[Congressional Record Volume 141, Number 141 (Tuesday, September 12, 1995)]
[House]
[Pages H8781-H8782]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       CONSEQUENCES OF THE REPUBLICAN'S FUNDING CUTS ON EDUCATION

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New Jersey [Mr. Pallone] is recognized for 5 minutes.
  Mr. PALLONE. Mr. Speaker, I am here tonight because I think it is 
imperative that the American public in general and the people of New 
Jersey specifically, understand the details and consequences of the 
Republican's plan to slash funding for Federal student assistance 
programs. Indeed, while I support efforts to balance the Federal 
budget, I believe attempting to do so by restricting the average 
citizen's access to institutions of higher education is unequivocally a 
step in the wrong direction.
  I have to day, Mr. Speaker, that I am perplexed at the logic behind 
the cuts the Republicans have already approved. Like so many of my 
colleagues on both sides of the aisle, I benefited from student 
assistance programs when I was in college. But unlike my Republican 
colleagues, I think it is grossly unfair for my generation to call for 
an end to student assistance programs after we used them to get to 
where we are today.
  Mr. Speaker, I would like to use Rutgers University as an example of 
the negative impact of the Republican proposals. As a former student of 
Rutgers Law School who now represents the main campus of Rutgers 
University in Congress, I am deeply troubled about the impact these 
cuts will have on the 6,500 plus low-income and middle-class New Jersey 
students who used them to secure a Rutgers education.
  As part of the 1996 Education appropriations bill, Republicans have 
eliminated all capital contributions for Perkins loans, which are 
designed to specifically assist low-income students and received $158 
million in fiscal year 1995. If finalized, such a cut would have a 
dramatic impact on the more than 3,100 low-income Rutgers students who 
are provided with nearly $5 million in Perkins loans this year.
  The bill also attacks Pell grants, limiting the maximum award to 
$2,400 and eliminating assistance to students who qualify for grants of 
less than $600. This cut would prevent some 7,000 students at Rutgers, 
and
 some 360,000 of their cohorts at universities across the Nation, from 
receiving Federal education assistance.

  The Republican assault on education, moreover, is hardly contained 
entirely within the fiscal year 1996 appropriations bill. Looming on 
the horizon is an attack on the interest subsidy on Federal direct 
subsidized Stafford loans as part of the reconciliation bill. One 
scenario is a complete elimination of the interest subsidy for graduate 
students. But with a targeted student loan reduction of a staggering 
$10.2 billion over 7 years, it seems likely the Republicans will not 
reach their goal without raiding undergraduate Stafford loans as well.
  Elimination of this Federal subsidy could increase the average 
undergraduate student's indebtedness by as much as 20 or even 30 
percent. For those who wish to go on to graduate schools, the increase 
could be as much as 40 percent with monthly payments on a 10-year plan 
rising to a whopping $753 per graduate student.
  With the Department of Education projecting that 89 percent of the 
jobs being created in the United States will require post-secondary 
training, the Republican inclusion of student assistance programs in 
the fiscal year 1996 budget belies their claim that the legislation is 
what's best for the American economy. Attempting to foster economic 
growth by limiting the very means which serves as its engine is, pure 
and simple, bad public policy.
  Mr. Speaker, the Federal Government recently began experimenting with 
a direct university loan program instead of the traditional bank loan 
subsidized with Federal dollars.
  In addition to the upcoming dissection of Federal interest subsidies, 
there is also likely to be a Republican attempt to terminate the direct 
loan program where the university is substituted for a bank lender. 
This approach to dispersing student loans not only saves the taxpayers 
billions of dollars, but cuts through redtape at a much more rapid pace 
than the old bank system, thereby allowing schools to process more 
applications in a shorter time period. In its first year of 
implementation at Rutgers, the direct loan program enabled the schools' 
financial aid
 office to process loans for 15,295 students with term bills being 
credited to their accounts immediately by the week those term bills 
were due. The year before the implementation of direct funding, the 
schools' financial aid office processed only 3,283 loans during the 
same period.

  This expedited process made excess funds available earlier for over 
12,000 Rutgers students, and thousands on campuses across the country, 
facilitating their ability to buy books, pay rent, and keep on top of 
other school related expenses.

[[Page H 8782]]

  Thus, as the issues I outlined illustrate, the Republican attack on 
education moves higher education closer to being yet another Republican 
designed luxury for the wealthy. I think I speak for all of us when I 
say that our presence here tonight should be mistaken for nothing less 
than our determination to prevent access to higher education from 
moving out of the realm of Government priorities and into the realm of 
privileges for the few.
  Mr. Speaker, those of us who benefited from student loan programs, 
those of us who were able to get an education, undergraduate, graduate, 
or professional school, realize how important it is to have these 
Government programs. It is very unfair for those of us who are now in 
Congress to be advocating these student loan programs or grant 
assistance programs should be terminated or cut back, particularly at a 
time when this country faces such competition from abroad and we know 
that higher education is a very valuable tool for those who want to go 
out and be successful and get a job in this very competitive world.


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