[Congressional Record Volume 143, Number 8 (Tuesday, January 28, 1997)]
[Senate]
[Pages S738-S742]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WELLSTONE:
  S. 212. A bill to increase the maximum Federal Pell Grant award in 
order to allow more American students to afford higher education, and 
to express the sense of the Senate; to the Committee on Labor and Human 
Resources.


        The Affordable Higher Education Through Pell Grants Act

  Mr. WELLSTONE. Mr. President, on January 21 I cosponsored S. 212, the 
Senate leadership's version of President Clinton's education tax 
deduction and credit plan. As an educator for 20

[[Page S739]]

years and a Senator who believes in education, I couldn't be more 
enthusiastic that the President and the leadership have chosen to 
invest $35 billion over the next 5 years into higher education in this 
country. This is a marvelous goal and I support it without hesitation.
  When it comes to investing a large sum of money into education, with 
the goal of making education more affordable for more students and 
working families, I think that it is important to explore every viable 
option. The tax system is one way to distribute money to working 
families. Another existing system is the Pell Grant Program, which is 
already geared toward targeting money at the students who are most 
likely not to attend college because of a lack of funds. Currently, 
Pell Grants go almost exclusively to lower income families. But that is 
not how Pell was designed. It was designed to reach families based on 
their need, not based on their income. If the Pell Grant Program were 
to be funded up to its authorized level, it would be of great benefit 
to many middle-class families as well as lower middle-class families. 
Because Pell is a proven entity and a great deal could be gained by 
investing in it, I rise today to introduce a second option on how to 
bring higher education into the reach of more Americans.
  It is both saddening and shameful that in this country, the best 
predictor of attending college is the family income. We have engineered 
a system in this country where the doors to college are closed for 
those who have the most to gain from higher education. Only 16 percent 
of college freshmen come from households earning $20,000 a year or 
less. Only half of them actually graduate by age 24, and those that 
drop out cite the expense of college as their No. 1 concern. Clearly, 
we are doing an inadequate job of addressing the financial needs of our 
Nation's college bound youth. According to David Wessel of the Wall 
Street Journal, three-quarters of higher income students attend 
college. Half of middle income students attend college. But just one-
quarter of poorest income students attend college.
  As reported by the New York Times, ``the impact of [financial 
pressures on the poor] has been camouflaged by the steady growth in 
college attendance by more affluent students and by older people. But 
students from poor families have increasingly been left behind.'' The 
proportion of students earning college degrees by age 24 from families 
in the richest quarter of the population has jumped from 31 percent in 
1979 to 79 percent in 1994. But the rate among students from families 
in the poorest population over the exact same years, 1979 to 1994, has 
stayed dead flat at 8 percent.
  Looked at another way, affluent students in 1979 were 4 times more 
likely to graduate from college at 24 than poor students, but 10 times 
more likely in 1994. According to Thomas Mortenson, a higher education 
policy analyst in Iowa City, ``there has been a redistribution of 
educational opportunity. We have a greater inequality of educational 
attainment by age 24 than at any time during the last 25 years. Lower 
income kids are having a terrible time in higher education.''
  Mr. President, 25 years ago, the Pell Program was created to respond 
to these discrepancies. The goal of Pell grants was to target funds 
toward those families that were likely to send their children to 
college but couldn't afford to. Consequently, Pell grants have no 
income limit. Even a family with a very high income is eligible for 
Pell, if it can be shown that they have need--for example, if they have 
several children and all the kids are in college, they are supposed to 
fall under the umbrella of the Pell Program. Pell grant awards go first 
to the neediest students, and are phased out as need decreases.

  It was hoped that the Pell Program would pay off in three very 
important ways. First, it would enable more motivated but financially 
insecure students to gain the skills necessary to have productive 
lives. Second, it would increase the number of students enrolled in 
institutions of higher learning, and therefore reduce the cost of 
higher education for everyone. Third, it would provide to the Nation 
all the wonderful benefits of a well-educated population--a skilled 
work force, an improved ability to compete with other nations, a more 
financially secure country.
  The Pell Grant Program has done a world of good. Over the 25 years, 
68.2 million awards have been given out to an estimated 30 million 
students. Millions of lower income students have been able to attend 
college thanks to Pell. While Pell itself has been unable to actually 
reduce college tuitions, it is frightening to imagine how expensive 
colleges would be without the Pell Program, and how few lower income 
families would be able to obtain diplomas. In terms of overall effect 
of the Pell Program on our country, it is almost impossible to 
overstate the significance of having educated so many people who 
otherwise would have been unlikely to have increased their standard of 
living and the standards of their families and those around them.
  When Pell was created, it bore a price tag of $47.5 million--in 1971 
dollars, $118 million in 1997 dollars--and benefited 176,000 grant 
recipients. By 1980 it aided 2.7 million students, and today, the Pell 
Grant Program invests $6.4 billion a year into the education of 3.6 
million grant recipients a year. We should not misinterpret the growth 
of this program as having successfully met the need for the program; 
however, Pell Grants are something of which the Congress should be 
extremely proud.
  Let me explain how the Pell Program works, and how it manages to 
invest money right where it is needed. The formula is simple. First, 
the ``expected family contribution'' is determined through a formula 
used for all Federal student aid programs. The nickname for the 
expected family contribution is EFC. The EFC takes into account the 
family income, the number of dependents in the family, the number of 
family members currently receiving aid or attending college, and 
certain assets if the family earns more than $50,000 a year.
  Here's an example. A typical two-earner family with an income of 
$50,000 that has one dependent child in college would be expected to 
contribute $4,000 per year toward their child's education. The EFC is 
then subtracted from the maximum Pell Grant award, which under current 
law is authorized to be $4,500. If you add up the cost of the child's 
tuition, fees, room, board, and books and it comes out to more than 
$4,500, then that family could expect to receive $500 in Pell grants.
  This example also succeeds in demonstrating the problem with the Pell 
grant system. Currently, the Pell maximum award is, indeed, authorized 
to be $4,500. However, because there was not enough money available for 
the Pell Program last year, the appropriators lowered the Pell maximum 
award to only $2,700. That means that the average three person family, 
which I have described above, will not receive a Pell grant award if 
their income is over $38,600.

  You see, Pell, as originally designed, is supposed to benefit the 
middle class. But for this to be successful, enough money must be 
allocated to the program so that the appropriations process can provide 
the statutory maximum award for each student.
  But this has seldom happened over the years. While the statute sets 
the maximum award, limited funds available for the program have meant 
that appropriations language has almost always reduced the maximum 
award.
  Because the appropriations process reduces the maximum Pell award 
every year, the purchasing power of Pell grants has dwindled in 
relation to college costs. During the 80's and 90's, college costs have 
increased at an annual rate of between 5 percent and 8 percent, 
increases that have always outpaced inflation. In 1980, the average 
Pell award of $882 paid 26 percent of the total annual cost of 
attendance for a 4-year public institution--$3,409--as compared to 
today, when the average award of $1,579 pays only 16 percent of total 
costs of $9,649. This, in light of the fact that, as stated in the 
Higher Education Act, the purpose of the Pell Grant Program is to 
provide an award that ``in combination with reasonable family and 
student contribution and--other Federal grant aid--will meet at least 
75 percent of a student's cost of attendance.''
  In real dollars, appropriations for the Pell Grant Program have 
increased by almost 50 percent since 1980. However, the appropriated 
maximum grant has

[[Page S740]]

increased only 34 percent, which means that if inflation is factored 
in, the maximum award has fallen 13 percent. The result is that few 
families with incomes above $30,000 are likely to qualify for Pell. 
Last year, 54 percent of Pell recipients had incomes of less than 
$10,000.
  This is where the bill I introduce today comes in. At a similar cost 
to the President's tax deduction and credit proposals--$35 billion over 
5 years--my bill would increase the maximum Pell grant award to $5,000 
from the present level of $2,700, thus bringing the award to the level 
at which it was created, adjusted for inflation. With the maximum 
increased, two intents would be accomplished. First, lower income 
students would be entitled to a larger award, thus having more 
opportunity to attend college. Second, because the maximum is 
increased, more students--including students from middle income 
families--would be eligible for Pell grants.
  Here are a few illustrations. Under current law, a single, 
independent student with no children is ineligible for even a minimum 
Pell grant award if she has an income of over $9,800. My bill would 
effectively double the income eligibility; a single student with no 
children with an income of over $16,200 would still be eligible for 
Pell. If that student is a single parent, with two children, her income 
could be as high as $50,600 and she would still be eligible for Pell, 
as opposed to current law, which would eliminate her eligibility at an 
income of $38,800.
  Parents trying to put a dependent child through college would also 
benefit from this bill. For example, a two-parent family with one child 
in college under current law is eligible only if their income is lower 
than $38,600. My bill would raise this eligibility to just under 
$50,000. Under Pell as it exists today, a family with four children in 
college receives the minimum award for each of their children as long 
as their income is lower than $72,600. Under this bill, an average 
family with four children in college would receive the minimum award 
for each child even if their income was as high as $107,300.

  Now let me take a moment to explain why my proposal and the Clinton 
proposal are so deserving of the attention and support of this body.
  These days, parents putting children through college, and young 
adults trying to do it on their own, are facing an increasingly 
daunting challenge. According to the college board, tuition costs have 
gone up more than 40 percent since 1985. Expressed in constant 1994 
dollars, in 1985 tuition at the average private college was $10,058. By 
1994, it was $14,486--a 44 percent increase. The average public college 
tuition was $2,095 in 1985. By 1994, it was $2,948--a 41 percent 
increase.
  Last year alone, college tuition went up 6 percent, more than double 
the rate of inflation. Since 1980, college tuition has risen faster 
than medical costs, and more than twice as fast as family income.
  For the last 10 years, tuition increases at State universities, 
community colleges, and technical colleges in Minnesota have ranged 
from 2 to almost 9 percent every single year. The largest trend in 
tuition increases began in the early 1980's. Since then, tuition at the 
University of Minnesota has risen 264 percent while the Consumer Price 
Index has gone up 71 percent--available chart shows only the increase 
between 1981 and 1992, that is why its numbers are smaller. Next 
academic year, a freshman at the UM Liberal Arts College will pay 
$3,618, plus a higher activity fee, plus a new $135 computing fee.
  All over Minnesota--at private schools, public universities and 
colleges--tuition is going up faster than personal disposable income 
per capita.
  Meanwhile, Government and private aid has declined. Federal 
appropriations for student aid fell 9 percent between 1980 and 1993 
while States allocations fell 13 percent between 1986 and 1992. 
Corporate and private giving is far too small to offset these declines. 
Last year, the Federal Government spent nearly 40 percent less than it 
did the year before to help young people in Minnesota pay for college 
with Perkins loans. That's $1.5 million less in loans--3,214 fewer 
students getting help with their educations. Overall, public subsidies 
to higher education have shrunk from 45 percent of higher education's 
revenues in 1980 to 35 percent today, most of it to public 
universities. Today, more than 80 percent of America's college students 
study at public universities.
  The trend in Federal aid to post-secondary students is towards more 
loans and away from grants. Although more money is now available to 
college students, a greater proportion of it must be paid back. 
According to the college board, the Federal Government invested 80 
percent of its higher education budget into Grants and only 20 percent 
in loans. Today, those numbers are almost exactly reversed. This is a 
trend that affects poorer students much more than those who are 
wealthier, as poor students are forced to ask themselves--what if I 
don't graduate, what will I do with my debt? For these students, Pell 
Grants are a lifeline that keeps being pulled out of their reach.
  Between 1985 and 1994, the share of college costs covered by the 
maximum Pell grant has steadily fallen for all types of institutions. 
For example, at a private university, a Pell Grant covered about 17 
percent the cost of attendance in 1985. By 1994, that fell to about 10 
percent. Similarly, at a public university, a Pell Grant paid for about 
50 percent of college costs in 1985. In 1994, that figure was down to 
about 30 percent.
  As a result, the average debt of those emerging from higher education 
grows at a rate much greater than inflation. Six-and-a-half million 
students, nearly half of the Nation's enrollment, have loans totaling 
$23.8 billion. Student borrowing has grown at an average rate of 22 
percent per year since 1990, outpacing personal income growth four 
times over.
  At Moorehead State University in Moorehead, MN, students are 
graduating with a staggering amount of debt. The average student 
graduating this spring who finished her degree in 4 years owes $10,762. 
For those who take 5 years to graduate, their debt is even higher, an 
average of $11,450. Those figures are both much higher than only 4 
years ago.
  The Minnesota State Colleges and Universities report that students 
graduating from 2-year colleges incur debt of $8,000 to $10,000. Those 
attending State universities are coming out of school with $15,000 to 
$20,000 of debt.
  It should be no surprise that defaults cost the Federal Government 
over $2 billion a year.
  It's not only students that are increasingly saddled with debt. 
Parents are borrowing more and more in order to finance their 
children's educations. The average loan in the PLUS Program--parental 
loans for undergraduate students--between 1992 and 1993 jumped from 
$3,260 to $4,525. In addition, the loan volume for the program grew by 
26 percent.
  If you are a student planning to attend college, or a parent planning 
on paying for your child, you'd better start saving now. Even if you 
plan to send your child to a State school, and even if you start saving 
17 years in advance, you are going to have to start putting away a 
chunk of change.
  Put together, rising costs of education and decreasing Government aid 
spells a greater burden on students and their families--a burden that 
is often impossible to initiate, and at times, if attempted, impossible 
to sustain.
  But it's crazy for us to allow this to go on. Education is the key to 
the economic security of this Nation. By the year 2000, 50 percent of 
all new jobs will require a college education. It is not only our duty 
and obligation to assist these students in their higher education 
endeavors, it is essential for our country's future.
  Higher education pays off. Every year of higher education increases 
an individual's income between 6 and 12 percent. In fact, a college-
educated male earns 83% more during his lifetime than a noncollege-
educated male.
  Education is married to earnings potential. A high school dropout can 
expect to earn, on average, under $13,000 a year; a high school 
graduate, under $19,000; while a college graduate can earn over $32,000 
and a master's degree recipient can earn over $40,000; a doctoral 
recipient can earn over $54,000; and a professional degree recipient 
earns, on average, over $74,000.

  A recent survey of managers showed that an investment in the 
educational

[[Page S741]]

level of their work force resulted in twice the return in increased 
productivity of a comparable increase in work hours and nearly three 
times the return of an investment in capital stock.
  Data from the Society of Research also reveals that poverty rate 
declines as education levels increase. According to the 1992 Census, 
almost a quarter of the children under the age of 6 in the United 
States live in poverty. For many, the opportunity for a higher 
education lies only in the availability of Pell grants. Therefore, the 
Pell Grant Program is integral in breaking the chain of poverty. In 
fact, a national study conducted in 1995 revealed that AFDC recipients 
receiving financial aid are 80 percent more likely to graduate college 
and obtain permanent jobs.
  Families who live in the middle or higher socio-economic bracket will 
send their children to college regardless of available financial 
assistance. Such is not the case for low income groups. Cut backs in 
financial assistance correlate to lack of enrollment and long term 
attendance among lower socio-economic groups. Without the availability 
of Pell grants, low income students will not have the opportunity for 
advanced degrees.
  Mr. President, these are the reasons that I am introducing this bill. 
Ultimately, education is what separates those who achieve from those 
who can never realize the American Dream. The Government needs to 
invest in its citizens if democracy is to flourish, if we are to 
compete in the global marketplace, and if we are to live up to our 
responsibility to the American people.
  As we plan for our country's future and that of its youth, let us be 
sure that a higher education is available and accessible for all. Let's 
create a system in the 21st century in which the No. 1 predictor of 
college attendance is not income, but rather desire.
  I urge my colleagues to support S. 212 and to support this bill.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 212

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. TITLE

       This bill shall be known as ``The Affordable Higher 
     Education through Pell Grants Act.''

     SEC. 2. FEDERAL PELL GRANTS.

       Section 401(b)(2)(A) of the Higher Education Act of 1965 
     (20 U.S.C. 1070a(b)(2)(A) is amended--
       (1) in clause (iv), by striking ``and'' after the comma;
       (2) in clause (v), by inserting ``and'' after the comma; 
     and
       (3) by inserting after clause (v) the following:
       ``(vi) $5,000 for academic year 1998-1999 and each of the 4 
     succeeding academic years,''.

     SEC. 3. SENSE OF THE SENATE

       It is the sense of the Senate that Congress should 
     appropriate funds to provide the maximum Federal Pell Grant 
     award permitted under this Act for academic year 1998-1999 
     and each of the 4 succeeding academic years to all eligible 
     students.
                                  ____


         Aid Cuts Put College Beyond Reach of Poorest Students

                         (By Karen W. Arenson)

       As state governments keep whittling away their support for 
     higher education, tuition at public institutions is likely to 
     continue rising as financial aid shrinks, moving college 
     further beyond the reach of poor students, education experts 
     say.
       ``There has been a redistribution of educational 
     opportunity,'' said Thomas G. Mortenson, a higher education 
     policy analyst in Iowa City and a senior scholar at the 
     National Council of Educational Opportunity Associations in 
     Washington.
       To some experts, New York State is a case in point. Earlier 
     this month, Gov. George E. Pataki proposed to increase 
     tuition at New York's public universities by $400 a year and 
     reduce state aid for the state's neediest students. Tuition 
     at both the State University colleges and City University 
     would rise to $3,600 a year at CUNY's four-year colleges and 
     $3,800 a year at SUNY's.
       Governor Pataki's proposals are not certain to be adopted; 
     the Legislature rejected similar cuts last year. But experts 
     say that higher tuition and reduced aid are inevitable.
       ``It's not this 400 bucks that Governor Pataki is 
     proposing, it's the general pattern,'' said Arthur Levine, 
     president of Teachers College at Columbia University.
       At the City University of New York, which charged no 
     tuition until 1976, tuition now accounts for 43 percent of 
     the four-year college's budget, up from 19 percent seven 
     years ago, CUNY's current budget proposal shows. Students 
     there say any increases strain their stretched personal 
     budgets.
       ``If tuition goes up, I don't think I will have to drop 
     out, but it will not be pleasant,'' said Michelle Whitfield, 
     a 34-year-old Harlem resident who is a voice student at 
     Brooklyn College's Conservatory of Music.
       She works 30 hours a week as a temporary worker doing word 
     processing on Wall Street to pay for college and to support 
     herself and her elderly mother. She earns too much to qualify 
     for financial aid, she said, but had to withdraw from college 
     last spring when she ran out of money. Although she is back 
     in school, she said she might have to sit out future 
     semesters if costs rise.
       Higher-income and middle-income students have been going to 
     college in evergreater numbers as college becomes an 
     increasingly important factor in earning a decent salary. But 
     lower-income students are going in about the same proportions 
     that they did in the 1970's.
       For decades, public universities have remained an important 
     source of higher education for those who cannot afford 
     private institutions. Today, more than 80 percent of 
     America's college students study at public universities.
       But while these universities are still considerably less 
     expensive than most private colleges, they, too, are 
     increasingly pricing themselves beyond the means of the 
     poorest Americans, experts say.
       Morton Owen Schapiro, dean at the University of Southern 
     California and a specialist in the economics of higher 
     education, said that tuition at public colleges and 
     universities had risen by an annual average of 4 percent to 
     4.5 percent after inflation since the late 1970's, well ahead 
     of the growth in financial aid.
       ``That is going to hurt a lot of people,'' he said, adding 
     that while some private colleges offer generous financial aid 
     to needy students, most of them go to public institutions.
       He and Michael S. McPherson, president of Macalester 
     College in St. Paul, Minn., have found that public subsidies 
     to higher education have shrunk from 45 percent of higher 
     education's revenues in 1980 to 35 percent today--most of it 
     to public universities.
       Compounding the financial problems of many students are 
     continuing cuts in financial aid. Federal Pell grants, aimed 
     at helping the nation's neediest students pay expenses other 
     than tuition, now amount to a maximum of $2,700 for students 
     at public four-year colleges. Mr. Mortenson calculates that 
     had they kept pace with inflation, they would amount to more 
     than $5,500 today.
       For many students, state tuition support has declined, too. 
     For 20 years, New York's Tuition Assistance Program--
     available to students with incomes below a certain level--had 
     always covered tuition at the public universities for 
     students who qualified. But in 1995, New York reduced the 
     maximum award for public university students to 90 percent of 
     tuition.
       And now Governor Pataki has again proposed that students 
     who receive Pell grants are well as state tuition assistance 
     should receive less from the state program.
       To some extent, the impact of these financial pressures has 
     been camouflaged by the steady growth in college attendance 
     by more affluent students and by older people. But students 
     from poor families have increasingly been left behind.
       Mr. Mortenson has found that the proportion of students 
     earning college degrees by age 24 from families in the 
     richest quarter of the population (in 1994, those with 
     incomes above $65,000) has jumped sharply, to 79 percent in 
     1994 from 31 percent in 1979. But the rate among students 
     from families in the poorest population (with 1994 incomes 
     below $22,000) stayed flat over the same years, at about 8 
     percent.
       Looking at the trend another way, affluent students were 
     nearly four times as likely as the poorest ones to graduate 
     from college by age 24 in 1979, but nearly 10 times as likely 
     in 1994. ``We have greater inequality of educational 
     attainment by age 24 than at any time in the last 25 years,'' 
     Mr. Mortenson said. ``Lower income kids are having a terrible 
     time in higher education.''
       In 1995, City University surveyed 545 CUNY students who had 
     left the university system even though they were in good 
     academic standing. Thirty-four percent cited lack of money or 
     the need to work as the reason. When the City University 
     raised tuition by $750 in 1995 and New York State cut 
     financial aid, the university saw a sudden drop in 
     undergraduates: 138,000 students enrolled at its four-year 
     colleges, 4,500 fewer than the previous year and about 6,500 
     fewer than projected.
       ``I am convinced that the reason was simply financial,'' 
     said the university's Chancellor, W. Ann Reynolds. ``Students 
     needed to have much more cash on the barrel. I am convinced 
     that we are denying opportunity for poor students to go to 
     college.''
       City University, the nation's largest urban university 
     system, has the highest percentage of students in poverty: 
     about 40 percent of the 139,000 undergraduates at its four-
     year colleges come from households with incomes of less than 
     420,000. More than half of all undergraduates--85,000--
     qualify for Pell grants, and 72,000 get tuition assistance 
     from New York State.
       Still, more than half of the students also work: 27 percent 
     hold full-time jobs and 32 percent work part time--many to 
     support their own families, because 29 percent have children.

[[Page S742]]

       Even with multiple sources of support, many City University 
     students encounter financial problems, which are reflected in 
     their frequent moves in and out of school and the longer time 
     they take to graduate.
       Abdul Khan, a 36-year-old immigrant from Pakistan and an 
     engineering major at City College, has been forced to skip 
     semesters because his full-time job at a newsstand--which 
     pays $13,000 a year--leaves little extra money after living 
     expenses. If costs rise further, he said, ``maybe I can take 
     one semester every year.''
       Mr. Mortenson, the analyst of higher education, said that 
     if financial aid is not increased, one answer for students 
     like Mr. Khan may be to take out more loans--an often 
     unpalatable option for those unsure they will be able to 
     finish college.
       David Torres, a 35-year-old psychology major at Brooklyn 
     College who lives in Ozone Park, Queens, said he had weighed 
     taking out a loan, now that he has exhausted his state 
     tuition assistance.
       ``But loans terrify me,'' he said. ``What if I don't finish 
     and can't pay if off? It's scary.''
       Mr. Mortenson has an answer for students like Mr. Torres.
       ``What I tell kids,'' he said, ``is that as scary as paying 
     for college is, you have to go. The only thing more expensive 
     than going to college is not going to college.''
                                 ______