[Congressional Record Volume 141, Number 142 (Wednesday, September 13, 1995)]
[House]
[Pages H8892-H8893]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                 FEDERAL ASSISTANCE WITH STUDENT LOANS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from California [Mr. McKeon] is recognized for 5 minutes.
  Mr. McKEON. Mr. Speaker, if the gentleman would like to continue 
this, what the program is, any student can have a loan and the 
Government will subsidize their interest while they are 

[[Page H 8893]]
in school. Then when they graduate, if they do not go on to graduate 
school, or, if they do, they have a 6-month period where they do not 
have to repay the loan. Then they begin repaying the loan. They have 10 
years to do that. During that 6-month period, their interest at current 
law is also subsidized. If they go on to graduate school they can 
continue to borrow money and also receive an interest subsidy.

                              {time}  2115

  The undergraduate and the graduate subsidy will not be touched. What 
we are talking about is eliminating, as part of this, about a third of 
it, the interest subsidy for the 6-month period. And what that works 
out to be is a student that over the next 4 years borrows the maximum, 
little over $17,000, when they do begin repaying it, the maximum that 
that could be is about $9 a month. And we feel that that is fair, from 
$4 to $9 a month; we think that is a fair return considering that there 
are a lot of young people that are not able to go to school and their 
taxes are helping to subsidize those that do.
  Does that kind of answer that?
  Mr. WISE. Mr. Speaker, if the gentleman will yield, I would be 
delighted tomorrow to look at the statistics. I am just surprised, $3.5 
billion sounds like a lot coming out of just ending the deferral for 
the 6-month period. That sounds like a large amount of savings being 
scored to that. But I am not going to contest that.
  Mr. McKEON. The numbers are there.
  Mr. WISE. Is that a CBO scoring?
  Mr. McKEON. Yes. That is over a 7-year period. And that gets us to 
the $10 billion that we need to save.
  I think what we really need to keep sight of is to stick with the 
facts. That is really important. I think they are bad enough as they 
are. There are going to be cuts, but we do not need to scare people 
needlessly.
  The other night when I heard the President talking, again saying that 
we were eliminating the subsidy for students, it is just not so. I 
think really for the office of the President, he really should stick 
with the facts. He has enough to talk about on his side of the issue 
without distorting the facts.
  Mr. WISE. Has this been reported from the Committee on Economic and 
Educational Opportunities?
  Mr. McKEON. We held a news conference on July 27 and indicated that 
we would not be going after the in-school subsidy or the graduate 
school subsidy. So that information has been out over 1 month. The 
Presdient certainly should have it. I can get you a copy of this 
tonight.
  Mr. WISE. On Pell grants, the chairman had said this would be the 
highest number ever. I
 understand that the level of the dollar amount to an individual will 
be the highest ever. I have understood that.

  Mr. McKEON. We raised it $100 per individual.
  Mr. WISE. But that some individuals will not be, while we have got 
individuals able to get a higher level of Pell grant, there will not be 
as many individuals able to qualify for the Pell grant; is that true?
  Mr. McKEON. No. What it is is we raised the lower limit so those who 
were borrowing a very small amount, up to $600, not as many of them 
would be able to borrow. We went to the higher amount so that those who 
were the neediest could get the full amount.
  This has been, I think, healthy to have a discussion. There is a lot 
that we can talk about just on the actual merits of what the real 
numbers are.
  I think that the purpose of this whole debate is, I am new here in 
Congress. I have been here now, this is just starting my second term. 
It has been a real education to me. I came out of private industry. I 
was a businessman. I really did not know how the Federal budget worked 
or what the process was. I am still learning, every day I am learning.
  But the big thing I have learned is that we have a debt of almost $5 
trillion. And these young people in school and their children and their 
grandchildren are going to be paying this debt. It used to be, when I 
was a young person, our parents worked all their lives to pay off the 
mortgage and then leave the farm to the children. And now it seems like 
what we are doing is spending our entire lives mortgaging the farm and 
the Government takes the farm and the children are left with the debt. 
We need to turn that around.
  This is just one of the things that we are looking at to save a 
little money. I think as we spread this across the board, spread the 
pain of arriving at this balanced budget over a 7-year period, we will 
all benefit.


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