[Congressional Record Volume 141, Number 9 (Tuesday, January 17, 1995)]
[Extensions of Remarks]
[Pages E102-E103]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


    INTRODUCTION OF THE STUDENT LOAN EVALUATION AND STABILIZATION ACT

                                 ______


                        HON. WILLIAM F. GOODLING

                            of pennsylvania

                    in the house of representatives

                        Tuesday, January 17, 1995
  Mr. GOODLING. Mr. Speaker, today I am joining with several of my 
distinguished colleagues in the introduction of the Student Loan 
Evaluation and Stabilization Act--legislation that will allow a 
systematic review and evaluation of the current student loan programs. 
Specifically, this legislation will allow for the careful evaluation 
and comparison of the Federal Family Education Loan Program and the 
Federal Direct Student Loan Program to a true pilot status and allowing 
both programs to operate with continued stability for several years. 
Once this is accomplished, an independent evaluation can be made about 
whether the direct loan program serves students and institutions 
effectively, and whether the Federal Government can manage--and pay 
for--the multibillion-dollar student loan program which is so important 
to assuring access to higher education for millions of Americans.
  Through the reconciliation process, the 103d Congress made policy 
considerations and decisions affecting the student loan programs 
without the benefit of a true evaluation of the long-term cost and 
effect. The impetus for the move to establish a direct Government 
lending program was projected budgetary savings of $4.3 billion over 5 
years. When pressed, however, the Congressional Budget Office revealed 
that when the administrative costs associated with a direct 
determination, almost one-half of the savings disappear. Rudolph 
Penner, former Director of the Congressional Budget Office in testimony 
before the Budget Committees of the U.S. House of Representatives and 
U.S. Senate on January 10, 1995, identified this particular aspect of 
scoring a direct Government lending program as one of the arbitrary 
measures currently found in the Credit Reform Act which creates a 
strong bias in favor of using direct loans instead of guarantees.
  While the Clinton administration was talking about promoting new 
public/private sector partnerships, they moved forward with their 
[[Page E103]] proposal to dismantle one of the most successful of such 
partnerships. Participation of the private sector in the student loan 
program was summarily dismissed as being unnecessary and too costly. 
Notwithstanding the poor administrative record of the Government in the 
direct lending business, the belief that direct Government lending 
would lead to major improvements and lower costs in the student loan 
program was the overriding theme.
  However, with the advent of the new Congress, we have determined that 
a careful comparison of programs for efficiency and cost effectiveness 
needs to be undertaken before decisions to totally replace one program 
with another can be made with any degree of confidence. We believe this 
to be particularly true when dealing with a loan program projected to 
be in the magnitude of $30 billion by 1998.
  The legislation we are introducing today is designed to stabilize the 
current student loan programs, limit the loan volume in the Direct Loan 
Program to those institutions which have elected to participate in the 
first 2 years, continue the improvements which have already been 
initiated, and increase and enhance the congressional oversight of 
these particular programs. We pledge that the Congress will thoroughly 
evaluate the quality, effectiveness, efficiency and costs associated 
with these programs so that Members of this body are able to make 
informed decisions about what works for students, institutions and 
American taxpayers.
  Specifically, this bill will allow for: First, the continued 
implementation of the Federal Direct Student Loan Program; second, the 
continued stability of the Federal Family Education Loan Program; 
third, reduced expenditures on the part of the Department of Education; 
fourth, improved Congressional oversight of expenditures; fifth, ease 
in the application process for all students; and sixth, a revision to 
the Congressional Budget Act which will provide truth in budget scoring 
when determining costs associated with a guaranteed loan program and a 
direct Government lending program. I believe these are all important 
steps that this Congress needs to take in order to compare and evaluate 
programs while continuing to support our country's students in the 
pursuit of their education goals.
  I want to express my pleasure at having the opportunity to work with 
Buck McKeon, the new chairman of the Subcommittee on Postsecondary 
Education, Training and Life-Long Learning, as he and the other 
subcommittee members tackle the important issues facing the 104th 
Congress in the areas of education and workplace policy.
  I also want to express my gratitude to Bart Gordon and my other 
Democratic colleagues who have helped to create this bipartisan effort 
and who share my concerns about integrity and accountability in the 
student aid programs. This bipartisan group has steadfastly voiced 
concerns with respect to this untested, expansive direct Government 
lending program and its long-term implications.


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