[Congressional Record Volume 148, Number 2 (Thursday, January 24, 2002)]
[House]
[Pages H41-H48]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ESTABLISHING FIXED INTEREST RATES FOR STUDENT AND PARENT BORROWERS
Ms. PRYCE of Ohio. Mr. Speaker, by direction of the Committee on
Rules, I call up House Resolution 334 and ask for its immediate
consideration.
The Clerk read the resolution, as follows:
H. Res. 334
Resolved, That upon the adoption of this resolution it
shall be in order to consider in the House the bill (S. 1762)
to amend the Higher Education Act of 1965 to establish fixed
interest rates for student and parent borrowers, to extend
current law with respect to special allowances for lenders,
and for other purposes. The bill shall be considered as read
for amendment. The previous question shall be considered as
ordered on the bill to final passage without intervening
motion except: (1) one hour of debate on the bill equally
divided and controlled by the chairman and ranking minority
member of the Committee on Education and the Workforce; and
(2) one motion to commit.
The SPEAKER pro tempore (Mr. Shimkus). The gentlewoman from Ohio (Ms.
Pryce) is recognized for 1 hour.
Ms. PRYCE of Ohio. Mr. Speaker, for the purpose of debate only, I
yield the customary 30 minutes to the gentlewoman from Florida (Ms.
Slaughter), pending which I yield myself such time as I may consume.
During consideration of this resolution, all time yielded is for the
purpose of debate only.
Mr. Speaker, House Resolution 334 makes in order the bill S. 1762
under a closed rule. The rule provides 1 hour of debate to be equally
divided and controlled by the chairman and ranking minority member of
the Committee on Education and the Workforce. Finally, the rule
provides for one motion to commit.
Mr. Speaker, S. 1762 amends the Higher Education Act of 1965 to
establish fixed interest rates for student and parent borrowers and
extends current law with respect to allowances for lenders. To put it
simply, this legislation will allow for the continued availability of
affordable student loans for students and their families by addressing
a long-standing problem in the Federal student loan program about how
interest rates are calculated. It will simplify loan terms, reduce
confusion, and lock in low rates for the borrower. At the same time, it
will provide stability for lenders, helping to avoid disruption in loan
availability.
Mr. Speaker, more than 9 million United States students today need
student loans to help pay for college, and the education of our
Nation's children is a major concern of most Americans,
[[Page H42]]
and it is the top priority for our President. While we all know that
more money is not the single answer to improving the education of our
children, student loan affordability and access should never become the
barrier to a college education. It is important to pass this bill today
so we can lock in these historically low interest rates.
Students attending the Ohio State University, which is located in my
district, will benefit just like the millions of others pursuing that
dream of a higher education all across our country. S. 1762 recognizes
that investing in our children and providing them the opportunity to
invest in themselves would prepare them and our country for the
challenges of tomorrow and stays true to the spirit that ``no child be
left behind.''
I would like to take a moment to congratulate the gentleman from Ohio
(Mr. Boehner), my colleague and good friend and the chairman of the
Committee on Education and the Workforce, for his hard work and
commitment to improving the educational opportunities for all American
students. I would also like to commend the gentleman from California
(Mr. George Miller), the ranking member of the committee, for his work
and support of this bipartisan legislation. Finally, let me
congratulate the gentleman from California (Mr. McKeon), the chairman
of the Subcommittee on 21st Century Competitiveness, for his hard work
and leadership on this very important legislation.
This bipartisan, bicameral legislation has the support of all the
parties involved, including the lenders and the student associations
alike, and it has the support of a majority of this body as it garnered
257 votes the last time we considered it.
I urge all of my colleagues to support this rule, and I encourage a
``yes'' vote on S. 1762.
Mr. Speaker, I reserve the balance of my time.
Ms. SLAUGHTER. Mr. Speaker, I thank the gentlewoman from Ohio for
yielding me this customary 30 minutes, and I yield myself such time as
I may consume.
(Ms. SLAUGHTER asked and was given permission to revise and extend
her remarks.)
Ms. SLAUGHTER. Mr. Speaker, S. 1762 is a noncontroversial measure
designed to ensure the continued availability of student loans for
students and their families. The bill before us today passed the Senate
by unanimous consent in December and enjoys strong support in the
Chamber from both sides of the aisle.
Student loans are critical for a majority of American families
working to ensure a quality education for their children. With the cost
of a college education skyrocketing, the need for student loans applies
to all segments of society. Congress has a duty to ensure that as this
country weathers a recession, a quality education does not take a hit
in the process.
The legislation addresses a long-standing problem in the Federal
student loan program as to how student loan interest rates are to be
calculated. The problem first came to light several years ago when it
was clear that a provision within the Higher Education Act would
dramatically alter how interest rates would be determined. The interest
rate formula set to take effect back in 1998 would have forced many of
the lenders now participating in the Federal Family Education Loan
Program to reduce or eliminate their participation.
At the time, Congress worked diligently to craft a solution to a
problem that virtually everyone agreed would be an unintended result of
previous legislation. The compromise resulted in the lowest interest
rates in the Stafford loan program's history. Service was uninterrupted
to students and their families, and student loan borrowers are now
paying the historically low interest rate of 5.99 percent in repayment.
Unfortunately, the compromise reached in 1998 was not made permanent
when enacted and is scheduled to expire in 2003, and that is why
today's bill is so important. S. 1762 will extend the current interest
rate formula set to expire in July of 2003 and lock in the lower
borrower rates.
The bill also continues the current formula for determining interest
rates made by student and parent borrowers before July 1, 2006. Loans
disbursed on or after July 1, 2006 would be 6.8 percent for student
borrowers and 7.9 for parents' loans. An average student who borrows
nearly $17,000 will save over $400. Moreover, student interest rates
will remain constant for the life of the loan rather than changing each
year based on a complicated formula.
I would also note for my colleagues that the measure has been
endorsed by the United States Student Association, the American Council
on Education, Sallie Mae, and the Consumer Bankers Association. I urge
everyone to support this bill.
Mr. Speaker, I reserve the balance of my time.
Ms. PRYCE of Ohio. Mr. Speaker, I am very pleased to yield such time
as he may consume to my distinguished colleague, the gentleman from
California (Mr. McKeon), a classmate of mine and the chairman of the
Subcommittee on 21st Century Competitiveness.
Mr. McKEON. Mr. Speaker, I thank the gentlewoman for yielding me this
time.
I rise in strong support of the rule for S. 1762, this very important
legislation to ensure the availability of higher education financing to
the students embarking on a very important time in their lives.
This closed rule is necessary to ensure that this bill is passed
without amendment so as to allow the White House to sign the
legislation into law without delay. I do not believe there is a better
way to serve the students of this Nation than to assure a stable source
of higher education funding for those who need it most: low and middle-
income students. This legislation provides for the uninterrupted
continuation of the Federal Family Education Loan Program, known as
FFELP, and provides certainty of interest rates for all borrowers in
later years.
I urge my colleagues to support this closed rule in an effort to
allow swift action on this bill. Our colleagues on the other side of
the aisle have been involved in each stage of development of this
legislation, and while we believe we had a commitment to this
legislation prior to the end of our last session, unfortunately, due to
unrelated circumstances, the bill failed to pass on the suspension
calendar.
The efforts of our colleagues to take down the bill previously now
forces us to bring it up again and avoid additional politics in an
effort to do what is right for students and parents, as well as student
loan providers, who have been vital partners in the Federal Family
Education Loan Program for more than 35 years.
It is my hope that we can pass this rule and move immediately to the
legislation at hand and pass it overwhelmingly. Let us show the
students of this country that we put their needs above all else and
ensure the availability of low cost student loans for them to embark on
the road to achieving their goals of higher education. Vote ``yes'' on
this rule and ``yes'' on S. 1762.
Ms. SLAUGHTER. Mr. Speaker, I reserve the balance of my time.
Ms. PRYCE of Ohio. Mr. Speaker, I am very pleased to yield such time
as he may consume to the gentleman from Ohio (Mr. Boehner), the
chairman of the Committee on Education and the Workforce.
Mr. BOEHNER. Mr. Speaker, I thank the gentlewoman from Ohio (Ms.
Pryce), my friend and colleague, for yielding me this time.
I would suggest to the House that today we have a rule before us that
will provide for a fair and open debate on a bill that we did in fact
consider last month. Unfortunately, it was brought up under suspension
and, due to some circumstances that had nothing to do with this bill,
did not receive the requisite number of votes.
But I do believe that fixing the student loan interest rate problem
will provide continued availability of affordable student loans for our
students. Today some 9 million students take advantage of our student
loan program, the highest number ever, and they are paying the lowest
interest rates they have ever paid in the history of the program.
{time} 1030
What we want to do today is to pass the underlying bill that will, in
fact, continue to have low, affordable rates available to ensure that
more of our students can achieve their goals of the
[[Page H43]]
American dream by pursuing a postsecondary education.
Mr. Speaker, I think the rule that we have before us is fair and
reasonable. We ought to pass this rule and then pass this bill.
Ms. SLAUGHTER. Mr. Speaker, I yield back the balance of my time.
Ms. PRYCE of Ohio. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, this is a noncontroversial rule that will allow us to
pass very important legislation to continue the availability of
affordable student loans, lock in these low rates, avoid possible long-
term disruptions in access to financing, and provide educational
opportunities for all our young people.
Let us give our children the opportunity to invest in themselves, and
more importantly, to invest in this country's future. I urge my
colleagues to support this fair rule and this bipartisan bill.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The previous question was ordered.
The resolution was agreed to.
A motion to reconsider was laid on the table.
Mr. BOEHNER. Mr. Speaker, pursuant to House Resolution 334, I call up
the Senate bill (S. 1762) to amend the Higher Education Act of 1965 to
establish fixed interest rates for student and parent borrowers, to
extend current law with respect to special allowances for lenders, and
for other purposes, and ask for its immediate consideration in the
House.
The Clerk read the title of the Senate bill.
The text of S. 1762 is as follows:
S. 1762
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. INTEREST RATE PROVISIONS.
(a) FFEL Fixed Interest Rates.--
(1) Amendment.--Section 427A of the Higher Education Act of
1965 (20 U.S.C. 1077a) is amended--
(A) by redesignating subsections (l) and (m) as subsections
(m) and (n), respectively; and
(B) by inserting after subsection (k) the following new
subsection:
``(l) Interest Rates for New Loans on or After July 1,
2006.--
``(1) In general.--Notwithstanding subsection (h), with
respect to any loan made, insured, or guaranteed under this
part (other than a loan made pursuant to section 428B or
428C) for which the first disbursement is made on or after
July 1, 2006, the applicable rate of interest shall be 6.8
percent on the unpaid principal balance of the loan.
``(2) PLUS loans.--Notwithstanding subsection (h), with
respect to any loan under section 428B for which the first
disbursement is made on or after July 1, 2006, the applicable
rate of interest shall be 7.9 percent on the unpaid principal
balance of the loan.
``(3) Consolidation loans.--With respect to any
consolidation loan under section 428C for which the
application is received by an eligible lender on or after
July 1, 2006, the applicable rate of interest shall be at an
annual rate on the unpaid principal balance of the loan that
is equal to the lesser of--
``(A) the weighted average of the interest rates on the
loans consolidated, rounded to the nearest higher one-eighth
of 1 percent; or
``(B) 8.25 percent.''.
(2) Conforming amendment.--Section 428C(c)(1)(A) of such
Act (20 U.S.C. 1078-3(c)(1)(A)) is amended to read as
follows:
``(1) Interest rate.--(A) Notwithstanding subparagraphs (B)
and (C), with respect to any loan made under this section for
which the application is received by an eligible lender--
``(i) on or after October 1, 1998, and before July 1, 2006,
the applicable interest rate shall be determined under
section 427A(k)(4); or
``(ii) on or after July 1, 2006, the applicable interest
rate shall be determined under section 427A(l)(3).''.
(b) Direct Loans Fixed Interest Rates.--
(1) Technical correction.--Paragraph (6) of section 455(b)
of the Higher Education Act of 1965 (20 U.S.C. 1087e(b)), as
redesignated by section 8301(c)(1) of the Transportation
Equity Act for the 21st Century (Public Law 105-178; 112
Stat. 498) is redesignated as paragraph (9) and is
transferred to follow paragraph (7) of section 455(b) of the
Higher Education Act of 1965.
(2) Amendments.--Section 455(b) of the Higher Education Act
of 1965 (20 U.S.C. 1087e(b)) is amended--
(A) by redesignating paragraph (7) as paragraph (8); and
(B) by inserting after paragraph (6) the following new
paragraph:
``(7) Interest rate provision for new loans on or after
july 1, 2006.--
``(A) Rates for fdsl and fdusl.--Notwithstanding the
preceding paragraphs of this subsection, for Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford Loans
for which the first disbursement is made on or after July 1,
2006, the applicable rate of interest shall be 6.8 percent on
the unpaid principal balance of the loan.
``(B) PLUS loans.--Notwithstanding the preceding paragraphs
of this subsection, with respect to any Federal Direct PLUS
loan for which the first disbursement is made on or after
July 1, 2006, the applicable rate of interest shall be 7.9
percent on the unpaid principal balance of the loan.
``(C) Consolidation loans.--Notwithstanding the preceding
paragraphs of this subsection, any Federal Direct
Consolidation loan for which the application is received on
or after July 1, 2006, shall bear interest at an annual rate
on the unpaid principal balance of the loan that is equal to
the lesser of--
``(i) the weighted average of the interest rates on the
loans consolidated, rounded to the nearest higher one-eighth
of one percent; or
``(ii) 8.25 percent.''.
(c) Extension of Current Interest Rate Provisions for Three
Years.--Sections 427A(k) and 455(b)(6) of the Higher
Education Act of 1965 (20 U.S.C. 1077a(k), 1087e(b)(6)) are
each amended--
(1) by striking ``2003'' in the heading and inserting
``2006''; and
(2) by striking ``July 1, 2003,'' each place it appears and
inserting ``July 1, 2006,''.
SEC. 2. EXTENSION OF SPECIAL ALLOWANCE PROVISION.
Section 438(b)(2)(I) of the Higher Education Act of 1965
(20 U.S.C. 1087-1(b)(2)(I)) is amended--
(1) by striking ``, and before july 1, 2003'' in the
heading;
(2) by striking ``and before July 1, 2003,'' each place it
appears, other than in clauses (ii) and (v);
(3) by striking clause (ii) and inserting the following:
``(ii) In school and grace period.--In the case of any
loan--
``(I) for which the first disbursement is made on or after
January 1, 2000, and before July 1, 2006, and for which the
applicable rate of interest is described in section
427A(k)(2); or
``(II) for which the first disbursement is made on or after
July 1, 2006, and for which the applicable rate of interest
is described in section 427A(l)(1), but only with respect to
(aa) periods prior to the beginning of the repayment period
of the loan; or (bb) during the periods in which principal
need not be paid (whether or not such principal is in fact
paid) by reason of a provision described in section
427(a)(2)(C) or 428(b)(1)(M);
clause (i)(III) of this subparagraph shall be applied by
substituting `1.74 percent' for `2.34 percent'.'';
(4) in clause (iii), by inserting ``or (l)(2)'' after
``427A(k)(3)'';
(5) in clause (iv), by inserting ``or (l)(3)'' after
``427A(k)(4)'';
(6) in clause (v)--
(A) in the heading, by inserting ``before july 1, 2006''
after ``plus loans''; and
(B) by striking ``July 1, 2003,'' and inserting ``July 1,
2006,'';
(7) in clause (vi)--
(A) by inserting ``or (l)(3)'' after ``427A(k)(4)'' the
first place it appears; and
(B) by inserting ``or (l)(3), whichever is applicable''
after ``427A(k)(4)'' the second place it appears; and
(8) by adding at the end the following new clause:
``(vii) Limitation on special allowances for plus loans on
or after july 1, 2006.--In the case of PLUS loans made under
section 428B and first disbursed on or after July 1, 2006,
for which the interest rate is determined under section
427A(l)(2), a special allowance shall not be paid for such
loan during any 12-month period beginning on July 1 and
ending on June 30 unless--
``(I) the average of the bond equivalent rates of the
quotes of the 3-month commercial paper (financial), as
published by the Board of Governors of the Federal Reserve
System in Publication H-15 (or its successor), for the last
calendar week ending on or before such July 1; plus
``(II) 2.64 percent,
exceeds 9.0 percent.''.
The SPEAKER pro tempore (Mr. Shimkus). Pursuant to House Resolution
334, the gentleman from Ohio (Mr. Boehner) and the gentleman from
California (Mr. George Miller) each will control 30 minutes.
The Chair recognizes the gentleman from Ohio (Mr. Boehner).
General Leave
Mr. BOEHNER. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous matter on S. 1762.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. BOEHNER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today in support of S. 1762. The legislation
addresses a long-standing problem in the Federal student loan program
as to how student loan interest rates are to be calculated. It provides
for the continued availability of student loan funds to students and
their families by correcting an unworkable interest rate
[[Page H44]]
and special allowance rate formula scheduled to take effect in 2003.
The problem first came to light several years ago when it was clear
that a provision within the Higher Education Act of 1965 would
dramatically alter how interest rates would be determined. The formula
set to take effect back in 1998 would have forced many of the lenders
now participating in the Federal Family Education Loan Program to
reduce or eliminate their participation.
In 1998, the gentleman from California (Mr. McKeon) and the gentleman
from Michigan (Mr. Kildee) were able to craft a bipartisan, but
temporary, solution to this program that virtually everyone agreed that
if it was not corrected would create serious harm to students and their
families by creating an access program in the student loan programs.
The compromise reached through the hard work of the gentleman from
California (Mr. McKeon) and the gentleman from Michigan (Mr. Kildee)
resulted in what are now the lowest interest rates in the Stafford loan
program's history. Service continues to students and their families,
and student loan borrowers are now paying the historically low interest
rate of 5.99 percent in repayment.
Unfortunately, the compromise reached in 1998 was not made permanent
when enacted, and is scheduled to expire in 2003; and the unworkable
index from prior legislation is set to go back into effect. The problem
must be corrected to ensure the availability of capital within the
student loan program.
Lenders in the Federal Family Education Loan Program will not be able
to finance student loans under the index set to take effect in 2003. By
taking action and passing S. 1762 today, we can ensure the continued
availability of student loan funds to students nationwide.
The legislation also extends the current special allowance formula
for student loan providers, allowing them to continue uninterrupted
service to the Nation's students and their families.
This legislation enjoys the support of both Republicans and Democrats
in both Houses of Congress and the administration. It is the result of
compromise and collaboration with all involved and is supported by
student loan providers, financial aid officers, and student
associations.
The reauthorization of the Higher Education Act of 1965 is fast
approaching, and we will have a lot to focus upon. The student loan
interest rate issue consumed virtually all of the reauthorization
process in 1998 and took away time and resources that could have been
used more productively. I think it is important that we fix the
interest rate problem now so that when we do the reauthorization, we
can concentrate on the many issues that will confront us that are of
significant interest to the higher education community and our
students.
The bottom line is this: we have reached an agreement across the
board that this interest rate issue needs to be resolved. Our
colleagues in the other body have done their part. It is now time for
us to do our part. Let us ensure that the availability of student loans
is there for students all across our great Nation.
I urge my colleagues to vote ``yes'' on this bill today, and I
reserve the balance of my time.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself such
time as I may consume.
Mr. Speaker, I am pleased to support S. 1762, that reduces interest
rates on student loans. I would like to begin by thanking four Members
who worked particularly hard on this bill in a bipartisan spirit: the
gentleman from Ohio (Mr. Boehner), the gentleman from California (Mr.
McKeon), the gentlewoman from Hawaii (Mrs. Mink), and the gentleman
from Michigan (Mr. Kildee).
I appreciate the leadership of Senator Johnson in the other body.
Members of our committee worked very hard to bring this legislation
about and to put it in a manner in which all Members of Congress could
support it.
As we know, this legislation came up late last year, on December 20;
and I opposed the bill at that time. I did so because of the Republican
leadership's refusal to schedule a bipartisan bill authored by the
gentlewoman from New York (Mrs. McCarthy), despite the support of the
gentleman from Ohio (Mr. Boehner) and the New York delegation.
That bill, H.R. 3163 would forgive the education loans to surviving
spouses of police officers, firefighters, and other fire and rescue
personnel of the September 11 terrorist attack. I remain disappointed
in the Republicans' failure to schedule this bill. However, my concern
is with the Republicans' use of the suspension calendar and not this
bill. I urge my colleagues to support the bill today.
Today's legislation will ensure continued availability of student
loans. The bank subsidies on student loans will sunset in 2003,
jeopardizing the loans' profitability and therefore the availability.
S. 1762 ensures the stability of this program by making the lender
subsidies permanent. S. 1762 cuts the interest rates for students, and
this was the major part of the debate last year.
Last year some proposed raising the interest rates on the students to
ensure these bank profits. All the Members on the Democratic side of
the Committee on Education and the Workforce signed a letter advocating
a stable loan program without higher rates to the students. Through the
hard work of the gentleman from California (Mr. McKeon), the gentleman
from Michigan (Mr. Kildee), and others, that is what this legislation
does.
In addition to extending lender subsidies, it cuts interest rates to
students, fixing the rates at 6.8 percent beginning in 2006, and will
save the average student about $400. Too often in the Congress, the
needs of the average people come last in line. My colleagues should be
commended for assuring that this legislation meets the needs of
students and their families.
There is broad support in the student loan industry. It has been
endorsed by the U.S. Students Association, the American Council on
Education, and student loan industry groups, including Sallie Mae, the
Consumer Bankers Association. I urge all of my colleagues to support
it.
Mr. Speaker, I reserve the balance of my time.
Mr. BOEHNER. Mr. Speaker, I yield 3 minutes to the gentleman from
California (Mr. McKeon), who is also the chairman of the Subcommittee
on 21st Century Competitiveness.
Mr. McKEON. Mr. Speaker, I thank the chairman for yielding me this
time, and also for the great leadership that he has provided in the
education area during this Congress. I also thank the gentleman from
California (Mr. George Miller) for working with us. They have provided
strong leadership in passing H.R. 1, and that is very important to the
youth of our country.
Mr. Speaker, I rise in strong support of S. 1762. This legislation,
which has been supported by both Democrats and Republicans and was
passed expeditiously by our colleagues in the other body, will ensure
the availability of higher education financing to the students
embarking on a very important time in their lives. There is no better
way to serve the students of this Nation than to ensure a stable source
of higher education funding for those who need it.
This legislation quite simply provides for the uninterrupted
continuation of the Federal Family Education Loan Program, known as
FFELP, and will provide certainty of interest rates for all borrowers
in later years.
Many of my colleagues will remember that the gentleman from Michigan
(Mr. Kildee) and I worked diligently in 1998 to correct the problem in
the Higher Education Act of 1965 dealing with student loan interest
rate calculations. The success of our bipartisan efforts is evidenced
by the current student loan interest rates. Students in repayment now
pay 5.99 percent, the lowest Stafford rates in the program's history.
This low rate and other benefits provided by student loan providers
allows students to partake in a low-cost means of financing their
education while maintaining a strong and stable student loan program.
The agreement we reached in 1998 is now running up against the clock.
The interest rate formula resulting in new low rates while maintaining
the viability of the FFELP is set to expire in the year 2003. If that
occurs, students and parents will be unable to obtain these low-cost
loans from lenders across the country, and lenders that make these
[[Page H45]]
low-cost loans will not be able to finance student loans under the
formula set to take effect.
While we intended the fix to be permanent in 1998, we were unable to
institute it for more than 5 years. By taking this action now, there
will be no interruption in the availability of student loan funds, and
Congress will be able to concentrate fully on many issues that will
confront us during the next reauthorization of the Higher Education Act
of 1965, including grant aid eligibility, distance education, access,
and the cost of higher education, to name a few.
This legislation also takes one additional step for students and
their families: it provides assurances as to what interest rates will
be in the future. While S. 1762 would extend the current viable
interest rate formula until 2006, it would then provide for both
student loans and parent loans to be at a fixed interest rate.
Supporters of this provision feel this will allow families to plan
future expenses knowing clearly what the interest rates on their
education loans will be. We can make the continued availability of low-
cost student loans one less thing students pursuing their dream of
higher education need to worry about.
I would like to thank especially Kathleen Smith and George Conant
from the committee staff, and Bob Cochran and James Bergeron from my
staff; and as I mentioned earlier, the gentleman from Ohio (Chairman
Boehner); the ranking member, the gentleman from California (Mr. George
Miller); the gentlewoman from Hawaii (Mrs. Mink); and the gentleman
from Michigan (Mr. Kildee) for all of the excellent help on this bill.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield such time as he
may consume to the gentleman from New Jersey (Mr. Andrews), a member of
the committee.
(Mr. ANDREWS asked and was given permission to revise and extend his
remarks.)
Mr. ANDREWS. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, I rise in strong support of this well-reasoned, well-
thought-out legislation. I want to thank and commend the gentleman from
Ohio (Mr. Boehner), the gentleman from California (Mr. McKeon), the
gentleman from California (Mr. George Miller), the gentlewoman from
Hawaii (Mrs. Mink), and the gentleman from Michigan (Mr. Kildee) for
their leadership in bringing this to the floor today.
On December 20, I was among those who opposed this legislation. I did
not do so on its merits. I did so because of the principle of defending
the rights of the minority in this Chamber.
The legislation the gentleman from California (Mr. George Miller)
made reference to previously that was introduced by our colleague, the
gentlewoman from New York (Mrs. McCarthy), would have provided student
loan forgiveness for the surviving spouses of heroes, police officers
and firefighters and other heroes involved in the atrocities of
September 11.
That legislation is supported by the Republican leadership and the
Democratic leadership of the committee, and I believe it is supported
by every member of our committee; and it should have been brought to
the floor under the suspension calendar of the House. It should have
been brought immediately to the floor of the House. I hope, Mr.
Speaker, that the leadership reconsiders its decision to deny that
opportunity and brings it forward.
Having said that, we now turn our attention to the legislation before
us. It is worthy in three very important respects.
First of all, it will mean lower interest rates for students and
their families right now. It will make it more affordable to borrow
money to go to school, and that is a good thing.
Second, it will provide stability in the student loan system. We have
an excellent system today that provides for competition between the
direct student loan program and the bank-based private sector student
loan program. As a result of this, students and their families and
institutions get to choose the best offer, the best price, the best
quality for themselves.
Without this change, which assures the financial structure of the
private side of the program, the private side of the program would be
very much in jeopardy, and it is conceivable that private lenders would
leave the system. That would be very disadvantageous to students around
the country.
Finally, the legislation is worthy because, as the chairman of the
subcommittee said just a few minutes ago, it provides some certainty
for families planning for paying for higher education by locking in
today's relatively low interest rates well into the future, and making
them permanent.
For all of these reasons, I would urge both Republican and Democratic
Members to follow suit, follow the example of the other body, and
approve this legislation.
Mr. BOEHNER. Mr. Speaker, I yield 3 minutes to the gentleman from
Georgia (Mr. Isakson), a member of the committee.
Mr. ISAKSON. Mr. Speaker, I thank the chairman for the introduction
and for yielding time to me, but in particular for his hard work on the
Committee on Education and the Workforce on bringing this bill to the
floor; and I particularly commend the gentleman from California (Mr.
McKeon), with whom I have worked for some time now, in seeing this bill
actually come to the floor and be passed.
I really appreciate the acknowledgment of the gentleman from New
Jersey (Mr. Andrews) that the inaction or lack of action in December
really had nothing to do with the merits of this legislation.
{time} 1045
What has to do with the merits of this legislation is ensuring
predictable student loans at competitive and favorable rates for
American students that otherwise might not or would not get the student
opportunity to receive a higher education.
Secondly, it is important, as the gentleman from New Jersey (Mr.
Andrews) has pointed out, that we provide the ability to lock in rates
and have a fixed rate repayment so those families that are struggling
to meet the demands of paying back their cost and ensuring that their
child gets a higher education have a predictable, consistent flow and
rate.
Third, it is important to understand that any time you put indexes
and formulas into the law to affect the rates or the guarantees on any
program there are going to be periodic needs for adjustment, and now is
the periodic need for that adjustment.
There are some, in fact, I was questioned on a radio talk show last
night as I talked about this bill, who questioned whether or not we
ought to be in this business. Well, let me address that for one second
because the gentleman from California (Mr. McKeon) and the gentleman
from Ohio (Mr. Boehner) on their hard work on higher education, the
gentleman from California (Mr. George Miller) and I know the same
thing, in America the most important thing we can have is to see to it
that bright minds who can achieve have the opportunity to further their
education, who can then contribute to its fullest to the United States
of America.
Second, as is the case in most Federal guarantee programs, it
actually produces revenue for the United States as long as we are sure
we will do a good underwriting job and a good collection job is done.
So, Mr. Speaker, I am pleased to rise today and endorse this
legislation. I thank both sides of the aisle for their hard work on it
and say to the students of America who are looking forward to a college
education that otherwise would not be within their reach because of
finances that we are willing to provide the underpinning and the
opportunity for a consistent flow of favorable rate loans for students
to further their dreams and reach their goals.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield such time as
she may consume to the gentlewoman from New York (Mrs. McCarthy), a
member of the committee.
Mrs. McCARTHY of New York. Mr. Speaker, I would like to associate
myself with the words that were spoken here.
There was never any contention about this bill. I certainly supported
it in committee and I support it today and I urge all of my colleagues
to support it.
I think in this time of need of this country that we have to do
everything possible to make sure that our young people and also our
parents know they have the ability to send their children to college
for higher learning. If anything, it is national security to make
[[Page H46]]
sure we have the brightest minds, especially in math and science, to
continue the work that we need.
What happened on December 20, unfortunately, I think was a
misunderstanding. I know my chairman has promised to work with me to
again bring up hopefully the bill on the Surviving Spouse Loan Act,
which is important certainly to many of the victims on September 11,
and I am hoping that we will continue to work on that. I wish we were
able to work on it that night to have a clarification on it.
So, again I stand here in great support of this bill. It had nothing
to do with the merits, the confusion that happened that morning, at 5
o'clock in the morning, I believe it was. But unfortunately we probably
should not do things like that at 5 o'clock. As a nurse I can state
one's mind is not functioning very well.
With that, I do urge my colleagues. The gentleman from Ohio (Mr.
Boehner) and I have worked well together on our committee. We have a
lot of work to do on IDEA coming this year and I am willing to work
with the gentleman on that. Again, I hope his promises of helping me to
get this bill to the floor will continue. I am more than willing to
work together. I urge all of my colleagues to certainly support this
amendment.
Mr. BOEHNER. Mr. Speaker, I yield 2 minutes to the gentleman from
Virginia (Mr. Tom Davis).
Mr. TOM DAVIS of Virginia. Mr. Speaker, I thank my colleague for
yielding me time.
Mr. Speaker, I rise in support of S. 1762, a bill that will ensure
the long-term availability of higher education loans for students and
their families.
Our Nation's higher education loan system under the Federal Family
Education Loan Program is an example of government at its best. By
working in partnership with students, parents, college universities and
private sector loan providers, the Federal Government has made the
dream of college a reality for more than 50 million Americans since
1965.
Right now there are families with children heading off to college
next fall who are talking about not only where their children will
attend school, but how they will pay for it. For high school students
and their families currently facing these daunting questions, today's
action will resolve half of that equation and leave them with the more
pleasant task of determining which college or university is right for
them, not whether they will have the means to afford it.
By continuing the current formula for setting student loan interest
rates, we will avoid the volatility that certainly would have set in
had the current system been allowed to lapse. This will ensure
stability in the Federal Family Education Loan Program and guarantee
the loan system that serves 80 percent of America's schools and
millions of our students.
For the past 35 years education loans have been critical in enabling
America's families to afford the rising cost of college tuition. By
passing this legislation today we will maintain our national investment
in well-educated, well-trained young people who can compete with
workers anywhere in the world. In short, this legislation is good for
students, families, schools, taxpayers and the economy.
Finally, Mr. Speaker, I would like to point out to all of my
colleagues that this bill is supported by both loan providers and
student advocacy groups. In fact, the State PIRG's Higher Education
Project predicts that the typical student borrower will realize a
savings of $680 over the life of the loan.
I want to commend the gentleman from Ohio (Mr. Boehner), the ranking
member, the gentleman from California (Mr. George Miller) and the
gentleman from California (Mr. McKeon) for their leadership in assuring
continued availability of education loans for future generations of
students. This is important legislation for our Nation, and I urge my
colleagues to support it.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield such time as he
may consume to the gentleman from Tennessee (Mr. Gordon), a strong
supporter of this legislation.
Mr. GORDON. Mr. Speaker, I thank the gentleman for yielding me time.
More importantly, I want to thank the gentleman from Ohio (Mr.
Boehner), the gentleman from California (Mr. McKeon) and the gentleman
from Michigan (Mr. Kildee) for the leadership they have exhibited in
bringing this bill before us.
Passage of this legislation provides a final resolution to a long
needed fix within the Higher Education Act related to the way interest
rates for student loans are set, making college more affordable for
millions of students across the country.
S. 1762 has been developed and agreed upon by a bipartisan process
and the other body has passed this legislation in December by unanimous
consent. Every major higher education association, including groups
representing students, schools and lenders, support this legislation.
If we do not take this action now, we run the risk of having a system
under which two-thirds of students loans are made revert back to a
troublesome formula that threatened the viability of several lenders
back in 1998.
Mr. Speaker, most students, especially those from low- and middle-
income families, have enough of a financial challenge getting through
school. They either have to work their way through school or family
members have to take a second job to help defray the cost of higher
education. The burden of high or fluctuating interest rates should not
be another distraction. We have the means to resolve this issue once
and for all, and I urge my colleagues to vote yes on this important
legislation.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield such time as he
may consume to the gentleman from Pennsylvania (Mr. Kanjorski).
Mr. KANJORSKI. Mr. Speaker, I wanted to join my colleagues today
first of all to congratulate the gentleman from California (Mr. McKeon)
and the gentleman from Michigan (Mr. Kildee) for a great compromise
entered into several years ago, in 1998, that provided for a new
formulation of how we would finance student loans.
Basically what we are doing is making it attractive for lenders to
provide funds for students and parents to get guaranteed low rates and
to make the funds sound for at least the next 6 years to bring about a
better use of higher education funding in the United States. I commend
both the ranking member and the chairman of the committee and, as I
said, the respective chairman and ranking member of the subcommittee.
This is a technical problem that probably is not of the highest order
of understanding of people, but it is the type of fix and in the
tradition of trying to be bipartisan in an issue in education and in
the country today where both sides of the aisle can come together and
support this.
I urge all of my fellow Members on the Democratic side to join the
gentleman from California (Mr. George Miller) and myself and others and
my Republican colleagues on the other side and show a resounding show
of support to fix the student loan program to provide long-term funding
into the future at reasonable rates that parents, students and lenders
can rely upon.
Mr. GEORGE MILLER of California. Mr. Speaker, I urge my colleagues to
support the bill.
Mr. Speaker, I have no further requests for time, and I yield back
the balance of my time.
Mr. BOEHNER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, let me say a comment as we close. This really is
important legislation. The costs associated with this bill are covered
in the budget resolution that was agreed to earlier last year, and by
doing this we will continue to have a strong availability of affordable
student loans for our students. With that, I ask my colleagues to vote
for this bill.
Mr. NUSSLE. Mr. Speaker, I rise in support of S. 1762, which ensures
that continued viability of low-interest loans for college students.
When the Budget Committee drafted the fiscal year 2002 budget
resolution last spring, we sought to avert a potential crisis in the
Federal Student Loan Program. The train we saw coming down the track
was a change in the interest rate structure set to take place in July
2003.
That change would repeal the current structure, which supports $38
billion in new, federally subsidized, student loans each year for needy
college students. It would replace it with a controversial new formula
that education experts warned would be potentially disruptive to the
loan program.
[[Page H47]]
The scheduled change could jeopardize the availability of funds for
student loans because it would tie interest rates to long-term
treasuries. The loan program has thrived for years on interest rates
that correspond to short-term Treasury rates.
The scheduled change was created under the assumption that, by 2003,
all student loans would be issued by the Federal Government. But 70
percent of the loans are now issued by private lenders. We have to
adjust for that reality.
Fixing the interest rate problem will be expensive. It will cost
money because the baseline already assumes the scheduled change in
interest rates.
It is for this reason the FY 2002 budget resolution included a
reserve fund that allowed the committee to adjust the appropriate
levels in the budget resolution to offset the ``cost'' of repealing the
change in interest rates.
I would observe, however, that this bill does not fully comply with
the terms of the budget resolution. First, the bill slightly exceeds
the size of the reserve fund in the resolution. This is mostly because
the Congressional Budget Office re-estimated the cost of repealing the
scheduled interest rate change after Congress had adopted the budget
resolution.
Secondly, the budge resolution stipulated that the reserve could only
be tapped if the surplus exceeded specified levels. Unfortunately, the
surplus has not materialized as a result of the events of September 11
and the on-going recession.
Nevertheless, I will support this bill because it was accommodated in
the budget resolution. Further, neither the Budget nor Education
Committees could have foreseen CBO's rescoring of the bill nor the loss
of the surplus due to the recent terrorist attacks.
Finally, I would like to thank Mr. Boehner and Mr. McKeon for their
efforts to ensure the continued viability of the student loan programs,
which will issue more than 9 million new loans this year.
Mr. GILMAN. Mr. Speaker, I rise today in support of S. 1762 which
seeks to ensure the availability of low-cost student loans to millions
of students across the country. Passage of this legislation will ensure
a strong and stable Federal Family Education Loan Program (FFELP) and
give students and their families piece of mind that this important, and
largest, student aid program will be there to serve them and I commend
my colleague from California, Mr. McKeon for helping bring this measure
to the floor today.
The current student loan interest rate formula has provided for the
lowest Stafford Loan interest rates in history, currently 5.99 percent,
but is unfortunately set to expire on July 1, 2003. When the current
formula expires, an unworkable formula will take over. Lenders have
warned us that they will be unable to finance student loans under the
new formula, putting a 35-year history of serving students and parents
in serious jeopardy. Without lenders providing student loans, students
and their families will be left out in the cold, with few options left
to pay for higher education. The temporary fix enacted in 1998 was
intended to be permanent, but the funds were not available to make that
happen. S. 1762 will make the fix permanent.
S. 1762 assures loan availability and stability in the public/private
partnership by continuing the current structure for payments made to
banks and other student loan lenders ensuring the private sector's
continued participation in the student loan program. Present and future
college students need to know that the Federal Family Education Loan
Program will be available to them as they pursue higher education
opportunities. Accordingly, I urge my colleagues to fully support this
measure.
Mr. LEWIS of Kentucky. Mr. Speaker, I was unable to be on the floor
today for consideration of the bill S. 1762. This bipartisan
legislation keeps the interest rates on college student loans at their
current and unprecedented low levels.
Had I been present, I would have voted in favor of this bill. This is
solid legislation that provides for the continued availability of
affordable student loans. The extension of current low interest rates
is necessary to ensure that students can continue to obtain the
financial assistance needed to meet postsecondary education goals. The
current student loan interest rate formula, set to expire on July 1,
2003, provides students and their families with an affordable way to
pay for an education that might otherwise not be possible. A variety of
educational and financial institutions, including the Kentucky Higher
Education Assistance Authority, strongly support S. 1762. Stabilizing
interest rates now will secure educational opportunities for the
future. I am pleased by the broad support this legislation received.
Ms. MILLENDER-McDONALD. Mr. Speaker, I rise today in support of this
legislation to amend the Higher Education Act. This bill will help
millions of students and their families across the nation deal with the
rising cost of higher education. Now more than ever, it is important
that our citizens can afford the costs of a college education.
The bill we are about to vote on will help that cause by setting a
low, fixed, interest rate of 6.8 percent on student loans. Right now,
we are looking at the lowest loan interest rates in history. This low
rate, 5.99 percent, is due to the current interest rate formula that
will expire next year. We must act now to ensure a low interest rate
for our students. Student loans have repayment periods that range
anywhere from 10 years to 25 years. If we can do anything to protect
our students from facing the possibility of sinking deeper in debt
because of higher interest rates, we should do that now. Our students
and their families deserve as much.
This bipartisan bicameral legislation is a great way to start off the
year and help our students across the country. It passed the Senate
unanimously, and now I urge my colleagues to support this measure and
vote ``yes.''
Mr. BOEHNER. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore (Mr. Shimkus). All time for debate has
expired.
Pursuant to House Resolution 334, the Senate bill is considered as
read for amendment and the previous question is ordered.
The question is on the third reading of the Senate bill.
The Senate bill was ordered to be read a third time, and was read the
third time.
The SPEAKER pro tempore. The question is on the passage of the Senate
bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. BOEHNER. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 372,
nays 3, not voting 60, as follows:
[Roll No. 4]
YEAS--372
Abercrombie
Ackerman
Aderholt
Akin
Allen
Andrews
Armey
Baca
Bachus
Baird
Baker
Baldacci
Baldwin
Ballenger
Barcia
Barr
Barrett
Bartlett
Bass
Bentsen
Bereuter
Berkley
Berry
Biggert
Bilirakis
Bishop
Blunt
Boehlert
Boehner
Boozman
Borski
Boswell
Boyd
Brady (PA)
Brady (TX)
Brown (FL)
Brown (OH)
Brown (SC)
Bryant
Burr
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Castle
Chabot
Chambliss
Clayton
Clement
Clyburn
Coble
Combest
Condit
Conyers
Cooksey
Costello
Cox
Coyne
Cramer
Crane
Crenshaw
Crowley
Culberson
Cummings
Cunningham
Davis (CA)
Davis (FL)
Davis, Jo Ann
Davis, Tom
Deal
DeFazio
DeGette
Delahunt
DeLauro
DeLay
DeMint
Deutsch
Diaz-Balart
Dicks
Dingell
Doggett
Dooley
Doolittle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Farr
Fattah
Ferguson
Filner
Foley
Forbes
Ford
Fossella
Frelinghuysen
Frost
Ganske
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Gordon
Goss
Graham
Granger
Graves
Green (TX)
Green (WI)
Greenwood
Grucci
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Harman
Hart
Hastings (FL)
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill
Hilleary
Hilliard
Hobson
Hoeffel
Hoekstra
Holden
Holt
Honda
Horn
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Inslee
Isakson
Israel
Issa
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson (IL)
Johnson, E. B.
Johnson, Sam
Jones (OH)
Kanjorski
Kaptur
Keller
Kelly
Kennedy (MN)
Kennedy (RI)
Kerns
Kildee
Kilpatrick
King (NY)
Kingston
Kirk
Kleczka
Knollenberg
Kolbe
Kucinich
LaFalce
LaHood
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Latham
LaTourette
Leach
Lee
Levin
Lewis (CA)
Linder
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Lynch
Maloney (CT)
Maloney (NY)
Markey
Mascara
Matheson
Matsui
McCarthy (NY)
McCollum
McCrery
McDermott
McGovern
McHugh
McInnis
McIntyre
McKeon
McKinney
McNulty
Meehan
[[Page H48]]
Meek (FL)
Meeks (NY)
Menendez
Mica
Millender-McDonald
Miller, Dan
Miller, George
Miller, Jeff
Mollohan
Moore
Morella
Myrick
Neal
Nethercutt
Ney
Northup
Norwood
Nussle
Oberstar
Olver
Osborne
Ose
Otter
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Pence
Peterson (MN)
Peterson (PA)
Petri
Phelps
Pickering
Pitts
Platts
Pombo
Pomeroy
Portman
Price (NC)
Pryce (OH)
Putnam
Rahall
Ramstad
Rangel
Regula
Rehberg
Reyes
Reynolds
Rivers
Rodriguez
Roemer
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Rothman
Royce
Rush
Ryan (WI)
Ryun (KS)
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Saxton
Schaffer
Schakowsky
Schiff
Schrock
Scott
Sensenbrenner
Serrano
Shadegg
Shaw
Shays
Sherman
Shimkus
Shows
Shuster
Simmons
Simpson
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Souder
Spratt
Stark
Stearns
Stenholm
Strickland
Stump
Stupak
Sununu
Sweeney
Tancredo
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Tiahrt
Tiberi
Tierney
Toomey
Towns
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Visclosky
Walden
Walsh
Wamp
Watson (CA)
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (PA)
Wexler
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wynn
Young (FL)
NAYS--3
Flake
Moran (KS)
Paul
NOT VOTING--60
Barton
Becerra
Berman
Blagojevich
Blumenauer
Bonilla
Bonior
Bono
Boucher
Burton
Clay
Collins
Cubin
Davis (IL)
Doyle
Everett
Fletcher
Frank
Gallegly
Hastert
Hinchey
Hinojosa
Hooley
Hyde
Jones (NC)
Kind (WI)
Largent
Lewis (GA)
Lewis (KY)
Luther
Manzullo
McCarthy (MO)
Miller, Gary
Mink
Moran (VA)
Murtha
Nadler
Napolitano
Obey
Ortiz
Oxley
Quinn
Radanovich
Riley
Roukema
Roybal-Allard
Sessions
Sherwood
Solis
Thomas
Thurman
Traficant
Vitter
Waters
Watkins (OK)
Weldon (FL)
Weller
Woolsey
Wu
Young (AK)
{time} 1122
So the Senate bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated for:
Ms. SOLIS. Mr. Speaker, during rollcall vote No. 4 on S. 1762 I was
unavoidably detained. Had I been present, I would have voted ``yea.''
Ms. McCARTHY of Missouri. Mr. Speaker, on rollcall No. 4, S. 1762, to
establish fixed interest rates for student and parent borrowers, I was
unavoidably detained. Had I been present, I would have voted ``yea.''
Mr. KIND. Mr. Speaker, today, January 24, due to family
considerations, I unfortunately was not present for a rollcall vote.
Had I been present, I would have voted ``yea'' on rollcall No. 4, S.
1762, to establish fixed interest rates for student and parent
borrowers.
Mr. RILEY. Mr. Speaker, I was unavoidably detained for rollcall No.
4, S. 1762, a bill to amend the Higher Education Act of 1965 to
establish fixed interest rates for student and parent borrowers, to
extend current law with respect to special allowances for lenders, and
for other purposes. Had I been present I would have voted ``yea.''
____________________