[Congressional Record Volume 143, Number 50 (Thursday, April 24, 1997)]
[Extensions of Remarks]
[Pages E755-E757]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               INTRODUCTION OF TWO MAJOR EDUCATION BILLS

                                 ______
                                 

                        HON. WILLIAM (BILL) CLAY

                              of missouri

                    in the house of representatives

                        Thursday, April 24, 1997

  Mr. CLAY. Mr. Speaker, today I am introducing two major education 
bills that address both elementary and secondary, and higher education.
  Last week I cosponsored President Clinton's Hope Scholarship proposal 
because I support the President's commitment to help parents finance 
their kids' education. Admittedly, I have concerns that the President's 
plan does not provide enough assistance for low-income families.
  My view is that the most fair and effective way to improve college 
access and affordability for low-income families is through 
strengthening the Pell Grant program. That is why today I will 
introduce the College Access and Affordability Act of 1997.
  As the chart to my immediate right illustrates, the value of Pell 
Grants has substantially decreased in recent years. In current dollars, 
the value of the maximum Pell Grant was

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over $4,000. Sadly, it is only $2,700 today. Our bill increases the 
maximum Pell Grant through mandatory spending to $3,300 for fiscal year 
1998, and $300 a year thereafter, through fiscal year 2002. The net 
effect of the fiscal year 1998 increase would be that 3.6 million 
additional students would receive an increase of up to $600, and an 
additional 215,000 families would become newly eligible for Pell.
  My bill contains a number of other very important features including 
elimination of student loan origination fees, loan forgiveness for 
students who take teaching jobs in low-income public schools, and 
extension of special rules afforded historically black colleges and 
universities with regard to participation in student loan programs, and 
also included in here is a change to the Pell needs analysis that will 
help older, independent students and students working their way through 
college.
  My second proposal addresses the growing movement in local 
communities to recognize that some of our public schools need renewal. 
Those pushing vouchers are capitalizing on growing parental anxiety 
about their children's education. As a supporter of public schools, I 
am not content with just saying no to vouchers. Therefore, the second 
bill I will introduce today is the Public Schools Renewal and 
Improvement Act of 1997. Here are some of its key features: A local 
consortium, composed of the local educational agency and a group of 
parents, students, representatives of teachers and school employees, 
community and business leaders and others, may submit a request to the 
President for a declaration that a major public schools renewal effort 
is underway in that community.
  As part of its request, the consortium must prepare and submit a 3-
year locally inspired public schools renewal plan that spells out 
specific details concerning the consortium's commitment to public 
school renewal in such areas as parental involvement, training of 
teachers, administrators and counselors, technology enhancements, 
school and classroom safety, and truancy and drop-out prevention.
  The President, along with the Secretary of Education, may approve the 
consortium's request for assistance and may direct various types of 
Federal assistance, including not just dollars, but also equipment, 
infrastructure improvements, et cetera.
  My bill is a 3-year effort and I am requesting $750 million for the 
first and second years. I intend to pursue passage of both bills at 
every opportunity, including work on the budget and higher education 
reauthorization.

     The College Access and Affordability Act of 1997 Bill Summary

       Increases Pell Grants. The bill increases the maximum Pell 
     Grant through mandatory spending to $3,300 for FY 1998, and 
     $300 a year thereafter through FY 2002. The FY 98 increase 
     would make over 3.6 million students eligible to receive an 
     increase of up to $600 and make an additional 215,000 
     families newly eligible for Pell grants.
       The value of Pell grants has substantially decreased in 
     recent years as appropriation levels have lagged behind 
     increases in college costs and authorization levels. Ten 
     years ago, Pell grants covered an average of 55 percent of a 
     student's college costs at a public university. Today, it 
     covers less than 40 percent. The bill will greatly enhance 
     access and affordability to millions of low income students 
     pursuing higher education.
       Eliminates Student Fees. Student origination fees are 
     reduced from 3 percent to 2 percent on July 1, 1998; to 1 
     percent in 2000; to zero after January 1, 2002. The current 1 
     percent insurance premium is eliminated on July 1, 1998. 
     These savings will provide significant benefits to all 
     students, and will provide additional funds to borrowers up 
     front, at the time the loan funds are needed to pay for the 
     cost of attendance.
       Provides Loan Forgiveness for New Teachers. The bill allows 
     new teachers in Title 1 school with a high concentration of 
     poor students (30 percent) to have their Direct or FFEL loans 
     forgiven. Eligible teachers would have 15 percent of their 
     loans forgiven in the first and second years of teaching; 20 
     percent in the third and fourth year; and 30 percent in the 
     fifth year. The amount of the loan forgiveness is not 
     considered ``income'' for purposes of the Internal Revenue 
     Code.
       Helps Older, Independent Students and Dependent Students. 
     The bill proposes substantial improvements in the way 
     financial need is established for disadvantaged independent 
     students who do not have dependents other than a spouse. The 
     bill increases the living offset (the amount of income 
     allotted for the student's living expenses) for single 
     students (and married students if both are enrolled in 
     college) from $3,000 to $6,000, and $9,000 for married 
     students where one is enrolled. The allowance is adjusted for 
     inflation in future years. The bill also increases the 
     dependent student earning allowance from the current level of 
     $1,750 to $4,200. The current earning allowance is too low 
     and is a disincentive to student employment. The change helps 
     a category of low income students who were adversely affected 
     by the 1992 higher education reauthorization.
       Protects Historically Black Colleges and Universities. The 
     bill extends the date (to October 1, 2002) that HBCU's with 
     high default rates are exempted from disqualification in 
     student loan programs. Without the exception, the 
     Department's default prevention policies will have an adverse 
     effect upon 4 year colleges and universities which serve 
     large percentages of minority students.
       Reduces Interest Rates for Unsubsidized Loans. The bill 
     reduces the applicable interest rate on all subsidized and 
     unsubsidized FFEL and Direct Loans during in-school, grace, 
     and deferment periods to the same rate as the Department of 
     Education's own borrowing rate, although the interest rates 
     would be capped at the same levels as current law. The change 
     will reduce Federal costs by reducing excess profits to 
     lenders during times when there are few servicing costs 
     associated with subsidized loans, but the highest profit 
     margins.
       Guaranty Agencies and Lenders. The bill proposes a number 
     of changes to the FFEL guaranty agency system in recognition 
     that these State and private nonprofit entities are not the 
     ultimate guarantors of FFEL and act only as administrative 
     agents of the Federal government. Because the Federal 
     government is the sole insurer of FFEL loans, the Secretary 
     would undertake the obligation to pay lenders directly using 
     his agents and recall guaranty agency reserves over the next 
     five years, saving some $2.5 billion.
       To address structural deficiencies that hamper default 
     prevention activities, guaranty agencies would be authorized 
     to retain no more than 18.5 percent of default collections--
     comparable to the Department's cost of collections. To 
     further encourage default prevention, lender risk-sharing 
     would be increased from 2 percent to 5 percent.
       Direct Lending and FFEL Loan Provisions. The bill allows 
     FFEL borrowers to have the same extended and graduated 
     repayment options currently available only to Direct Loan 
     borrowers. The bill also makes a number of changes that make 
     FFEL consolidation loans more comparable to Direct 
     consolidation loans, thus reducing cost for, and providing 
     greater flexibility to, FFEL borrowers.

               Public Schools Renewal and Improvement Act


                       Section-by-Section Summary

     Sec. 1. Short Title.
       Cites the bill as the ``Public Schools Renewal and 
     Improvement Act of 1997.''
     Sec. 2. Findings and Purposes.
       Findings--Sets forth a number of Congressional findings, 
     among them:
       The fact that many of our nation's public schools need 
     assistance and resources to achieve immediate reform.
       Ongoing reform of underachieving schools demonstrates the 
     promise of public school reform when parents, students, 
     teachers, school administrators and business and community 
     leaders join forces.
       The Federal government should encourage locally-based, 
     public school reform efforts.
       Purpose--The purpose of the bill is to assist local 
     communities that have taken the initiative to renew their 
     public school systems.
     Sec. 3. Definitions.
       Defines ``local schools consortium'' to mean the LEA and a 
     group of other stakeholders, including parents, teachers, 
     students, and community and business leaders.
       Defines other relevant items.
     Sec. 4. Procedure for Assistance Declaration.
       A local school's consortium may submit a request to the 
     President seeking Federal aid (dollars and other resources) 
     to complement indigenous 3-year public school reform plans. 
     The plan is submitted through the State's Governor, who must 
     pass the request along to the President within 30 days. The 
     Governor may or may not choose to comment on the request.
       The President shall review the request, in consultation 
     with the Secretary of Education. If the President is 
     satisfied that the request meets the requirements and 
     conditions spelled out in the legislation, the President may 
     declare that ``a major education renewal effort if underway'' 
     in that LEA, and authorize and coordinate a range of Federal 
     assistance. Requires the consortium to submit annual updates 
     and progress reports.
     Sec. 5. Plan.
       A major component of the request for assistance is a 
     locally-developed public schools renewal plan that must:
       (1) Spell out the ``adverse conditions'' confronting that 
     community's public schools, which conditions must constitute 
     one of the following:
       A substantial number of students have been failing to meet 
     certain national or state benchmarks in basic skills.
       The schools have severe overcrowding or physical plant 
     conditions that threaten health and safety.
       There are substantial shortages in certified teachers, 
     training opportunities and instructional materials.
       Schools are located in areas where crime is so prevalent 
     that student achievement suffers.
       (2) Provide a host of ``assurances'' concerning the 
     commitment of the consortium to genuine public school reform, 
     including:
       That the consortium developed the plan after extensive 
     consultation with state education officials, teachers, 
     parents, business and community leaders and other public 
     education stakeholders.
       That improved parental involvement in the public schools 
     will be addressed.
       That there will be regular, objective evaluation of the 
     plan.

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       That use of funds and other resources provided under the 
     plan will be prioritized to address overcrowding and school 
     infrastructure problems, improved teacher certification and 
     training, readiness for technology, and health and safety 
     concerns.
       That the State or local government will match Federal 
     resources (unless the President waives matching 
     requirements).
       That funds received will supplement, not supplant, other 
     Federal and non-Federal resources.
     Sec. 6. Federal Assistance.
       The President may authorize the Department of Education and 
     other Federal agencies to provide personnel, educational 
     equipment and facilities, and other services to an LEA to 
     which the President has made the requisite declaration.
       The Secretary of Education may be directed by the President 
     to distribute money and other resources to selected LEAs. The 
     Secretary is required to determine the best way to distribute 
     funds through personnel and procedures applicable to existing 
     Federal elementary and secondary education programs.
       General Education Provisions Act (GEPA) provision apply.
     Sec. 7. Use of Assistance--Allowable Reforms.
       Broadly spells out the kinds of reforms the plan must 
     address in order to receive a Presidential stamp of approval.
       School-based reforms--including increased early childhood 
     education, comprehensive parent training, intensive truancy 
     prevention programs, new and alternative schools for 
     dropouts, and enhanced special needs assistance (e.g. ESL 
     students and students with disabilities).
       Classroom focused development--including teacher and 
     principal training academies, recruitment programs at area 
     colleges and universities, stronger links between local law 
     enforcement, schools, and parents, and teacher-mentor 
     programs.
       Accountability reforms--including higher learning standards 
     and meaningful assessments, monitoring schools and 
     determining how to more effectively employ resources, and 
     promotion and graduation requirements (particularly in the 
     basics).
     Sec. 8. Duration of Assistance.
       Provides that assistance is available for FY 1998-2000.
     Sec. 9. Report.
       Requires the Secretary of Education to submit a report to 
     relevant committees of Congress regarding progress under the 
     Act.
     Sec. 10. Authorization of Appropriations.
       Authorizes $250 million for FY 1998, $500 million for FY 
     1999, and ``such sums'' for FY 2000.
       Grants the Secretary of Education regulatory authority to 
     determine matching requirements for non-monetary Federal 
     resources.
       Grants the Secretary waiver authority with regard to 
     matching requirements.

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