[Congressional Record Volume 143, Number 86 (Thursday, June 19, 1997)]
[Senate]
[Pages S5951-S5953]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
COLLEGE AFFORDABILITY AND ACCESS ACT OF 1997
Ms. COLLINS. Mr. President, I am pleased to speak about S. 930, the
College Affordability and Access Act of 1997, which I introduced
yesterday.
More than 30 years ago, Congress took the historic step of
authorizing Federal student aid programs for the purpose of ``making
available the benefits of postsecondary education to eligible
students.'' Since that time, millions of young Americans have been
afforded an opportunity often denied their parents--a college
education.
During the three decades since the passage of the Higher Education
Act of 1965, both the cost and the importance of postsecondary
education have grown dramatically. And, unfortunately, many once again
find themselves without the financial resources needed to unlock the
door to a better future.
There was a time in Maine when a person armed with a high school
diploma and a willingness to work hard could expect to get a job in a
paper mill and be assured of a very good wage for life. Today, however,
the situation is very different. The manager of one mill told me that
it has been 10 years since they hired a high school graduate.
Similarly, if you visit the recently built recycling mill in East
Millinocket, ME, you are likely to see a handful of computer operators
using specialized training to run highly technical equipment.
At a time when 85 percent of the new jobs require some postsecondary
schooling, the challenge for the children of less affluent families is
to obtain higher education, and the challenge for us is to make that a
possibility.
We cannot and should not guarantee our young people success, but we
can and should strive to guarantee them opportunity. We have a good
record on which to build, as the student aid programs of the Higher
Education Act have assisted countless young Americans. Those programs
do not, however, do enough to assist middle-class families in coping
with the ever-escalating cost of higher education. And they certainly
do not do enough to help those for whom the cost of college is a
crushing debt load.
Mr. President, much of the impetus for this bill comes from my
experience working at Husson College, a small college in Bangor, ME, as
well as from the education hearings that Senator Jeffords and I held in
that city. Husson's students primarily come from lower- and middle-
income families; in most cases, they are the first members of their
family to attend college. That
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makes Husson the perfect laboratory from which to assess the strengths
and weaknesses of our current student aid programs.
From my Husson experience, I came to appreciate the critical role
of Pell Grants and student loan programs in opening the doors to
college for many students. But I also learned that our current programs
do far too little for the many middle-class families who must largely
bear the financial burden of opening those doors for their children. We
also do not do enough for those for whom the road to college ends not
with a pot of gold but with a pile of debt. Indeed, even at a school
with moderate tuition, like Husson, a student participating in the Pell
Grant and Federal Work Study Programs can expect to graduate not only
with a degree but also with a debt of more than $15,000. And if this
student goes on to graduate or professional school, the indebtedness
could easily exceed $100,000.
Missy Chasse, a student who worked for me at Husson, typifies this
problem. After graduating with an $18,000 debt, she decided to return
to her home town of Ashland in rural Maine where the prospect of a job
paying more than $20,000 is remote. Missy is now faced with a daunting
debt that will strain her finances for years to come. Many people,
confronted with this prospect, simply drop out of college or decide not
to go at all.
The dilemma facing middle-class American families who have to rely on
borrowing to educate their children was captured in a letter I recently
received from Maine parents. They wrote:
We both work and are caught in the middle--too much income
for aid and not enough to support college tuition. Our
daughter has almost completed her second year of college with
two more to go. She has loans, we have loans, and it is
becoming increasingly harder to keep our heads above water.
We have another daughter entering college in three years and
we wonder how we will be able to swing it.
That the experience of this family is widespread is borne out by the
statistics. According to the Finance Authority of Maine, the average
size of the education loans it guarantees has more than quadrupled
during the past 10 years. The prospect of being saddled with a
terrifying debt explains why many Maine families decide that the cost
of college is simply too great for them. Indeed, Maine ranks a dismal
49th out of the 50 States in the percentage of our young people who
decide to go on to higher education.
Mr. President, this is the season when Members of this body hit the
commencement trail, summoning up their most stirring rhetoric to
inspire college graduates to dedicate themselves to serving others. The
irony is that the audience is far more likely to see its future not as
one of serving its neighbors, but rather as one of servicing its debt.
My bill recognizes that we have a solid foundation of financial
assistance programs. It seeks to build on that foundation by making
needed changes that will provide some measure of debt relief, promote
private savings, and encourage employer sponsorship of education.
Specifically, the College Affordability and Access Act of 1997 has
three components. The first will make the interest on student loans tax
deductible. The second will authorize the establishment of tax-exempt
education savings accounts. And the third will make permanent the tax
exemption for employer-paid tuition for undergraduate programs and
extend it to graduate and professional programs.
The first component, a small step for Government that will be a big
help to students, allows a tax deduction of up to $2,750 in interest
that individuals pay on their student loans. It will alleviate some of
the financial pain experienced by the recent graduate with the $18,000
debt and the $20,000 salary. While the deduction will be phased out as
the graduate's income increases, the vast majority of those with
student loans will qualify for all or part of the benefit. Through this
change, we will be recognizing that a loan to go to college is not the
same as a loan to buy a stereo, but rather an investment in human
capital that will pay dividends not only to the borrower but also to
our Nation.
The second component will allow parents to place $1,000 per year into
a tax-exempt savings account for the education of a child. Money
withdrawn from the account to pay qualified education expenses will not
be taxed. Assuming the family puts $1,000 into the account every year
for 18 years and the account earns a modest rate of return, the family
can expect to accumulate about $35,000, which will put a big dent in
their education expenses.
Our education policies must stop penalizing savings. Under current
law, families which make financial sacrifices to save for their
children's education may face the paradoxical result that they do not
qualify for aid programs available to their less prudent neighbors.
While this bill will not eliminate that possibility, it will send the
clear message that our Government is prepared to encourage and reward
those who save for college.
The third component seeks to make greater use of the willingness of
businesses to further the education of their employees. It will
accomplish that in two ways. First, it will make permanent the current
tax exemption for employer-paid tuition for undergraduate studies.
Second, it will extend this exemption to those attending graduate and
professional programs.
Mr. President, this bill will benefit families facing the challenge
of paying for college; it will benefit students currently pursuing
their education; and it will benefit graduates struggling to pay their
debts. But the benefits will be far more widespread and significant. In
its own small way, the College Affordability and Access Act will give
us a better educated population, a more competitive economy, and a
society in which the rewards are more equally shared. Most important,
it will reaffirm our commitment to the principle that success in
America should be there for all who are willing to work for it.
Mr. President, I am pleased to tell you this bill has attracted
widespread support. I ask unanimous consent that the text of a letter I
received from the American Council on Education endorsing S. 930 on its
own behalf and on behalf of 12 other educational organizations be
printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
American Council on Education,
Office of the President,
Washington, DC, June 18, 1997.
Hon. Susan Collins,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Dear Senator Collins: I write on behalf of the higher
education associations listed below to commend you for
introducing ``The College Access and Affordability Act.''
Your bill will help millions of families save money for
college, encourage working adults to take advantage of
employer-provided educational assistance to upgrade their
skills, and help recent college graduates repay student
loans. These provisions will be of enormous assistance to
middle income families.
Your proposal to restore the federal income tax exemption
for interest payments on student loans is especially welcome.
In the last decade, a growing number of students have begun
to rely on federal loans to finance their education. While
the terms of federal student loans are generous compared to
other loans, many borrowers find that the repayment of these
debts restricts their personal and professional opportunities
after graduation. By restoring the income tax deduction for
student loan interest, your bill will help moderate the
impact of loan repayments and provide enormous assistance to
student borrowers. Moreover, by establishing a 2,750 annual
limit on the amount of interest that may be deducted, your
proposal will be especially helpful to graduate and
professional students--a category of borrowers who generally
incur much higher debts while in school.
As you know, there is widespread bipartisan interest in
using the tax code to help families meet college costs and we
are deeply grateful for your leadership in this area. My
colleagues and I look forward to working with you and other
members of the Senate as you consider this vitally important
legislation in the months ahead.
Sincerely,
Stanley O. Ikenberry,
President.
On behalf of the following:
American Council on Education.
American Association of Community Colleges.
American Association of State Colleges and Universities.
American Psychological Association.
Association of American Universities.
Association of Catholic Colleges and Universities.
Association of Governing Boards of Universities and
Colleges.
Association of Jesuit Colleges and Universities.
Coalition of Higher Education Assistance Organizations.
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Council of Graduate Schools.
Council of Independent Colleges.
National Association of Student Financial Aid
Administrators.
National Association of State Universities and Land-Grant
Colleges.
Ms. COLLINS. Thank you very much, Mr. President. I yield back the
remainder of my time.
Mrs. MURRAY addressed the Chair.
The PRESIDING OFFICER. The Senator from Washington.
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