[Congressional Record Volume 149, Number 57 (Wednesday, April 9, 2003)]
[Senate]
[Pages S5069-S5070]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. LANDRIEU:
  S. 835. A bill to amend the Higher Education Act of 1965 to provide 
student loan borrowers with a choice of lender for loan consolidation, 
to provide notice regarding loan consolidation, and for other purposes; 
to the Committee on Health, Education, Labor, and Pensions.
  Ms. LANDRIEU. Mr. President, throughout the next month, hundreds of 
thousands of high school seniors across this Nation will open up their 
mailboxes and receive acceptance letters for college. They will begin 
planning where they will live and what they will study for the next 2 
or 4 years. These students will dream big and have grand ideas about 
what college will mean for them, but before they can officially enroll, 
they will be slapped in the face with a very real question: how are 
they going to pay for it?

[[Page S5070]]

  Attending an institution of higher education can be expensive. 
According to the National Center for Higher Education, the cost of 
attending two or four year, public and private colleges has increased 
faster than both inflation and family income. In 2000, families in the 
lowest quartile of the income bracket spent as much as 25 percent of 
their annual income to send their children to a public, four year 
college, compared with only 13 percent in 1980. At the same time, 
though, sources of federal assistance are diminishing. The Federal Pell 
Grant program, which was designed to help alleviate the financial 
burden on low income families, covered only 57 percent of the cost of 
tuition at public, four year colleges in 1999, whereas Pell Grants 
covered 98 percent of the costs in 1986.
  As the cost of college increases and the impact of Federal grants 
decreases, school loans have become a gateway to attending college for 
the majority of students. However, because of a provision in the 1998 
re-authorization of the Higher Education Act, entitled the ``Single 
Lender Rule,'' students who have all of their student loans from a 
single lender are barred from getting a lower rate by consolidating 
their loans with a different lender. The financial benefits for the 
consumer by using a different lender for loan consolidation are easily 
seen in other areas of finance, such as homeowners refinancing their 
mortgage. What appears to me to be an arbitrarily contrived limitation 
that protects lenders more than students has prevented college 
graduates from consolidating their multiple student loans into a 
single, new loan, thus driving up the cost of attending college.
  Having a college degree is fast becoming a necessary pre-requisite to 
long-term success. That is why I rise today to introduce to my 
colleagues the ``Consolidation Student Loan Flexibility Act of 2003.'' 
This bill would repeal the Single Lender rule, and knock down this 
arbitrarily contrived barrier that hinders students from gaining access 
to higher education.
  Some of my colleagues may be asking, why now? Why not wait to repeal 
the Single Lender rule when we readdress the Higher Education Act? As 
the close of this school year fast approaches, and high school 
graduates begin making important decisions about their educational 
future, we cannot put off the repeal of the Single Lender rule. The 
effects of maintaining the Single Lender rule are devastating. In 2001, 
143,504 students were forced to pay higher rates on their student loans 
because the Single Lender rule denied them benefits of loan 
consolidation. Over 3,300 of these students were from my home State of 
Louisiana. We cannot force another class of college students to pay 
more for college than necessary. Studies have shown that a major factor 
influencing a student's choice of college and degree program is the 
amount of debt connected with the type of institution of profession. 
These choices greatly impact not only the lives of the students 
themselves, but also society as a whole. At a time when our society is 
in dire need of nurses, teachers, and many other professions, we must 
not frighten students away from college for fear of substantial debt 
burdens after their graduation.

  The greatest investment we can make in our future is in the education 
of our children. Today, with the changing world, educating our children 
includes assisting those who desire to obtain a college degree. By not 
repealing the Single Lender rule, we will be continuing to drive up the 
cost of college, thus impeding access, especially for lower-income 
students. According to the Census Bureau, the income gap between people 
receiving a bachelor's degree and people receiving only a high school 
diploma has increased from 57 percent in 1975, to 76 percent in 2002. 
By financially hindering the entrance into college, we will be adding 
to this income gap, which only further hurts our already recessed 
economy.
  The Consolidation Student Loan Flexibility Act is an important first 
step to making college more affordable for all American families. I 
hope and urge my colleagues to join me in making the dream of a college 
education a reality for all.
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