[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

[[Page S5952]]

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.

[[Page S5953]]

       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.

                          ____________________