[Congressional Record Volume 143, Number 126 (Friday, September 19, 1997)]
[Senate]
[Pages S9726-S9727]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself, Ms. Snowe, Mr. Hollings, and Mr. 
        Robb):
  S. 1199. A bill to amend the Higher Education Act of 1965 regarding 
income protection allowances for certain students; to the Committee on 
Labor and Human Resources.


              the working students' income protection act

  Ms. COLLINS. Mr. President, today, I am introducing the Working 
Students' Income Protection Act, a bill to increase the number of 
working students who are eligible for Federal Pell grants. I am pleased 
to have Senator Snowe, Senator Hollings, and Senator Robb as 
cosponsors.
  This bill will correct a problem created by the 1992 amendments to 
the Higher Education Act that unfairly denies aid to hundreds of 
thousands of deserving students. Let me explain the problem.
  The formula used to determine the eligibility for Federal financial 
aid includes an income protection allowance, known as an IPA, which 
enables working students to retain a portion of their earnings to pay 
their basic living expenses. This allowance is not counted in 
determining eligibility for student aid. A portion of earnings above 
the IPA is used to calculate the contributions students can make to 
their education expenses. As students' incomes rise above the IPA, 
their eligibility for Federal student aid, especially for Pell grants, 
declines.
  The 1992 amendments to the Higher Education Act dramatically and 
drastically lowered the income protection allowances. For single 
students, financially independent of their families, the IPA was 
reduced from $6,400 to $3,000. The IPA for working dependent students 
was lowered from $4,250 to $1,750. As a result, the amount a typical 
independent student can receive under the Pell Grant Program begins to 
decline when his or her income exceeds $3,000, and the student becomes 
completely ineligible at an income level of $10,000.
  Because of this decrease in IPA's, the number of independent students 
receiving Pell grants declined from over a million in 1992 to about 
750,000 in 1993--a loss of over a quarter of a million grants to 
independent working students.
  This change has three unfortunate consequences:
  First, many nontraditional students are not able to pursue post-
secondary education. Typically these are older individuals with jobs 
who are attempting to improve their skills. Because the IPA is not 
enough to meet living expenses, independent students find themselves 
unable to pay tuition and meet their basic living expenses. They are 
forced to defer or even forgo higher education.
  Second, the current law creates a disincentive to work. If a student 
knows that earning more than $3,000 will reduce the size of his or her 
Pell grant award, the student can easily conclude that there is no 
reason to try to earn more than $3,000 a year.
  Third, it penalizes students who are trying to pay for their 
education through work rather than by borrowing. This is particularly 
unfair to the almost 75 percent of dependent undergraduates who are 
working while studying to pay college expenses. When earnings result in 
lower grants, these students must turn to larger loans to finance their 
education.
  The Working Students' Income Protection Act will make great strides 
toward correcting these problems. It will allow single independent 
students to retain $6,000 of their earnings for basic living expenses, 
married working independent students to retain $9,000, and working 
dependent students to retain $4,200 before they begin to loose their 
Pell grants. This will not only make higher education more affordable 
for these students, it will also encourage and reward work, a 
worthwhile objective.
  Moreover, these changes will correct an injustice by providing 
benefits to a segment of the student population that has been largely 
overlooked by the changes in student aid recently passed or currently 
under consideration. Increasing Pell grants by $300, for example, a 
move that I strongly support, which was included in the budget 
agreement, will not help the working students who are ineligible for 
these grants because of the inadequate level of the current IPA. 
Similarly, the tuition tax credit will not help them because they are 
not earning enough to pay taxes. By increasing the IPA, these students 
will be able to share in the government assistance available to those 
seeking to pursue a higher education.
  I would like to give you some examples from the University of 
Southern Maine, a State-supported institution serving 10,000 students. 
These students have an average age of just under 30 years. They are 
largely independent students and they are balancing jobs, school, and 
often family responsibilities. When these students have incomes above 
the IPA, which they must have to survive, they are not eligible for 
Pell grants under the current law. Let me describe two of these 
students to you.
  Both are single students. The first is a 25-year-old junior 
recreation therapy

[[Page S9727]]

major. She has worked as a nurses aide since graduating from high 
school, and she continues to work full time during the summers and part 
time during the school year. The second is a 31-year-old social work 
major. He works year round in a variety of part-time restaurant and 
clerical jobs. Both have total gross earnings of about $15,000 per 
year.
  The current income protection allowance permits each of these 
students to retain only $3,000 for basic living expenses. It assumes 
that the remainder is available for calculating the family contribution 
toward educational expenses. The Working Students' Income Protection 
Act will allow each of these students to retain $6,000 for basic living 
expenses and will restore their eligibility for Pell grants. It will 
allow them to complete their education without incurring significant 
amounts of debt.
  The president of the University of Southern Maine, Richard 
Pattenaude, has often noted that the mission of a public university is 
to help people of diverse backgrounds achieve their goals. These 
citizens, including recent high school graduates, adult learners with 
jobs and families, and single parents, all come to us, he says,

       With dreams of becoming more than they are. I am always 
     moved and inspired by how hard our students work to realize 
     those dreams and how deeply they care about their educations. 
     These students underscore the significance of maintaining 
     support for higher education if we are to enter the 21st 
     century with an educational system ready to meet the needs 
     and challenges of the people we serve.

  By increasing the income protection allowance, the Working Students' 
Income Protection Act will take a major step toward meeting this 
challenge by helping working students afford college and encouraging 
them to pursue higher education.
  Later in this Congress, the Senate Labor and Human Resources 
Committee, whose chairman is here today, will mark up the Higher 
Education Act reauthorization legislation. It is my hope that this 
legislation will be incorporated into the committee's bill.
  Enacting this modest change will make a significant and positive 
change in the lives of thousands and thousands of students in the 
United States I urge my colleagues to show their support by 
cosponsoring this bill.
  Mr. President, I ask unanimous consent that a letter from the 
American Council of Education on behalf of seven higher education 
associations which support this bill be included in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                American Council on Education,

                                Washington, DC, September 4, 1997.
     Hon. Susan M. Collins,
     U.S. Senate,
     Washington, DC.
       Dear Senator Collins: The higher education associations 
     listed below, representing the nation's 3,700 colleges and 
     universities, strongly support the legislation you are 
     sponsoring to correct current inequities in the need analysis 
     formula for the Pell Grant program. Your legislation 
     parallels the reauthorization proposal we have advanced to 
     reinstate or expand eligibility for single independent 
     students and for dependent students who work.
       A broad-based consensus exists among students, campus 
     officials, and higher education policy analysts, as well as 
     the Clinton administration and many members of Congress, that 
     the 1992 Higher Education Act (HEA) amendments made it overly 
     difficult for single, independent students and dependent 
     students with earnings to receive Pell Grants. These changes 
     were felt immediately and had a substantial, negative impact 
     on access to higher education. For example, at least 200,000 
     single independent students lost their Pell Grants as a 
     result of these changes in the first year they were 
     implemented.
       For a number of years, the cost of providing greater grant 
     access for these extremely needy students has been cited as a 
     reason against acting to assist them. However, the President 
     has requested funds for this purpose this year, and the House 
     Appropriations committee has included funds that will make a 
     substantial contribution toward addressing this problem in 
     its version of the FY 1998 Labor, Health and Human Services 
     and Education appropriations bill. Securing these funds, 
     along with passage of authorizing legislation such as yours 
     to permit the funds to be spent, will provide tremendous 
     relief and benefit to students on campuses across the 
     country.
       Again, we are grateful for your leadership on this 
     important issue. Prompt consideration and passage of your 
     bill immediately following the August recess will pave the 
     way for appropriations to follow, enabling students and their 
     families to make financial plans for the next academic year. 
     We are eager to assist you in any way to secure passage of 
     your legislation.
           Sincerely,
                                             Stanley O. Ikenberry,
                                                        President.

                                 ______