[Congressional Record Volume 143, Number 45 (Wednesday, April 16, 1997)]
[Senate]
[Page S3299]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              LOAN INTEREST FORGIVENESS FOR EDUCATION ACT

  Mr. GRASSLEY. Mr. President, I want to let my colleagues know 
that I have introduced legislation to make it easier for all Americans 
to bear the cost of a higher education. My legislation, which I offer 
with my colleague, Senator Moseley-Braun, would restore the deduction 
on the interest paid on student loans, which was eliminated in the 1986 
Tax Reform Act.
  This bill is a simple, direct proposal. Under this legislation, those 
who are paying off student loans will be able to claim a deduction for 
that amount and they would be able to claim this deduction for the time 
it takes to repay the loan.
  When we think of investing money, we often think of investing in 
things--machines, natural resources, or businesses. This measure is an 
investment in human capabilities and talents. This bill will send the 
message to college students across America that their intellectual 
talents are valued and are worth the investment of tax dollars. 
Students need to know the Federal Government and the Nation value their 
contributions of the mind.
  Then, I believe they will have a greater appreciation of the effort 
necessary to successfully complete a higher education.
  And, increasingly, a higher education is the starting point on a 
successful career path. According to the Department of Labor, by the 
year 2000, more than half of all new jobs created will require an 
education beyond high school.
  However, at the same time as a higher education has become 
increasingly necessary, it has also become increasingly expensive. In 
the last 10 years, total costs at public college has increased by 23 
percent and at private colleges by 36 percent.
  According to the General Accounting Office, this means that over the 
last 15 years, tuition at a public 4-year college or university has 
nearly doubled as a percentage of median household income. Accordingly 
to the Congressional Research Service, the best data available 
indicates that students graduating from a 4-year program leave that 
institution with an average loan debt of about $10,000. This, of 
course, represents a significant burden in itself. However, at the 
current capped rate of 8.25 percent for the basic Federal student loan 
program, students also bear nearly $1,000 in interest debt. For 
individuals just starting out, this extra burden adds insult to injury. 
We, in the Congress, can send the signal that we value higher education 
and recognize the financial responsibility students have by restoring 
the deduction on the interest on student loans.
  Furthermore, this proposal is more affordable than what the President 
has proposed. His tuition deduction which received cost estimates 
ranging from $36 to $42 billion. What I and my college from Illinois 
are proposing addresses interest cost, which, of course, is a 
percentage of tuition cost. I believe our proposal provides college 
students with the help they really need, while at the same time being 
fiscally manageable. That is why I urge my colleagues on both sides of 
the aisle to join Senator Moseley-Braun and I in supporting the Loan 
Interest Forgiveness for Education Act.

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