[Congressional Record Volume 141, Number 113 (Thursday, July 13, 1995)]
[Extensions of Remarks]
[Pages E1430-E1431]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


         THE PELL GRANT STUDENT/TAXPAYER PROTECTION ACT OF 1995

                                 ______


                           HON. MARGE ROUKEMA

                             of new jersey

                    in the house of representatives

                         Thursday, July 13, 1995
  Mrs. ROUKEMA. Mr. Speaker, I am pleased today to introduce the Pell 
Grant Student/Taxpayer Protection Act of 1995. This legislation would 
prevent a postsecondary school from participating in the Pell Grant 
Program if that school is already ineligible to participate in the 
federally guaranteed student loan program. Plain and simple, this 
legislation will make sure that if you have high default rates, then 
you should not receive any title IV higher education funding period.
  This is a critical time for our country. Congress is trying to save 
taxpayer dollars while improving the quality of post-secondary 
education that is available to all Americans. We took strong steps 
forward in achieving this in 1992 when we reauthorized the Higher 
Education Act with nearly 100 sorely needed reforms that were good for 
students and good for taxpayers.
  Reforms such as the 3 year 25 percent cohort default rate were 
intended to put an end to risk-free Federal subsidies for those 
unscrupulous, for-profit trade schools who promise students a good 
education that leads to a good job and then fail to deliver on that 
promise--at the expense of both students and the taxpayer. If these 
schools violated these rules, then they would be bounced from the 
program.
  We have already determined that schools with unacceptably high 
student loan default rates should not be permitted to participate in 
the federally guaranteed student loan program. I submit that if a 
school is deemed ineligible to participate in the federally guaranteed 
student loan program, then it should also not be permitted to 
participate in the Pell Grant Program. While the House passed modified 
language addressing this concern in 1992, it was mysteriously dropped 
in conference. So, we are back here today discussing the one that got 
away.
  If we could find a way to pay for an increase in title IV student aid 
programs, there would be a very few Members, if any, who would not be 
supportive. But, faced with a $4.7 trillion debt and annual deficits 
exceeding $200 billion, we do not have that luxury. However, today we 
have an opportunity to stretch our Pell Grant funds by disqualifying 
those schools that we have already disqualified from the federally 
guaranteed student loan program.
  Today, the Senate Governmental Affairs Permanent Subcommittee on 
Investigations will be holding a hearing to examine the abuse of the 
Pell Grant Program by proprietary schools. In particular, the 
subcommittee will examine the case of a California-based trade school 
chain that allegedly stole millions in Pell Grant money, failed to 
reimburse loans, and filed false loan applications.
  The title IV student aid program currently serves 2,487 proprietary 
schools, and proprietary schools represent 41 percent of all Pell Grant 
recipients. And, despite corrective actions taken through the 1992 
Higher Education Amendments to prevent fraud and abuse of the Federal 
student aid program, this hearing only confirms that similar problems 
still persist, 

[[Page E 1431]]
and that much more needs to be done to stop them.
  I urge my colleagues to support this critical legislation. Make our 
Pell Grant money go farther. Throw the scam schools out of the Pell 
program. Protect the taxpayer. Cosponsor the Pell Grant Student/
Taxpayer Protection Act of 1995.


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