financial Aid counselor and various chats with my parents regarding the necessity of a College Degree i made the decision to enroll with the assistance of Student Loans and pursue my dream of becoming a teacher. Unfortunately the cost of attendance constantly increased while the grant funds decreased. Upon graduation in 2011 the joy of completing the first portion of my program was overshadowed by the chair that i have borrowed well over 70,000 in Student Loans from various sources federal subsidized unsubsidized perkins and personal loans and still a need to complete another year of school which was required to get my teaching certification. I like many of the students i have encountered was facing the decision of whether to continue my education and follow my dream of being a teacher or seek immediate employment. I recall one student who having borrow the maximum amount of Student Loans for one school year was unable to fill the gap in his cost of attendance. He withdrew from the university and never returned. Another student who ironically serve as our treasure also left for financial reasons. A fulltime student had a job in sales and was offered a position of store manager. Faced with the decision of incurring more Student Loan Debt she decided to for me personally when confronted with the decision to borrow another 20 grand, 20,000 to complete my program i decide it was best to postpone attendance. Immediately after Commencement Services ceremonies i drove to an interview for preschool teaching job began 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 and i was in my desired field. I was a the lead teacher in my own classroom. I was elated until the loan statement started to come. Because i owed approximately 60,000 in federal loans at the time and i was working full time i had to start paying them back. This proved problematic or they figured i would be able to afford paying 600 a month. I was making 10 an hour and paying over 900 in rent and insurance and other expenses a month. My parents were able to help do some of the payments to keep the loan in good standing. This continued for a few more months until i lost my job. In 2012 i received notice that i had defaulted on the remainder of my federal loans totaling approximately 58,000. The gentleman from long Company Called and requested the date by which i could send the 58,000dollar check or money order. After a laugh or two he then said he would be happy to help set up a payment plan. He put a dent calculaticalculati ons and determine i would be able to pay 653 a month. At this time is working it is a prekindergarten teacher making 13 an hour with payments for insurance and utility. I worked as many as three jobs at once just to make my Monthly Payments. Now two years later i was finally to apply for Financial Aid and returned to school to pursue my masters. As you can imagine the ordeal i wonder if my Student Loans a this decision a weary one. The search for alternative programs. I didnt want to collect any more student debt. My goal is to become a classroom teacher at not a teacher with more loan debt than she can fix in the air. A search led me to find a teacher residency program. Through this program which so began the summer will become a highly qualified educator with a masters degree. All fees associated with the cost of attendance will be repaid upon the completion of the program which includes four years teaching in Denver Public schools. This program is promising and an exciting time in my life yet almost 50,000 still awaits repayment. In Student Loan Debt has been the driving force of my decisions for the last eight years of my life and according to my current repayment plan is projected to be for the next 25 years of my life. Well into the years for which i should be planning retirement. It should not be this way. Senators you have the power to make sure that it is in this way any longer. You can take actions to help make college more affordable so students have a fair shot at are suing their dreams. Degrees and not debt should be our collective goal. I urge you to help increase student aid especially for those who need the most financial help you to urge you to help make Student Loans more affordable including by allowing refinancing of those loans as legislation from senator warren would do and i ask you to look for ways to make careers of Public Service by teaching more attainable by expanding the loan Forgiveness Programs. Thank you chairman murray and the members of this committee for the opportunity to share my story today. Thank you very much for coming and sharing that with us. Mr. Rohit chopra. Chairman murray and senator johnson members of the committee thank you for the opportunity to testify today about the impacts of student debt. The financial crisis destroyed trillions in wealth for families preparing to send a child to college and contributed 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 chilean dollars already owed by more than 40 million americans. There has been growing consensus that 1. 2 trillion could have repercussions that threaten the broader economy. The treasury secretary remarked that student debt is hampering our economy across multiple sectors of society and the Federal Reserve identified student debt is a risk to aggregate household spending. Executiveexecutive s in the Banking Industry have also cautioned the condition of the student loan market quote is now having a significantly negative impact on students the economy and taxpayers. According to a survey by the National Association of realtors 49 of americans say Student Loan Debt is a huge obstacle to homeownership in the National Association of homebuilders noted that student debt can impair the ability for graduates to qualify for a mortgage. Higher debt or does my not only delay household but also other purchases. Student debt can hamper entrepreneurship. Preliminary research on student debt and Small Business formation finds a negative correlation between changes in Student Loan Debt information of certain Small Businesses. Young workers who say the early for retirement can generate significant assets over the course of their careers that student debt may be stopping workers from even contributing at all. The same can be said about the impact on labor market outcomes. The American Medical Association noted that high debt riddance can impact of career choices of physicians leading some to abandon primary care altogether. Student debt can impact the availability of other professions critical to the livelihoods of farmers and ranchers in rural communities. For example veterinary students are graduating with debt averaging over 150,000 making it less likely they can make ends meet in livestock management practice in the list goes on and on. There are several areas that warrant attention. Servicing loan restructuring and refinancing and data availability. First servicing. As a financial crisis unraveled Many Americans faced improper foreclosures due to mistakes from their mortgage servicer. Im concerned inadequate service may be conjured into a growing student loan default problem now topping 7 million americans in over 100 and dollars imbalances. Last month after referrals from the cfpb regulators ordered sallie mae to pay nearly 100 million for violating multiple laws including illegal treatment of servicemembers with Student Loans. Second unlike other markets refinance opportunities for student loan borrowers are few and far between. When margarets borrowers the broader and just rates plummet their own incomes rise in credit profiles and prove they try to refinance. Responsible student loan borrowers rarely have these options. Third transparency which we must address. As fed chair janet yellen has stated problems and mortgages would rebound through the financial system. Currently financial regulators and the public lack fundamental information on student loan origination performance. Unsurprisingly the drivers of prepayment delinquency 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 for so many who feel that the dream is just now out of reach. Ignoring the warning signs may prove to hold back not only the future growth and dynamism of our conduit also our entrepreneurial spirit. Addressing these concerns in the near term may pay dividends for many years to follow. Thank you again for inviting me to participate today and i look forward to your questions. Thank you very much. Dr. Vedder. Thank you senator murray and senator johnson the other members of the budget committee. I wish to make three points. First the current Student Loan Debt crisis would have never happened had College Costs increased at the general rate of inflation. The primary cause of the student debt problem has increased university fees. We must deal with the root cause of this mainly runaway College Costs of inflation. Second there are many reasons for this University Price inflation several of which i mentioned in my written statement that one that is relevant here is that rising tuition fees are partially caused the federal assistance finance programs themselves. The programs themselves are part of the problem. Any significant successful solution to the problem of writing rising College Costs will work only if you radically change the nature and magnitude of federal finance. Third we are at or near a Tipping Point where fundamental change will come to Higher Education. These changes are starting to happen. I believe many policy proposals gaining prominence these days do not fundamentally address the broader problems and indeed would like to worsen rather than improve the situation. Table 1 looks at the inflation adjusted increase in tuition fees from various years over the last 75 years. Along the lines of senator johnsons earlier comments. We see that for the first half of that period tuition fees tended to rise 1 more than the overall inflation rate but since 1978 inflationadjusted tuition growth has tripled to well over 3 a year. If College Tuition inflation since 1978 were what they had been before that day, say 1 a year, tuition levels today would be almost 60 lower than they actually are. Public four Year University tuition levels would be in the three to 5000dollar range instead of seven to 12,000. Student loan volume with each romantically less. Its a bigger burden for example for a citizen of indiana to send their child to Purdue University today than at the end of the great depression. Even room and board charges far outdistance food and housing inflation rates. Solve the tuition fee problem and it will dramatically reduce the Student Loan Debt crisis. There are many explanations for rising tuition fees and three are discussed in my written testimony that the most relevant here is the explosive growth in federal student Financial Aid of this has contributed to rising tuition fees. There will be no permanent solution to the debt crisis without reining in federal programs. There are many ways to downsize these programs to make them more progressive which liberal democrat should like that also smaller and cheaper which republicans should like. Existing programs have failed miserably and provided greater access for lower income americans. The proportion of recent College Graduates coming from the lowest quartile of the tradition is smaller than it was in 1970 before pell grants or student programs. Rising income inequality has been associated with more federal student Financial Aid assistance and i dont think that is coincidental. In my written testimony i shall concerns about several Administration Initiatives including the College Rating system and gainful employment regulations but i want to briefly comment on the proposal of senator warren to lower Interest Rates on loans to pass borrowers. I think this is a bad idea for several reasons. Beginning with the fact that it does utterly nothing to address College Tuition inflation. Conscientious payers and debt obligations end up getting punished relative to nonpayers who get lower Interest Rates, a bad message. It will also add tens of millions of dollars to the deficit and national debt. There are other objections as well. We may be a senator johnson hinted over investing in some ways in Higher Education. The advantages of getting a degree are actually starting to decline not increase particularly for young graduates. We need to reduce our aid programs. Probably doing away with tuition tax credits and plus loans in constraining other grants. There are no solutions that merely doing more the same lowering Interest Rates more loans will worsen the situation and probably enhance not reduce income inequality in america. Thank you very much. Thank you very much. I really appreciate all of our witnesses today. For your information theres a lot of attendance today. Obviously a discussion of many people arent just in. We do have a series of floor votes beginning in a half hour so i will be strict with the timeclock today and allowing vitamins to each senator and calling on people in order of arrival. With that ms. Jones i wanted to start with you and thank you for sharing your story and being here today to testify. Her story really resonates with me. All of my brothers and sisters and i went to college on pell grants and Student Loans to finance their education and i taught children early on in my career which got me into politics to begin with. But the financial burden of Student Loan Debt is considerably more than when i graduated so i share your understanding and appreciate you being here. In her testimony he said he paid over 600 a month to cover your federal Student Loans. How much was your monthly takehome pay at that time . At that time my monthly takehome was roughly 1500. You have any money saved . I do not. Ive been using my savings to pay back the loans that ive taken out from my undergraduate degree. C. When you ran into difficulty repaying all difficulty repaying author loans did your service or offering the alternative payment plan like the incomebased repayment option . I didnt learn of the program until recently and had i been up for that program my would have been roughly 150 a month as opposed to 600 a month. You have been able to take advantage of the ipr you could have reduced that to 150 . Now much you would save if you were allowed to refinance . Over 10 years i would have been able to save more than 4000. See how would that have impacted your life . We always have to buy materials for the classroom because funding is limited so having the extra funding available would have made life easier. Definitely i would be able to savor the future and id be able to plan for retirement as opposed to wondering if it will be possible. I have to speculate that if you had known about ipr youd be in a much better place today but nobody told you. Mr. Chopra thank you for being here as well. You have forked directly with a lot of student loan borrowers and your reports have talked about some of macroeconomic consequences but let me ask you have you encountered a lot of stories like this . One of the top issues that are worse identifies difficulties repaying restructuring and rolling and loan modification programs and staying current. Our services are not reaching out and helping young people or even adults learning what their options are today . We learned a very painful lesson in the years around the financial crisis in the Mortgage Servicing market. There are fundamental incentive misalignments where what may be good for the loan owner or the investor and good for the borrower is not actually the outcome and Market Forces do to Market Structure finance can often cause terrible outcomes for everybody. Ive heard from a lot of people today who are paying back loans that they dont know how much they owe. They are having trouble getting that information. They dont get yearly statements. Is that something you hear a lot as well . I think its not actually just not knowing about it. We hear from many borrowers and the seed and the data that a number of borrowers are reaching out and are seeking help but are often told to choose forbearance we have continued to hear complaints from servicemembers and military families that they call about their Service Relief benefits and are simply told well just do a military forbearance. That option will keep interest accruing. It will make the debt ridden harder but its certainly easier for the servers are to accomplish rather than actually walking them through the steps to enroll in their legal benefits. Is hard for them to get good information personally. I have about 15 seconds left. Tell me in the last 50 seconds on the larger implications for our economy. In our discussions with the Banking Industry in particular the housing industry whose general concern about increasing debttoincome ratios so while the advantages of going to college the differential between College Graduates and nongraduates is growing most of that is growing because nonCollege Graduates wages are slipping. If College Graduates wages are higher when controlling for inflation the debt which is growing faster than tuition costs that deans less ability to create new credit whether for mortgages or to use those funds for other productive purposes. Thank you and my time is up. Senator johnson. Ms. Jones thank you for coming to testify to all the witnesses. Did high school or College Counselor ever go through the calculation of taking on Student Loan Debt based on the type of profession you are looking at . They did not. Actually when we started the conversations about college they simply let us know you can apply for millions of dollars in scholarships and grants. He does have to apply for them and you can talk to your Financial Aid counselor. Did you talk to the Financial Aid counselor talking about the. In the initial stages they simply were saying you have this much of the balance in your subsidized unsubsidized loans and you can take them if you want. Do you wish he would have like i had a finance professor . In other words if you could go back in time would you do the same thing over again and incur this much debt or try to figure out a different solution . In my experience and for my profession a College Degree was necessary. The options have not been available. I would do it because ultimately my goal is to become a teacher. Have you heard of the college of the ozarks. They go by the moniker of a College University set up for all the students work as setup is so nobody incurs debt. Does that sound like a good idea to you . Against a College Degree we are all talking about investment but the investment the loans up to match it so you ought to build a handle those when you get done. Should and being able to refinance the loans that we have with the a great benefit for students like me because loans made it possible. There was no other funding available to go to school and of course we have to have our degrees to teach. We dont want an unqualified person in the room and i dont see myself doing anything else so whatever it takes to get to the question that is what i will do. I think we need to look at what we can do to make it possible for everybody to get the degree they want and not the loan debt to go along with it. First of all god bless you from being willing to teach your kids. Mr. Chopra when you said student that is hampering a lot of that stuff how would shifting this debt from a select few to all of our kids and grandkids help our economy and entrepreneurship . You are shifting the debt burden from those that incurred the debt and there started deficit and we can afford it and this will be piling on our kids and grandkids correct . To read finance along and other product markets such as the Mortgage Market when broader Interest Rate environments 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 broader Interest Rates their credit profile. Are you supportive of im trying to think the 2007 at the forgive 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 yet. Nobody has actually received forgiveness from the program. Again forgiveness will come on the backs of the american taxpayer correct . That is congresss decision. Stan im just asking are you supportive of that program and how does that not hamper our economy and entrepreneurship if we shift from a select few to our kids and grandkids. Im just trying to point out what is happening. The distribution of the debt ridden will come in multiple different sectors but i think the marginal propensity to consume for young people who are prime ages of homeownership or durable goods is something thats a great worry to the financial there. Our debt burden may be higher propensity in some sectors but let me ask you are you disturbed about the political on wall street journal stories i was reading about how schools are gaming the program . Does that concern you because it sure concerns me. Leading up to the financial crisis the incentive misalignment between those who broker or offer loans and lime mint with investors or others can lead to very disastrous consequences. I dont know the specifics of the schools that you mentioned that aligning incentives between schools between Financial Service providers and others is critical to ensure market outcomes are efficient. Thank you manager. Senator whitehouse. Thank you very much chairman. One of the noteworthy things about Student Loans and they stand out from virtually all other debt in this respect was that somebody wangled a provision into the bankruptcy reform act years ago. Somebody who has left no fingerprints on the amendment. I think it was actually snuck in and conference and to this day nobody takes credit for it. But its not ken and became the law of the land and it provides that Student Loan Debt is not dischargeable in bankruptcy. Bankruptcy is provided for in the constitution. Its one of the elemental principles of american entrepreneurship and success is that you have the ability to fail and get tech in there and do it again. Virtually every type of debt is dischargeable in bankruptcy except Student Loan Debt. Mr. Chopra is there an economic justification for bankruptcy debt being treated differently than any other kind of debt in that respect or was that more than nature of an unexpected blessing to the then largely privately held student loan industry . Are soon to a rep port that was required by congress for the department of education to publish we analyze data related to student loan originations particularly private Student Loans throughout the past 15 years or so and the 2005 change in the Bankruptcy Code one would anticipate an ordinary marketplace that prices would come down as Bankruptcy Codes become more strict but in fact we saw that prices actually went up and this suggests that broader Capital Markets conditions may be larger contributors to pricing in some of these markets and it also suggests that as a general matter the Bankruptcy Code is operating in a very different way in the student loan market as it compares to other Consumer Financial product markets. We have had representrepresent atives from the private student loan industry come in and testify that it would be wrong to unwind is still provision that was snuck in the darkened of this provision because it would upset the settled expect patients of the loan industry which is, i Mean Congress as a whole it is particularly ruddock is particularly ruddock that it industry that snuck this then at midnight upsetting every settled expectation of our worst as to how their loans would be treated now try to defend themselves by the rule of settled expectations. I hope this is an issue that we can address because i dont believe theres any rational distinction between Student Loan Debt or other kinds of debt. Ms. Jones thank you for your testimony. You have been a terrific witness and you have brought a real dose of virility 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 because she now asks maybe 15 times why is it that im still pursuing the Education Field or it actually to pay for some of my College Education she borrowed against her own retirement so i could in fact become a teacher i want to be. The decision to stick with education was driven because of the desire to want to see future generations have the same chance that we have. I will say the decisions to take out more Student Loans made going back to school a hard decision to make is referenced in my testimony. I couldnt justify using more of my moms retirement. What is it im an likelihood of owning your own home . Considering i dont have the funds for down payment that has been put off for a few years but hopefully in the future i can work something out or we can work something out with a refinance bill so i can start saving again. Thank you ms. Jones. Senator ayotte. I want to thank the chair. I wanted to just ask mr. Chopra do we have an estimate by the administration yet as to how many student loan student loan are worse would take up a potential option to refinance their prejuly 2013 Student Loans and so do we have a sense of what numbers we are talking about and also do we have an estimate of what that will cost . It just seems important so we understand given the challenges we are facing is the nation as we look at this piece of legislation. Do we know what those numbers are yet . Senator the cfpb is an independent agency and not part of the administration so 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 urban Development Led to approximately 25 tausan dollars in Economic Impact per homeowner who was able to refinance. A mortgage is a much larger loan but then again a younger person with student debt may have a higher likelihood of being at the primates for certain purchases. Again i cannot speak to that. What im trying to get at is the basics. How much more we going to add to the debt . How much more is this going to cost and we ask asked for this important question about every piece of legislation because its basic information. Dr. Vedder perhaps with your background, lets start with 100 of our worst and we dont know that 100 of our worst will adopt this and certainly there will be some ratio to that effect but if 100 of borrowers were to refinance their july 1, 2013 loans or a large percentage what kind of impact . Do we have any numbers that we can think about here . I have not personally done in the estimation of that. However the math suggests the numbers can be very large. We have 40 million borrowers. Not all of them prior to 2013 but most of them so you have close to 40 million borrowers borrowing on average 25 or 30,000 so you are talking over chilean dollars. Just say for the heck of it you lowered Interest Rates two to Percentage Points on a trillion dollars of debt thats 20 billion a year. Thats real money. Its probably less than that. I have seen estimate of the deficit measured in the tens of billions of dollars over a long period of time. I think its a consequential amount of money. I think its an important piece of information that i hope we would have. Mr. Chopra i wanted to ask you about this issue that dr. Vedder race because i think its an important issue and in fact its an issue that i hear from parents and students saying we are going to get to a point where if the rate of increase of what it cost to get a College Education keeps going up at that rate, no matter what we invest the federal government if we are thinking we are going to be able to help the debt girten of someone like ms. Jones benefits going up higher than i dont know, it may not be going up higher than health care but this is a big issue in terms of high high how high its going. How do we get it that issue and if we are going with our investment how did we get to more accountability for these institutions to actually have to really be market raised think innovatively and deliver quality education at a more reasonable price because to me this is a big issue thats going to hit us all know matter what we do here. Senator ayotte i completely agree the rise in College Costs is an american tragedy. We should do everything we can to make sure that those people who are going to college this fall the class of 2018, the class of 2019 that they dont incur a lot of debt that we cannot ignore the class of 2008 in the class of 2009 who graduated almost by no fault of their own when they were started as freshmen in 2004. They could not probably imagined that they would graduate into a financial crisis and that is something that we have to work on both ends and it nods just one of those issues that both. I appreciate that but obviously we are going to look back at all of prejuly 2013 loans has a large number of people. It seems to me, i would like to have you answer that question for the record. We are investing already regard us of what we do on legislation a lot to help students in this country get a good education. I would like to know what your thoughts are and how we hold these institutions more accountable and how we force them to. Center and yet we have a lot of senators and boats coming so i will have them answer for the record. Thank you. I appreciate that. Senator baldwin. I appreciate both of you for hosting this hearing on such a critical issue. The statistics are staggering nationally with 1. 2 trillion in student debt. I look at the statistics for my home state of wisconsin. 70 of students in wisconsin are graduating with an average day of 28,000 in debt and these numbers i think starkly demonstrate that there is a Student Loan Debt crisis facing our nation. Again in wisconsin individuals with bachelors degree report making average Monthly Payments of 350. A graduate or professional degrees are making average Monthly Payments on their Student Loans of 448 and thats just an average figure obviously. It varies below and above. The length of Student Loan Debt obligations was nearly 19 years for persons with bachelors degrees and 22 years for persons with professional degrees and as we have heard through your testimony and the question so far, that this fact, these statistics are underscored by millions of personal stories and attic dotes and they affect personal decisions. As i have heard testimony and roundtables that ive held in wisconsin on this issue people literally deciding whether and when to start a family because of the impact of this debt. The career decisions that ms. Jones has talked about. You know there are a lot of folks who are getting Higher Education because they want to teach or because they want to do Public Service for work for a nonprofit or a communitybased Service Organization and get the level of debt and strange their career decisions in their career choices and financial decisions. We have heard a little bit of discussion on that. You get out of college and started business and put that off . Do you get out of college and do you rent . Do you buy . Do you move back home with their parents . Ive heard a lot of people are facing those choices in their late 20s, early 30s. Do you buy a used car . Do you buy a new car . All of those have ripple effects throughout our entire economy. Im glad ms. Jones that you have been talking about it and sharing your own story. So many have stepped forward to do this because this is a crisis we need to confront. I have in my very limited time to questions i wanted to pose to mr. Chopra about a couple of realities in our current law on student aid. I have heard from a number of students who have to hold down parttime work ,com,com ma sometimes almost fulltime work while studying and they are hit with something that is known commonly as the work penalty because their incomes may exceed the income protection allowance that is part of the eligibility calculation for federal 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 but i wonder if you can speak to the importance of the availability of Financial Aid to working students . There is no question an enormous number of people return to Higher Education after being displaced from the labor force in the Great Recession and have taken on parttime jobs to support their families. That something would be happy to discuss with you further. I certainly know that has been a reality in my home state and many factories that were closed. There werent a supply of jobs without significant retraining. We have heard a lot about that. The other thing i wanted to follow up on is the work you have done regarding servicers. Anything from simply failing to provide Customer Service to ignoring some of the legal obligations around notice and Payment Options and fees to certain borrowers. In 2004 the city Loan Marketing Association was privatized and operated as a private company over the past tenures it has restructured under a different entity. But despite the significant Public Benefit and subsidies the Successor Corporation received, it was selling a that was ordered to stop breaking multiple laws. I will have to move on reid of nevada senators who are waiting to ask questions and they build be called a short they. So freaking get an answer in writing of appreciate that. Senator warner okay. Thank you for helping us and we still have senator murphy and the vote will be called shortly eddie members who want to go vote can come back and we will keep going. Mr. Chopra one of the statistics that is interesting in comparison touche germany with the countrys medium income here it is a 51 of the median income. How to set a fast affect the students of those two nations . The lack of affordability of college may not only impact the students themselves but that also might impact of a broader balance sheet. As a resaw the rise of Student Loan Debt not only because college was increasing in cost but because students themselves are bearing a larger share of total College Costs compared to the parents or other sources. That means because people have less equity, less savings, those costs scott shifted somewhat may impact not only the student but the family aspirations them so small they bled prosper long term. Does this reflect not only benefits individual children but society as a whole . I am not a philosopher but i believe with your point the positive externalities of the educated population benefits all of us there is Empirical Literature to suggest that but we need to make sure people are able to be paid the student debt and does not replace other productive spending. Put another way, if colleagues of miss jones are looking at the challenge of debt to decide i cannot pursue a path with a debt equal to the mortgage believe me down because of the constant struggle, it not only in packs the individual that the future prosperity of our entire society of folks in our own generation cannot reach the fullness of their potential back to the economy . Behind all the facts and statistics is a broader question of the american and tradition of entrepreneurialism and risktaking and that they feel they cannot take those risks are start it that Small Business out of their ride your start a family. Is students are unable to purchase a home early in their life with the of major builder of guelph doesnt that amplify the inequality of wealth in our society . As i noted, there is a large gap in certain situations what those final outcomes may be for the retirement balance. Traditionally if theyre saving for retirement or with the home down payment and without those contributions theyll lose those compounding effects the student loan ability to do invest doors save those could be real. I just want to make that point. What i am most concerned about is the impact on aspirations i live in a workingclass community. What i am hearing is the feeling among Highschool Students there is not a path in which they have an opportunity to thrive for pursue their potential as to whether or not or how hard day of the work to make that pass possible. My concern here is this is the heart of the American Dream the full opportunity to thrive whether a child of a mechanic or a ceo given the huge hurdle of college debt is that compromising . The change of aspiration from the stories that were constantly submitted to Public Record illustrate many of the themes that weve just discussed. I do not want to interrupt but we do have the votes right now i will let you answer for the record. The senators next will be returning i will go vote and come back anybody at the end of the list come with me and come back. Thank you for hosting this hearing and for working hard to stick in there to work hard and like most people most of us to that have the capacity to turn to parents to say can i borrow 20 or 30 or fifth 5,000 . Millstone not in that saturation but fortunately for we in the 70s i would not have gone to college with my little 93 percent graduating class and i qualified for tuition free scholarship for four years in that got me to college. When i looked at the numbers the state of michigan is now one of the highest in the country to cut Higher Education over 32 percent universities and colleges and interestingly it has not increased. At about 19 is more than we would like to see but is a significant cut but what i find interesting is they have increased their tuition and twice as much as public universities. Twice as much. 57 of the forprofit School Graduates coming out with 30,000 more adept so there is a lot of things that we need to look at but i dont think we should say in the meantime all the rest of us have had that is to get the lowest Interest Rates but the good news for this refinancing bill like the bank bailout or other things , this is paid for. This is not adding to a deficit that we are proposing to ask a readytoeat chip in and pay your fair share to create a fair shot for everybody. It is fully paid for. But i just have to say i am so very surprised that your testimony. In terms to say we should reduce the federal role and we have too many graduates of our economy . While. But it did michigan it has said that at as a 1. 5 million jobs expected to be created alone 1 million of the 155 million will take Education Beyond High School where of the get the National Association of manufacturers of there 600,000 Jobs Available right now that we cannot match upscales not all of those are for your baby to year in terms of Community College but lets get the need with stem classs as were rigo as the economy i am amazed that you think we have too many graduates going into our economy and could you speak about that . Certainly. If you look at the bureau of labor statistics data, a people who are working with College Degrees in the United States today nearly half that the bls has characterized the jobs that do not require for your degrees. Of pessimistic has to be taken with a grain of salt and there are some judgment calls but the Unemployment Rate among College Graduates between 21 and 24 right out of college last year was above the overall u. S. Unemployment rate. And miss jones story riches compelling is one of someone who worked hard but she is making 10 and 30 an hour. This goes back to senator bidens bill that wants to bring more information to the students before they make the is wrong decisions there is a huge informations problem. We are out of time although i dont know who is running the hearing now. With vhs say that let me just say that we need less education. But thank you again and we will do whatever we can and to give you a fair shot. Thanks to the Committee Members and miss jones i appreciate your testimony. Let me read for the record something you have read Student Loan Debt has been the driving force of my decision for the last eight years of my life and according to my current repayment plan it is projected to be the next 35 years of my life that i would be planning for retirement. That is a powerful statement i would like to be listed in your class so somebody who wants to be a teacher as much as you to take on that much debt to achieve your dreams and somebody willing to move across the country to get a masters you will be one fantastic teacher. Thank you for your commitment but to focus all of the cost side, bringing down the cost of Higher Education eyes of for so many issues the ability to refinance but to focus of the cost issues we probably have done a disservice to students and their families to not lay out in a more clear fashion lowercost ways with the kind of skills or degrees that you need to succeed. One type of skill is not a College Degree but licensor professional credentials. The georgetown Workforce Center says 27 percent of Young Workers with licensor certificates earn more than those with bachelors degrees. It is not the you dont get education after high school but sometimes it is the american welding certificate and Cisco Systems administrator certificates. We coach and a council our young people but theres ways to get those credentials and not the same and most of our Financial Aid policies you cannot use military Tuition Assistance benefits 4,500 per year for active military you cannot use those benefits to pay a 300 certification exam . That is foolish. We have dual enrollment possibilities and more and more States Embrace the notion that while in high school should be able to get dual enrollment credits he cannot use the pill grant credit not currently to pay for College Credits the you can obtain for cheap costs and high school with dual enrollment. That is a cheaper way to get College Credit i could graduate in three years because of dual enrollment it was enormously helpful to my family they cannot afford the colleges i got into when i first applied when everybody else was celebrating they say if you have to go talk yourself into another way because it is too expensive. Also the ap credits. 2 2 programs miss jones a lot of people a lot of students today now are going for two years then going to the college than half the total cost shrinks but for them to do that somebody has to sit down as the path to get a for a year degree it is 25 or 30 cheaper if you start at the local Community College so what this tells me i am most concerned about the college cost issue there are a number of pathways for the credentials and certificates we have an obligation to give policies that dont discourage were treaty a secondclass educational professionals or certifications. Said lover like to ask in terms of the information in provision, dr. Vedder you have questions about the grading system i think that obscures more than they reveal with quality but providing information earlier in their life to make decisions, what more can we do at the federal level using the leverage of the investment that we make . One of the things we have noted it is also very difficult to even compute what the true cost of college is not only do a tune to which can change but also a challenge to project what your Monthly Payment will be when you take on a certain amount of debt this year. Just like in the Mortgage Market where Interest Rates might preset people are holding the dice with tools to assist but of course, that can be more to be done. The time is expired kindercare has come back. Thank you. Very good to testimony thanks to all three of you. Is seen as one of the things we have talked about that there are programs with the account based repayment that have the very low uptake rate. Is in one of the things we should do regardless about Interest Rates or refinancing which make available to borrowers at the beginning and end of their schooling . Senate that would have helped you to radically . Definitely would have helped in the beginning to know what i was getting into with my promise every notes i think in the beginning you are told this is what you need to get through college and if you use this you can deal with it after words but right now you will not encourage take a subsidized loans then take the unsubsidized and leave talk about that more with your exit counseling. But theyre walking away from the profession because they cannot afford the education they need. But they may have options they dont know. There are seven different rePayment Options is in that one thing we ought to do . With the simplicity of how to repay your lungs is a very important goal and i am also struck an recently heard from a former employee from a student loan servicer they are evaluated on how quickly they can get someone off the phone that calls them for help so that could lead to a quick interaction to be transferred andy you may get the short cut answer it is better for the owner and the borrower and the economy more broadly proposal directing those incentives. I enjoyed your testimony. In a former life i was the talk show host i interviewed a Financial Aid officer is and we talked about College Tuition and he said for the past 40 years the cost of a good private college is about the same as a new ford. In the 40s it was 1,000 then it went up in the 60s at 3,000 but something happened because and you for today is 20,000 and the cost of private colleges approaching 60. Queeney to explore why that happened. Have colleges, and and tell us why what they sell has increased tour three times the rate of inflation and what it is they are buying . Because we talk about the financing costs but the real underlying problem is the cost of the product. If tuition had risen at the rate of inflation me but not be having this hearing. So we have got to be focusing on that but i am concerned with accountability but i want to be sure to talk about Holding Schools accountable reapply standards such as ski and full employment and Graduation Rates that we dont penalize those institutions taking higher risks with lower in, and not college experienced students. Can you comment . We are not exploring that specific regulation. What i can say is a lightning the incentives between the schools that would ever loan programs and Financial Institution services we want to examine how it can increase accountability so it is approved for everybody. We all want to increase accountability but we have to be careful how we do it to an unfriendly penalize the students that we want to get into the system by placing requirements that would be a disincentive that is not the word, that would punish schools that take the risks to give those students in education. Fake you for your years of passion and commitment with this is timely right now. But were just getting smothered up to their eyeballs in debt and this has a huge effect on their ability to have a productive life that they want it takes a toll in the myriad of ways. Recently making a tour of College Campuses and a young woman came up to me and said i owe 50,000 what i want to do is have a family. But i am not convinced someone will marry me when i carry around that kind of debt. She tears up and we talked about options but that is representative. This takes the enormous toll to put people is shackles and this seems there are two kinds of pieces to the puzzle behalf to help the students ever under water. I appreciate what you have to say about that whether refinancing, i bolted to a variety of different approaches. The second to is a different issue to make sure that not only do we get students in the door but more value for their education. Senator rubio is senator warner and i have introduced introduced the legislation and so for the first time in would be possible for students to get this information in one place and have been forbidden and students and families find out about schools doing a good job job, Graduation Rates rates, remedial education, if one is doing a good job did they better clean up the act or Market Forces would it can or a tour of france the schools other doing a good job. With maya understanding to get the data read that you need to do this right will take that piece of legislation rather the bill and by the way others have bills it is close to gaf. Can we get the data that we need to set up this seamless opportunity . First of all, i am very pleased you have introduced this legislation and i have written on several occasions it is ironic the universities in the knowledge business are sometimes reticent to provide knowledge about their own students, what they are learning, earning after college but the irs could provide enormously useful information on the earnings of graduates by majors comment institutions without violating privacy or anything. Why dont we do that . The Social Security administration has the capacity to provide information. If it is to give financial burden shouldnt they know what is the probability they will earn a certain amount of money . Those bills are important important, lowcost, a consumer friendly, when there is more information and that efforts fail and others are making is one of the few positive developments right now. I want the senator to summarize because we will have the vote. I. M. Something of a privacy talk with them nsa so we have tried very hard to have a significantly privacy protections and my last request we would like to work with you and the other students we get this right to lock in the privacy of your generation deserves with repayment or whatever is necessary for those that are getting smothered because there is foot dragging and and they q i look forward to working with you. I appreciate you and all members here because this is an issue impacting so many it is one we have to address to work with all the views of they q for filling in today. Tanks were crushing peaceful democracy protests in Tiananmen Square on the other side of the world. The blessings of liberty must be renewed by every generation including our own. And this is the work to which we rededicate ourselves today. Our democracies must be defined not by what or who we are against but ive politics of inclusion and tolerance that welcomes all of 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 we have been reminded by russias aggression in ukraine our free nations cannot a complacent in pursuit of the vision we share. A europe that is whole and free and at peace. We have to work for that. We have to stand with those who seek freedom. [applause] the reason we are trying to focus on the speaker is because it is the speaker with the full majesty and weighing of his position yesterday made certain allegations which at this point at least he has not yet answered two. Would you prefer i will yield to you. You dont normally have that in the 26 hours that you present this case to the public but the interesting fact is the whole tenor of your remarks going back to 1970 and going back to 1972 taking out of context you were there for one and one purpose alone in my opinion and that was to imply that members of this site were unamerican and their activities. You stopped, you waited, when you responded you knew there was nobody there. You knew that there was nobody there. Cam scam. Put those two men from your perspective, give us your perspective on the two. Speaker oneill was really a giant. He knew the politics of the house. He knew the politics of the house and he kept much of it to himself if you would in terms of other members. He obviously received a great amount of intelligence all day long from members, what was going on in different places and he always believed that the politics was the art of the possible, that nobody got their way all the time and he was a broker within the Democratic Caucus and within the house. What you saw was Newt Gingrich who made a conscious decision that they would always be in the minority because they worked with the majority. So he started attacking bob michael, the leader and john rhodes and everybody on that side in his own party because he just said the only avenue to the majority is through confrontation and we are going to take them down and this was an argument about the misuse of tv now coming to the floor where he would ask these rhetorical questions and make these charges and the fact that the chamber was empty but at that time the camera was very tight on the speaker at the time wherever they were. The rule came to show that the chamber either had people or was empty and of course it changes the whole dynamics. But that was a process that now many years later has torn this institution apart and is really paralyzed the institution. First Lady Michelle obama is encouraging government officials to make a renewed commitment to end veteran homelessness. At the white house she was joined by hud secretary Shaun Donovan acting Veterans Affairs secretary sloan gibson and the mayor of Salt Lake City. Secretary Shaun Donovan acting secretary sloan gibson mayor ralph becker, laura silent or and Chris Fuentes. [applause] thank you so much for inviting me to participate in the White House Forum on veterans homelessness. I would like to take his opportunity to thank first Lady Michelle obama for her devotion and dedication and assisting his effort to house our veterans as well as the overall efforts, hard work and outreach she has undertaken on behalf of all veterans and their families. In our society every veteran and every individual should have a home. I am here representing Salt Lake City which of course im proud to do but when i consider how Salt Lake City and our region has approached and addressed homelessness and particularly veterans homelessness i know that im representing dozens of dedicated selfless people and organizations that for decades have focused on providing housing for our homeless friends. The big difference between what we have been doing to meet the goal of eliminating homelessness in Salt Lake City by 2016 where 75 the way there and a Great Success for our valued veterans has been the Additional Resources of the va and hud brought to the table to join us in a singular effort to and veterans homelessness. They brought increased dollars, increase staffing capacity and the same valued approach to partnerships that we have developed in Salt Lake City. Let me tell you the story of one man i met recently. As a young man stacy worked in a high explosive unit in the u. S. Military. After returning from the military however he spent roughly 15 years homeless in Salt Lake City battling depression and diabetes. For the last three years both he and his wife marilyn also a diabetic sought refuge at a local shelter but without an insulin refrigerator and regular Health Care Managing their common condition was a challenge. This past month stacy and marilyn and their dog buddy moved into a permanent home of their own. Stacy said our apartment is like a safe haven. Sometimes i feel like i am dreaming. To the Obama Administration and secretary donovan into the va i salute and thank you. When we can all combine their resources and Work Together, amazing results happen. We have much to do so i dont want to leave the impression that we in Salt Lake City feel like we have completed our task. We are committed to ending homelessness among all members of our community. With the success to date with our veterans the way and means are proven. Thank you for giving me on behalf of the many dedicated people in our community an opportunity to be with you here today. [applause] now it is my great pleasure to introduce the gentleman named as the acting secretary of the Veterans Administration by president obama on friday. Acting secretary gibson has devoted his life to serving our country and our veterans. He graduated from west point and served in the infantry and most recently he was the president and ceo of the uso. Acting secretary gibson has 20 years of private sector and nonprofit experience that he brings to bear to build a 21st century va. Please welcome acting secretary of the Veterans Administration, sloan gibson. [applause] thank you mr. Mayor. Ending veteran homelessness is one of vas three agency priorities. Under the circumstances i would remiss if i did mention one other goal that we have and thats improving veteran access to va care and service. [applause] as the president has directed we are moving immediately to get veterans off of weightless in the two clinics. We are taking action to fix the systemic actions that allow these unacceptable waits to occur. We demonstrate in the past our ability to tackle tough challenges. We have automated claims processing cleared have the backlog and on our way to elmo emanating veteran homelessness. With that last tough challenge we cant do on our own. Its a challenge that requires close collaboration among federal state and local governments and Community Groups va and hud may have resources that we depend on over 4000 partners to extend services to Homeless Veterans. Last year thanks to those partners more than 45 tausan veterans and family members were housed using more than 60,000 were saved from addiction thanks saved from eviction things to be a Supportive Services for veteran families. And more than 45,000 veterans found temporary housing through vas grant and per diem program all thanks to the collaborative relationship between public and private enterprise across our country. We have got a winning strategy. Its the Housing First approach. Get veterans into permanent housing, then meet the clinical and other needs. The result is that we are not just getting veterans off the streets, we are Healing Minds and bodies and we are making better use of resources which means we can help that many more veterans. The emergency room visits are down 27 . Inpatient hospitalization is down 33 . Health care costs down 32 . Housing first works and we know that it works best when we have a close collaborative relationship with their partners and cities counties Community Groups and local va health facilities. That is why we need local leadership. Leaders on the ground in every city that take charge that marshall available resources that help forge the necessary connections among the many partners required to make all this work. We have ruben we can reduce veteran homelessness and now lets end it. [applause] a special thanks to the first lady for supporting this effort and as i can tell you from my own personal experience from supporting so many other efforts for veterans and servicemembers and military families thanks to all of you for taking up the challenge. We are depending on you and much more importantly our veterans are depending on you. Now its my pleasure to introduce our leading federal partner this years chair of the Interagency Council and homelessness hud secretary Shaun Donovan. Yankee. [applause] thank you. Thank you. Thanks so much. [applause] thank you so much acting secretary gibson thank you for that kind introduction and much more portly thank you for your service to this country and for the work is ahead of us together to house every veteran in this country. [applause] i look around the room and i see so many mayors who have become not just partners but Close Friends over these years in this battle to end homelessness. You have been our warriors, you have been our partners. Thank you for your incredible commitment to this work. Lets give our mayors around of applause. [applause] and to every other distinguished guests and friend that is here today for the past four years i want to tell you it has been my great honor to help advance the goals of president obamas historic Opening Doors initiative. This is the nations First Comprehensive strategy to prevent and end homelessness. Its an effort that reflects our countrys most basic ideals and values. Every person deserves a fair chance to thrive, that we all benefit when their neighbors in need can lift themselves up. And that her country can actually solve big challenges when we are committed and when we Work Together. Over the years we have proven that we can house anyone. Now our charge is to house everyone and at the heart of this work is helping our nations veterans. These brave men and women have given so much of themselves to protect our lives, our liberty and its only right that we give back to them and Opening Doors is doing just that. Through the u. S. Interagency council and homelessness, 19 federal agencies, 19 federal agencies have come together working with all of our local partners and we are collaborating like never before to enhance our efforts. We are using the data differ in in driven approach at the national and global to maximize it that goodness. I drive my team crazy going through them numbers every month. We work closely with va and partners and we have embraced the approaches that work like Housing First that are particularly effective for chronic homelessness. As the first lady is about to highlight we have made tremendous progress and local leaders like you have been instrumental. We have got to keep this momentum going. That is why im i am so excited to be here today with all of you together we can give our nations veterans not just shelter and support but also new hope for the future. I remember visiting the veteran recently who we helped secure housing. He was sitting in the first apartment he had lived in 20 years. He told me when he first walked into that apartment he got on his knees and he said i now can live like a human being. He said my future is brighter. Every veteran deserves the chance to feel that same way and hud looks forward to working with all of you to give our veterans that chance to ensure that every man and woman who has served this country as a place to call home. Thank you for your support. Thank you for your partnership. Thank you. [applause] [applause] i now have the great pleasure of introducing Chris Fuentes an american who has served his country with distinction in iraq after returning home she had her struggles but she didnt stay down. In fact after receiving a little bit of help from federal program she was able to lift yourself up and is now doing incredibly well she is here today to share her story so please welcome Chris Fuentes. [applause] [applause] the thank you so much for allowing me this opportunity to share my story. My name is Chris Fuentes and im 25 years old. I have a daughter named milo who is three years old and i live in philadelphia. I was in Operation Iraqi freedom after my reserve unit was called into active service in iraq. When i returned from active duty by apartment and job are gone. At one point i found myself living in a car while my daughter stayed with my mother. I was all over the place jumping from place to place and had no stability. This really preventing me from moving forward. I knew if only i could have a roof over my head Everything Else would fall into place. Another veteran told me about the head hud program and said i did not have to be living with this. I didnt believe it at first but i went to the va in philadelphia to try. They took my application and eventually the case manager called me in told me always accepted. On the day i found out i was approved i cried. It felt like a big weight was lifted off my shoulders. My case manager suggested i apply for another program that helps veterans and their families. They help me to locate an apartment and gave me the Security Deposit and rent i needed to move in. They also help me with the furniture for the apartment and helped fix my car so i could get to school. And when i moved in i was able to reunite with my daughter. Today thanks to these programs we have a home again. Im still in the reserves and im going to school on the g. I. Bill. I think its very important to spread the word. About these great programs. Im going to take every chance i have two tell other veterans that they can get help from these programs just like i did. These programs give veterans a Second Chance at life and allows them the opportunity to not worry about where they might have to lay their head at night. And now its my pleasure to introduce someone who has shown her commitment to families like mine again and again. Together with dr. Joe biden she launched the joining forces initiative to rally americas businesses, schools, hospitals and communities to reach out to honor and serve our troops, veterans and military families. Not just in words but with real concrete action. Ladies and gentlemen please join me in welcoming first Lady Michelle obama. [applause] [applause] thank you so much everybody. Thank you all. Rest yourselves. Thank you so much. This is a good news day and i am honored to welcome everyone here to the white house. I want to start by thanking chris. Lets give chris a round of applause. [applause] you know i look at chris and i go she is a baby. She served our country and she is a baby. Chris is also the face of veterans and the face of homelessness which is why today is so important and we are grateful that she could be here to share her story. We are proud of you christen everything you were going to do because we know you are going to keep contributing. I also want to thank secretary donovan for his tremendous leadership at hud as well as mayor leon castro who we are confident will continue to build on the progress that we have been making. I also want to thank acting secretary sloan gibson. Sloan and i have done really could Work Together and im so happy he is joining us and is going to keep doing great work and we are grateful for his distinguished service to our country for so many years as well as mayor becker for doing such phenomenal work in Salt Lake City. I also want to recognize someone who doesnt get a lot of attention and that is laura zeit and are. Yes. [applause] today is the first day i got to meet laura but her reputation precedes her. She is the executive director of the Interagency Council on homelessness so for many of the advancements we have made its been because of the council of work to streamline and coordinate our efforts across agencies rate i want to thank laura and everyone from the council for their outstanding leadership and service. Most of all i want to thank all of you here today. Our guest, our mayors, are Community Leaders the county and city federal employees who work day in and day out to repay our debt to our veterans. Unfortunately homelessness among our vet turns is an issue we are all too familiar with. Sometimes we see these folks on our way to work or when we are watching our kids home from school. We might pass them, someone as we are strolling through the park sitting on a ranch and not even realize that he or she is a veteran. Maybe we say hello or offer to buy a sandwich but often we keep on going rushing off to the next meeting burying our heads in to our smartphones. Its not that we dont care. Its just that we think while there is no way we will ever solve this problem. Thats just the way things go. But that kind of thinking starts to melt away when we better understand the stories of these veterans. The man who lost his arm in vietnam and when he and his wifes medical bills kept piling up they lost their home. The gulf war vet who injured her back and lost her job and then her house and spent months on the streets. The army veteran from the iraq war who survived cancer but when she entered two kids were evicted from their home they had nowhere to go. These are just three stories. Altogether roughly 58,000 veterans are experiencing homelessness in america today. A number that fortunately has fallen sharply in the past few years but whatever the number these brave men and women have served this country with courage and grace. Some volunteer to serve and many others were drafted. They went off to faraway jungles and deserts and mountain regions they saw their best friends fall in ambush because of a suicide bomb. Some of them were left wondering why they were the ones that survived. After all that many of them have come home only to fighting the battle, the battle to keep a roof over their head, a battle just to have somewhere to go when it rains. Now i want to be very clear, the vast majority of our veterans return home in good health and good spirits. They go on to build good families and find good jobs. They keep serving this nation in their communities through their congregations in schools and neighborhoods. In fact the percentage of veterans that are homeless is 3 of the total veteran population but even one homeless veteran is a shame. [applause] and the fact that we have 58 dollars and is a moral outrage. We should all be horrified. [applause] tens of thousands of veterans who have risked their lives for our country are sleeping in their cars or in a shelter or next to a subway vent. We should be horrified because that is not who we are as americans. And so we cant just throw up our hands and say that this goblin is too big for us because the truth is its not. When you break down the numbers you see that those 58 thousand Homeless Veterans are spread out across all of our cities and states so even in some of our largest metropolitan areas where often only talking about a few hundred people. For example as of the year and a half ago new orleans had a total of 211 Homeless Veterans and they have been driving that number down ever since. In indianapolis the most recent count of thats still on the streets was 11. These numbers are still too high because any number above zero is too much and that is why as president my husband vowed to end this problem once and for all. Absolutely. [applause] and he has directed record levels of funding toward helping Homeless Veterans achieving Historic Success and getting our men and women in uniform into housing. Almost 90 of todays Homeless Veterans served before 9 11 that this is the first time anyone has made this a governmentwide priority. We have got hud and va and the Interagency Council leading the way and we are we are also working with the department of health and human services, the department of labor and nonprofits and Community Leaders on the ground. We have cut through red tape and streamlined efforts across agencies and together we have made some extraordinary progress. For instance chris told you about those housing vouchers from hud in the va that helps her find a home. That program has existed since the early 90s and up until 2008 it had housed a total of 1800 veterans