Mr. President, I would like to tell you about Connie Martin from Sycamore, IL. Connie's son decided to go to culinary school in Chicago 5 years ago at the age of 25. To pay for tuition, he borrowed $58,000 in private loans from Sallie Mae at 18 percent interest. His first payment was $1,100 a month--his entire monthly salary at a downtown eatery where he worked after graduation. His loan balance, including government-backed loans, is now $100,000. Connie's son has been working hard, and she and her husband have been trying to help him make the payments. I worry for borrowers like Connie's son who can't start over and will have debt that will likely haunt him for the rest of his life.

   The Chicago Sun-Times recently ran a story that described the devastating effect large student loan debt has on the lives of borrowers. Mr. President, I ask unanimous consent that the following article from the Chicago Sun-Times be inserted for the Record.

   Private student loans are the fastest growing and most profitable sector of the student loan industry. As college tuition continues to rise, the private loan market flourishes. According to the College Board, tuition, fees, room and board at public 4-year schools have risen by 42 percent over the past 5 years from $9,032 to $12,796. Add books, supplies, transportation and other living expenses, and the total increases to $16,357 for those paying instate tuition and $26,304 for those paying out-of-state tuition. Students rely on private loans to pay for any unmet need that Federal loans and grants fail to cover. According to the College Board, since 2001 the market for private student loans has grown at an annual rate of 27 percent to $17.3 billion in 2006--roughly 20 percent of total student borrowing. Ten years ago, only 5 percent of total education loan volume was in private loans.

   Private student loans are more profitable than Federal student loans because lenders can charge whatever interest rate students will pay, barring State usury laws. The interest rates and fees on private loans can be as onerous as credit cards. There are reports of private loans with interest rates of at least 15 percent and often much higher. Unlike Federal student loans, there is no government-imposed loan limit on private loans and no regulation over the terms and cost of these loans.

   Today, I am pleased to introduce a bill that will give students, who find themselves in dire financial straits, a chance at a new beginning. My bill takes the bankruptcy law, as it pertains to private student loans, back to where it was before the law was amended in 2005. Under this legislation, privately issued student loans will once again be dischargeable in bankruptcy. My bill also clarifies that existing protections are specific to loans that were issued by or are guaranteed by State and Federal Government.

   Federally issued or guaranteed student loans have been protected during personal bankruptcy since 1978. This provision protects Federal investments in higher education. In 2005, a provision was added to law to protect the investments of private lenders participating in the student loan industry. This change in the law creates a couple of problems. First, extending protections to private lenders of student loans but not to other potential creditors who are at risk in a bankruptcy disposition is inherently unfair.  Second, such protections are unfair to the debtor. Repayment schedules--with accumulating interest--can extend for decades.

   With the 2005 protections in place, there is essentially no risk to lenders making high-cost private loans to people who may not be able to afford them. There is no risk to private lenders extending credit to students at schools with low graduation rates and even lower job placement rates.

   Giving private loans such high status in bankruptcy also puts other creditors at a significant disadvantage. No one seems to know how or why private student loans gained this status in 2005. There is nothing in the Congressional Record explaining the reasons behind the change. Why should a private student loan lender be able to jump to the front of the creditor line--in front of the local furniture store or the neighborhood plumber? This bill seeks to restore treatment of privately issued student loans in bankruptcy to the same treatment as any other debt.

   There is justification for making Federal loans hard to discharge: they are backed by taxpayer dollars, and they come with some borrower protections in cases of economic hardship, unemployment, death and disability. However, private loans involve only private profit and do not have the protections that government borrowers enjoy, including caps on interest rates, flexible repayment options, and limited  cancellation rights. Why should student borrowers, who are trying to better themselves and our country, be treated in the same manner as people trying to escape child support payments, alimony, overdue taxes, and criminal fines?

   The 1950s and 1960s saw the democratization of higher education. The GI Bill provided money for returning WWII veterans to attend college. The National Defense Education Act made college a possibility by making low-interest education loans available for countless students all across the country. Talented kids from working families began realizing the possibility of college, and enrollment at colleges swelled. But since then, college costs have gone through the roof. And students--heeding the call to obtain a good education--are also earning themselves years of debt. The average student is graduating with nearly $20,000 in debt and in many cases--much, much more--just look at Connie Martin's son. Our country has made great strides in making college a reality for countless students. Let's not reverse the positive trend we started over 50 years ago. That is why I am introducing this bill--to give students a chance at a fresh start.