[Congressional Record Volume 143, Number 40 (Tuesday, April 8, 1997)]
[Extensions of Remarks]
[Pages E599-E600]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THE HOPE AND OPPORTUNITY ACT OF 1997

                                 ______
                                 

                           HON. WILLIAM CLAY

                              of missouri

                    in the house of representatives

                         Tuesday, April 8, 1997

  Mr. CLAY. Mr. Speaker, I am pleased to introduce the Hope and 
Opportunity Act of 1997 proposed by President Clinton. The bill creates 
a Hope scholarship tax credit of up to $1,500 per student for tuition 
and fees in the student's first year, and another $1,500 in the second 
year if the student earns at least a B average. The credit will help 
4.2 million students next year and will save families $18.6 billion 
over 5 years. The HOPE scholarship is

[[Page E600]]

designed to make the first 2 years of college as universal as a high 
school degree.
  The act includes a tax deduction up to $10,000--$5,000 maximum in 
1997 and 1998--for tuition and fees paid for undergraduate and graduate 
education, or job training or retraining. The deduction would be 
``above the line'' so it is available even if the taxpayer does not 
itemize. Some 8 million Americans would benefit from this deduction 
next year, and it will save families $17.5 billion over 5 years.
  The act increases the maximum Pell grant from $2,700 to $3,000, which 
would be the largest increase in Pell grants in 20 years. Also, some 
218,000 older students would become newly eligible for Pell grants by 
increasing the Pell grant living allowance.
  I commend President Clinton for including a Pell grant increase in 
the bill; however, I think it is critical to demonstrate an even 
greater commitment to helping low-income families obtain educational 
opportunities. I propose that Pell grants spending be made mandatory 
for the next 5 years, with a commitment to restore the maximum Pell 
grant to its full value by 2002 and will introduce my own bill to do 
that shortly.
  The President's bill cuts student fees in half for 4 million low- and 
middle-income students, saving them $2.6 billion over 5 years. It also 
reduces the in-school interest rate for 2 million students, saving them 
an additional $1 billion.
  The bill extends section 127 of the Internal Revenue Code through 
December 31, 2000, and reinstates the application of that section to 
graduate students. The provision, scheduled to expire this year, 
excludes employer paid educational assistance from an employee's gross 
income and wages. The bill also creates a tax credit for employer 
provided educational assistance, and provides income exclusion for 
student loan forgiveness.
  The act proposes a number of measures that will level the playing 
field between the Direct Lending and Federal Family Education Loan 
[FFEL] programs so they can fairly compete and operate efficiently. It 
recalls $2.5 billion of Federal moneys currently held in reserve by 
student loan guaranty agencies by clarifying that the Department of 
Education is the ultimate insurer of all FFEL guarantees. The bill also 
standardizes repayment plans for the Department of Education loan 
programs, and increases the percentage lenders and guaranty agencies 
must bear for student loan defaults.
  Unlike proposals made by Republicans who want to give tax breaks to 
the wealthy, the Hope and Opportunity Act of 1997 gives tax relief to 
middle-class families struggling to pay for college. It is critical to 
ensure that middle- and low-income students not face insurmountable 
barriers to higher education. I believe we should move the President's 
higher education plan to the top of our legislative agenda.