[Congressional Record Volume 141, Number 143 (Thursday, September 14, 1995)]
[Senate]
[Pages S13577-S13578]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 BUDGET RECONCILIATION AND STUDENT AID

  Mr. PELL. Mr. President, very soon the Senate Labor Committee will 
convene to consider how to meet the reconciliation instructions 
contained in the budget resolution approved earlier this year. It will 
mark the seventh set of reconciliation instructions sent to the Labor 
Committee since 1981.
  The major entitlement program within the jurisdiction of the Labor 
Committee is the Stafford Student Loan Program. As a result, it has 
been the primary target in each and every reconciliation. Over the 
course of the past 14 years, in reconciliation and related deficit 
control measures, we have made almost 50 major changes in the loan 
program. Some are prudent and defensible; others were not.
  While I have played an active role in meeting each of these 
instructions, I have done so with deep reservations. The primary motive 
in reconciliation is to save money. Unfortunately, determining whether 
or not the change has merit and constitutes good public policy has all 
too often been lost.
  As I have indicated, some of the changes we have made under the 
pressures of reconciliation have been good; some have not. In 1981, for 
example, we imposed a 5-percent origination fee on all loans. Thus, a 
student who applied for a $2,000 loan would get only $1,900 but would 
have to repay the loan as if he or she had received the full $2,000. 
This was intended to be a temporary measure to save money; it became 
permanent and deserving students were the losers.
  In 1987, we required State guarantee agencies to return to the 
Federal Government some $250 million in so-called excess reserves. The 
provision did not produce the expected savings, and it had the very 
adverse effect of endangering the stability and the very existence of 
many agencies. It proved to be an unwise and unfortunate move.
  In 1993, in a dramatic departure from the previous reconciliation 
efforts, we took action that actually helped students. In particular, 
the competition between the new direct student loan program and the 
Stafford Loan Program already in place had given students improved 
services, better rates, lower fees and greater benefits. It would, in 
my judgment, be a shame to disturb that balance.
  Earlier this year, we considered the budget resolution that would 
have required almost $14 billion in student loan cuts over the next 7 
years. We brought that down to $4.4 billion, with the passage of the 
Snowe-Simon amendment, which I supported. On final passage, however, I 
voted against the resolution. I did so because one of my concerns was 
that it would produce dramatic reductions in a series of very important 
Federal programs, not the least of which was the loan program.
  When the budget resolution came back to the Senate after conference 
with the House, most of the gains we made with respect to the Stafford 
Loan Program were lost. We were confronted with having to come up with 
more than $10 billion in savings in the loan program. As a result, I 
know that I for one voted against the conference report. I did so 
because I believed its passage meant we would make a series of unwise 
and unreasonable cuts in the loan program.
  Over the past six reconciliations, everyone has been hit. Lenders, 
guarantors, secondary markets, and students--particularly students--
have felt the budgetary knife. No one has been immune. All have 
sacrificed.
  And soon, the loan program will go back to the operating table once 
again to require cuts so large that everyone will be subject to the 
knife.
  I have already gone on record opposing any cuts that will affect 
students. In particular, I oppose any change in the in-school interest 
subsidy and any change that might be passed on to students. Students 
are already hard pressed to make ends meet as they pay for a college 
education. We should not make that situation worse, either while they 
are in school or as they repay their loans after graduation.
  At the same time, I am also concerned that additional cuts among 

[[Page S 13578]]
  lenders, guarantors, secondary markets, and other program participants 
could threaten the very stability and the very viability of the entire 
loan program. Adverse changes could well threaten student access to the 
loans they need and must have.
  Further, I believe we should keep the agreement we reached in 
conference 2 years ago with respect to the direct student loan program. 
More than anything else, that agreement has worked to the benefit of 
students, and it is aid to students that should be our main concern.
  Mr. President, I wish to make it as clear as I can that enough is 
enough. It is time we left the loan program alone. It is time we 
considered changes solely on their merits and not because they appear 
to save sufficient money to meet our meticulous reconciliation 
instructions. It is time we understood, once and for all, that the best 
way to reduce the deficit which hangs over us is through a strong 
economy supported by a well educated and well trained work force.
  I favor bringing the deficit down. We all do. But I do not favor 
doing that on the backs of those who need our help the most--the 
elderly, the poor, the middle-income wage earner, and I think, most 
importantly, the students upon whom we must all eventually depend to 
keep our Nation strong and vibrant. In particular, I do not favor 
making cuts in the loan program or other valuable programs just to pay 
for a tax cut.
  To my mind, the time has come for us to say no to the instructions 
given the Labor Committee. It is time to say no to cuts in the student 
loan program. It is time we took students out of harm's way.
  Mr. President, I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SANTORUM. Mr. President, I ask unanimous consent that further 
proceedings under the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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