[Congressional Record Volume 142, Number 97 (Thursday, June 27, 1996)]
[Extensions of Remarks]
[Page E1203]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        COLLEGE COSTS SKYROCKET

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                       HON. JOSEPH P. KENNEDY II

                            of massachusetts

                    in the house of representatives

                        Thursday, June 27, 1996

  Mr. KENNEDY of Massachusetts. Mr. Speaker, 122 years ago, the great 
English leader Benjamin Disraeli spoke to the British House of Commons 
proclaiming the virtues of education. His words, ``Upon the education 
of the people of this country the fate of this country depends'', 
manifested his realization that a knowledgeable population represented 
a key to continued national success.
  Today, with the cost of higher education skyrocketing out of control 
and threatening soon to move beyond the reach of the average American 
family, Disraeli's statement is one that we should remember.
  In the 14 years ending in 1993, colleges boosted tuitions over 200 
percent. Private school tuitions rose an astonishing 220 percent and 
public school tuitions increased 218 percent during that same period. 
The rates of increase represent growth that has outstripped that of 
medical care by more than 40 percent and the Consumer Price Index [CPI] 
by over 150 percent, according to a 1993 Business Week magazine 
article.
  Correspondingly, family median income rose only 54 percent during 
that same 14-year period. What the aforementioned figures indicate, 
simply, is that the current cost explosion of higher education is 
quickly threatening to make one of the major institutions that promotes 
American economic and social strength unaffordable for the average 
American family.
  There are several apparent factors behind the rise in the cost of 
higher education at a 4-year university or college. Competition for 
students and faculty alike has jumped considerably, and schools have 
struggled to keep their campuses in top condition. To remain 
attractive, colleges and universities are forced to add ``quality of 
life'' services to their campuses, such as new athletic equipment or 
facilities. Colleges are often judged, unfairly or not, on whether 
there is new construction on campus.
  This competition has not, as might have been expected, reduced prices 
all around, but actually served to sustain them, as universities spent 
millions trying to upgrade their facilities to be state of the art in 
order to attract the best.
  Tuitions stayed high as the institutions expanded, yet in the opinion 
of many pundits, the value of the resulting educations declined. 
Perceptions about the decreased value of higher education are also 
relevant due to what Dean Breneman of the University of Virginia terms 
the ``Chivas Regal effect''. Breneman's theory asserts that many 
college applicants feel that a high price tag on an education reflects 
its quality. Consequently, families agreed to pay the exponentially 
increasing fees for what they believed to be a better education, and 
what truly amounted to one of decreasing quality.
  While the universities were busy hiking prices, the Federal 
Government was reducing its financial aid to families. The number of 
Federal grants has been cut, in many cases replaced by loans.
  Over half of the $47 billion in financial aid made available by the 
Fedeal Government in 1994-1995 came in the form of loans. In 1994, our 
Government recorded over $23 billion in loan and grant requests. 
Clearly this astronomical amount of requests represented a cry for help 
from an American people fearful that their chance at the American dream 
is passing them by.
  Most students graduating from college in the latter years of the 
nineties expect to carry a personal debt burden of between $15,000 and 
$20,000. Such large amounts of debt hinders and discourages workers 
entering the workforce. Businesses have traditionally offered only 
nominal and insignificant support for such debt repayment, and thus 
have encouraged low employee commitment and high employee turnaround.
  For example, Nellie Mae, a non-profit student loan organization, 
promotes cooperation between businesses and students. The group has 
developed a Federal bill that seeks to expand so-called ``cafeteria-
type'' benefits plans. Under the plan, students would be able to choose 
student-loan repayment as an option on their company benefits plan.
  I strongly urge Congress to look at the daunting predicament in which 
America's higher education system now finds itself, realize its 
responsibility to preserve the education and status of the Nation, and 
recognize Disraeli's lasting reminder as an urgent call to action.

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