[Congressional Record Volume 141, Number 200 (Friday, December 15, 1995)]
[Senate]
[Pages S18675-S18676]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             STUDENT LOANS

  Mr. DeWINE. Mr. President, I rise today to discuss what the 
Republican balanced budget bill, the bill that President Clinton vetoed 
with such fanfare last week, would accomplish in a very important area; 
that is, the area of student loans.
  Mr. President, a great deal of attention has been paid to this issue. 
I do not think most people have heard the whole story, the real story. 
The real story is this: The Republican balanced budget plan will 
decrease--let me repeat, decrease--the cost of higher education for 
American families.
  The compromise worked out between the House and Senate reduced 
mandatory spending in the student loan program by $4.9 billion--a 
savings of $4.9 billion. We achieve this goal without--without--
increasing the cost of student loans for students, for their parents, 
or for the colleges. We made these reductions by cutting the 
administrative overhead of the Federal bureaucracy and by reducing the 
Federal spending--to banks, secondary markets, guaranty agencies, and 
other private lenders who administer the guaranteed student loan 
program.
  Mr. President, none--let me repeat, none--of these cuts can be passed 
on to the students, parents, or to their colleges.
  In addition, the Republican balanced budget plan did not achieve this 
$4.9 billion in savings by cutting the amount of money made available 
to students and their parents for college education.
  Mr. President, I think these are two very important points. The 
Republican balanced budget plan does not ask students or their parents 
or colleges to pay more for student loans. The Republican balanced 
budget plan does not cut the amount of money made available to students 
and their parents for a college education. The fact is, Mr. President, 
and the rest of the story really is, balancing the budget as our 
overall budget plan would do, would ultimately decrease the cost of 
students loans. It only makes sense.
  If we balance the Federal budget, which will reduce interest rates, 
the cost of borrowing by students and their families will fall. For 
example, a student that borrowed $11,000 at an interest rate of 8 
percent will repay $18,578 over the life of the loan. By balancing the 
budget in 7 years and by reducing interest rates by 2 percent that same 
student repayment amount will be lowered--lowered--by $2,167, resulting 
in a lower yearly payment of $216. That is real money.
  Mr. President, it is clear these policy changes will not make it more 
difficult for families to pay for their children's education. Just the 
contrary. What our changes will do will be to make it easier for 
families.
  In addition, our Republican balanced budget plan will provide 
students with a tax deduction on a portion of the interest they pay on 
student loans. If you average it out, Mr. President, the average 
borrower will save $8 a month--$8 a month.
  The number of student loans is scheduled to increase as well. Let me 
repeat that: The number of student loans under our plan is going to 
increase. In 1996, it will be higher than ever before with over 7.1 
million student loans. The Congressional Budget Office projects that 
student loans will continue to rise through the end of the century. 
This year the volume of student loans stands at about $24.5 billion; by 
the year 2000 it will rise above $33 billion. That is an increase of 
nearly 50 percent.

  Mr. President, the average student loan amount will rise from today's 
$3,646 to $4,300 in the year 2000. So the balanced budget plan, our 
balanced budget plan, will help make education more affordable.
  The bill will also make substantive changes in the law that are both 
wise and necessary, changes that will make the lending system fair and 
more efficient. The Republican balanced budget plan will extend to 
those students who are in the guaranteed loan program the same benefits 
enjoyed by those who participate in the direct lending program.
  Mr. President, today if you are a student receiving loans under the 
direct lending program, you have a wide variety of options for 
repayment. You can have an extended repayment or income-contingent 
repayment. These and other repayment options make it easier for young 
people to make the transition from college life to the working world. A 
young person getting out of college may decide to take a job that pays 
little but will give him or her a lot of experience. There is no reason 
that student should not be allowed to pay the loan back further in the 
future when he or she is making more money. That is flexibility.
  Mr. President, you can do that with the direct lending program. I 
believe it is only fair that we extend those same options to students 
in the regular guaranteed loan program. That is what the Republican 
balanced budget plan will do.
  We have just received a few details on what the President's proposal 
would do. It is clear that the President's plan would take away from 
the benefits that students would receive under the Republican balanced 
budget plan. The President's proposal, the Clinton proposal, would 
eliminate the expansion of repayment options to students in the 
guaranteed loan program. Under that plan, only students in the Federal 
direct lending program--only in the direct lending program--would have 
flexible repayment options. That is an endorsement, I believe, of the 
status quo, which really is unfair.
  Mr. President, that is some of what the President proposes. We are 
waiting, as I speak this morning, for more details. The more we learn, 
the clearer it becomes that the Republican budget plan in regard to 
student loans is better for students, is better for their parents, is 
better for the colleges. The Republican balanced budget plan provides a 
tax deduction for interest on student loans, the first time since 1986. 
It provides flexible repayment options for all students. Most 
importantly, it cuts the deficit without making a college education 
less affordable for students, parents, and colleges. 

[[Page S18676]]

  In summary, Mr. President, the Republican balanced budget plan 
constitutes a major step forward for the young people in this country. 
I believe strongly that these student loan provisions ought to be 
incorporated in whatever final budget compromise is reached between the 
President and the Congress. Students, parents, or colleges should not 
be made to pay more for a college education. The Republican balanced 
budget plan did not make students, parents, or colleges pay more. The 
President's plan should not either.
  I see also on the floor my colleague from Indiana who has played such 
a major role and has really taken the lead in shaping this very 
responsible plan that we have put forward. It is a plan I know he is 
proud of and I am proud of, as well. I yield the floor.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Indiana, Mr. Coats, is recognized for up to 45 minutes.

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