[Congressional Record Volume 149, Number 171 (Saturday, November 22, 2003)]
[Extensions of Remarks]
[Pages E2417-E2418]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           THE STUDENT AID STREAMLINED DISCLOSURE ACT OF 2003

                                 ______
                                 

                            HON. SAM JOHNSON

                                of texas

                    in the house of representatives

                       Friday, November 21, 2003

  Mr. SAM JOHNSON of Texas. Mr. Speaker, today I am introducing the 
Student Aid Streamlined Disclosure Act, to enhance the privacy of 
individuals who apply for a federal student loan or Pell Grant and to 
ensure the integrity of student aid programs administered by the 
Secretary of Education.
  This year, the Department of Education anticipates that more than 13 
million people will apply for federal student aid. In order to verify 
income information, approximately 4 million of these applicants will be 
selected and required to hand over detailed tax information to school 
administrators with few controls in place to guard against redisclosure 
or misuse of this highly personal information. In addition, nearly 
100,000 people will be required to waive their right to taxpayer 
privacy as a condition of applying for an income-contingent student 
loan.
  The current process used by the Department of Education to verify the 
income information supplied by students is not only unnecessarily 
invasive of student privacy, but it also is ineffective. Numerous 
studies by the Department of Education and the Education Inspector 
General have concluded that income information supplied by students 
does not match information on file with the Internal Revenue Service. 
In fact, a recent study of applications filed during fiscal years 2001 
and 2002 found that the Department of Education had paid $602 million 
in Pell Grants to individuals who were either ineligible or eligible 
for smaller awards.
  The General Accounting Office has confirmed that this substantial 
misallocation of resources could be corrected if Congress would 
redesign the law that governs sharing of information between the 
Department of Education and the Internal Revenue Service. I am pleased 
to say that the bill I am introducing today would accomplish that task 
in a way that enhances taxpayer privacy.
  This legislation would provide for income verification for every 
student loan application, but it would require disclosure of 
information on file with the IRS only in cases where there is a 
discrepancy that is large enough to impact the student grant or loan. 
Sensitive tax information from the IRS could not be disclosed directly 
to schools or contractors, but could only be disclosed to Department of 
Education officials or to the taxpayer who filed the return.
  This tax legislation is a priority of the Bush Administration and the 
Education and Workforce Committee has endorsed data sharing

[[Page E2418]]

as a means of reducing waste, fraud, and abuse in programs administered 
by the Secretary of Education. Congress has already authorized the 
Secretary of Education to match data with the IRS in the Higher 
Education Act of 1998, but, to date, the Internal Revenue Code has not 
been amended to allow this matching to take place. My staff has worked 
closely with the Treasury Department, the Office of Management and 
Budget, the Joint Committee on Taxation, and the Department of 
Education in developing this proposal.
  This proposal is the right policy and, with all of our consultations, 
we believe that it is the correct technical solution. I am introducing 
it as we hopefully close out the first session of the 108th Congress in 
order that it can be reviewed over the next few months by all 
participants in the student loan community. I ask any stakeholders--
students, parents, schools, lenders and loan processors--to review this 
legislation to be sure that there are no unintended consequences of the 
bill. I welcome constructive criticism of this bill and look forward to 
seeing it enacted next year.

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