[Congressional Record Volume 151, Number 6 (Wednesday, January 26, 2005)]
[Senate]
[Pages S596-S598]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE (for himself, Mr. Smith, Mr. Kennedy, Mrs. Boxer, 
        Ms. Cantwell, Mrs. Clinton, Mr. Coleman, Mr. Conrad, Mr. 
        Dayton, Mr. Durbin, Mr. Dodd, Mr. Harkin, Mr. Inouye, Mr. 
        Jeffords, Ms. Landrieu, Mr. Lautenberg, Mr. Leahy, Mr. Levin, 
        Ms. Mikulski, Mrs. Murray, Mr. Reed, Mr. Rockefeller, Mr. 
        Sarbanes, Ms. Stabenow, Mr. Schumer, Mr. Wyden, Ms. Collins, 
        Mr. Johnson, Mr. Kerry, Mrs. Lincoln, and Mr. Biden):
  S. 187. A bill to limit the applicability of the annual updates to 
the allowance for States and other taxes in the tables used in the 
Federal Needs Analysis Methodology for the award year 2005-2006, 
published in the Federal Register on December 23, 2004; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. CORZINE. Mr. President, I join with Senators Kennedy and Smith 
and twenty-seven of our colleagues today in introducing a very 
important piece of legislation, the Ensuring College Access for All 
Americans Act.
  This bill would prevent any student from seeing a reduction in the 
Pell grants under recent changes by the Bush administration to the 
formula used to calculate student aid eligibility. On December 23, 
2004--just 2 days before the Christmas holiday, I might note--the 
Department of Education published updates to the allowance for state 
and other taxes that is used by students and their families to 
calculate their expected family contribution, or EFC, to college 
tuition. The EFC is the amount that students and their families are 
expected to contribute towards college in a given year.
  Changes in a student's ``expected family contribution'' have a direct 
impact on that student's eligibility for a variety of types of 
financial aid. Simply put, as a student's expected family contribution 
goes up, their eligibility for financial aid goes down.
  The Administration's changes to the tax tables have the effect of 
cutting $300 million from the successful Pell grant program, upon which 
more than five million students nationwide rely. It is projected that, 
as a result of these cuts, 1.3 million students will see a reduction in 
their Pell grants and another 89,000 will become ineligible for Pell 
grant assistance.
  Not only will these changes drastically affect Pell grant eligibility 
and aid, but because the EFC formula is used to calculate eligibility 
for other forms of Federal aid, including federal student loans, as 
well as private institutional and state aid, these changes will cut 
practically all forms of student aid. Unfortunately, the Department's 
changes to the state and local tax allowance will increase the EFC for 
nearly all American families and students. While no New Jersey students 
are projected to lose assistance under this year's proposed cuts, they 
were projected to lose assistance under similar cuts proposed in 2003. 
I am very concerned that New Jersey students could be hurt going 
forward if the administration continues to update the tax tables based 
on outdated tax information.
  Certainly, I do not disagree that the tax tables used to determine 
EFC, which have not been updated since 1988, may need to be revised to 
reflect current state and local tax burden. However, the 
administration's proposal does not reflect current tax levels. The 
updates reduce the credit that families receive for paying state and 
local taxes at a time in which they are actually paying more taxes. For 
example, the administration's new tax tables are based on Fiscal Year 
2002 state tax information. According to the National Association of 
State Budget Officers, though, since FY 2002, states have enacted $14.1 
billion in tax and fee increases. Again, because the administration's 
proposal is based on outdated tax information, it does not take into 
account these substantial increases in State tax burden.
  In fact, the General Accounting Office issued a report last week that 
found that the Department of Education's procedures for revising the 
tax tables and the formula the Department used are seriously flawed. 
The GAO report, entitled Student Financial Aid: Need Determination 
Could be Enhanced through Improvements in Education's Estimate of 
Applicants' State Tax Payments, states, ``Education could not provide 
us with written procedures guiding staff on the routine steps necessary 
to update the tax allowance, nor did it maintain detailed records of 
its efforts to obtain data.'' The report goes on to say of the data the 
Department used to revise the tables,


[[Page S597]]


       As a result of certain limitations of the SOI [statistics 
     of income] dataset for the purpose of calculating the 
     allowance and problems with how Education uses this dataset, 
     the current state and other tax allowance may not fully 
     reflect the amount of taxes paid by students and families. 
     The dataset itself is not ideally suited for calculating the 
     allowance because it is limited to financial data from those 
     who itemize their taxes, does not include state and local 
     taxes, and is several years older than the income information 
     reported by students and families on the FAFSA.

  The report further notes that because the SOI compiles data only for 
those who itemize their tax deductions, who may pay different tax rates 
than non-itemizers, the data is further flawed. The GAO goes on to 
suggest improvements to the Department's calculations and the data they 
use.
  These changes also come at a time when tuition is rising dramatically 
at double digit rates, and students and working families are straining 
to provide the financial wherewithal to access America's promise of 
education. According to the College Board, tuition, room, and board at 
a four-year public university costs an average of $11,354, $824 more 
than last year and $1775 more than 2 years ago. In other words, tuition 
at public institutions has been increasing by almost ten percent a 
year. In fact, according to the National Association of State 
Universities and Land-Grant Colleges, tuition and fees at public 
institutions in New Jersey has increased by more than 40 percent since 
the 1999-2000 school year. In some states they've increased by more 
than 60 percent in the last five years.
  To really understand these numbers, though, it's necessary to look at 
the people who are struggling to afford to go to college. To that end, 
I would like to read a couple of personal stories about the importance 
of the Pell grant program to a college-bound student and a student 
struggling to afford college now.
  One student writes,

       I am lucky enough to be attending a top-rate University and 
     receiving a quality education, but I rely on many federal 
     loans and aid, including a Pell Grant, in order to remain 
     where I am. When President Bush decided not to fully fund 
     Pell Grants, he left me and many others in a precarious 
     position. My Pell grant is still pending and I really am 
     counting on it to cover some of my basic expenses; it will be 
     a hardship until it comes--or worse if it doesn't come in 
     full. The President says he's an advocate for young people 
     with his dubious social security plans, but he leaves us 
     behind with his non-commitment to higher education.

  A mother who fears she will no longer be able to afford to send her 
son to school writes,

       I've saved money from the day my son was born so that he 
     may attend the college of his dreams. He is a gifted musician 
     and was awarded scholarships to attend Berklee in Boston. 
     With the help of the Pell Grant and other student loans, he 
     is now a freshman there and I'm proud to say is doing very 
     well. However, I am worried that with Bush having lowered the 
     income standard for Pell, Timmy may lose his grant and there 
     won't be enough money saved for him to stay in school. I 
     would like to give him the opportunity to pursue his dreams 
     and let his talent take him where it may. I see Bush cutting 
     programs from the have nots to give to the haves. How many 
     dreams is he going to destroy and how many more programs is 
     he going to cut?''

  It's wrong, to cut $300 million--a small price to pay to ensure that 
low-income families can afford to send their children to college--from 
this program. And it's even worse to cut aid to 1.4 million families 
based on faulty calculations.
  A college education today is essential to survival in our competitive 
marketplace. Not only does our economy thrive on an educated workforce, 
but also those who are educated and as a result are gainfully employed 
contribute enormously to our tax base. I am willing to venture that the 
costs of the Pell grant program are more than paid back by those who 
were able to go to attend college because of a Pell grant and today are 
productive, tax-paying citizens.
  The Senate must prevent these cuts from becoming a reality. Thirty 
Senators stand behind the legislation I introduce today a bipartisan 
group of thirty Senators, I might add.
  I hope that we can put politics aside and pass this legislation 
immediately to prevent any student from losing Pell grant assistance. 
Finally, I strongly urge the administration to take a close look at the 
GAO report and to reform the flawed system they have used to revise the 
tax tables.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 187

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Ensuring College Access for 
     all Americans Act''.

     SEC. 2. ALLOWANCE FOR STATE AND OTHER TAXES.

       Notwithstanding any other provision of law, the annual 
     updates to the allowance for State and other taxes in the 
     tables used in the Federal Needs Analysis Methodology to 
     determine a student's expected family contribution for the 
     award year 2005-2006 under part F of title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1087kk et seq.), published 
     in the Federal Register on Thursday, December 23, 2004 (69 
     Fed. Reg. 76926), shall not apply to a student to the extent 
     the updates will reduce the amount of Federal student 
     assistance for which the student is eligible.

  Mr. KENNEDY. Today I join Senator Corzine and 26 of our colleagues to 
introduce legislation to prohibit the implementation of the proposed 
changes in the State and local tax tables on college students receiving 
need-based aid.
  When decisions are made by any administration that affect the price 
that families pay for college, it is important that the Congress 
understands both the factors that influenced that decision and the 
impact of those decisions on our constituents. In light of the slumping 
economy, State budget crises, and rising college costs, the 
Department's proposed changes come at a very difficult time for 
students and their families. Raising the cost of tuition by a few 
hundred dollars may cause a student to have to leave school and it is 
our responsibility to ensure that these changes are being made for 
sound reasons.
  I urge the Department of Education to work with Congress when making 
these decisions so that members of this body are made aware of policy 
changes through a collaborative process--and not the media.
  Ms. CANTWELL. Mr. President, I want to take a moment to talk about 
the advantages of having a college education and the importance of 
ensuring access to higher education. That is why I am pleased to join 
as a cosponsor the Corzine-Smith Kennedy Ensuring College Access for 
All Americans Act of 2005. Due to recent changes made to the formula 
determining federal Pell grant awards, many students are at risk of 
losing needed financial aid. This bill would guarantee that no student 
sees a reduction in his or her Pell grant assistance in the 2005-2006 
school year or loses the grant completely.
  We are all familiar with the adage: education is the great 
equalizer--and that a college education is the economic ladder to 
upward mobility. Not only do individuals reap benefits from having a 
college degree, society also values higher education--as we have also 
heard that education is the engine that drives a healthy economy. 
Basically, in addition to all its other benefits, having a good 
education pays individuals in the long run.
  According to a recent report by the college board, college graduates 
earn about 73 percent more than high school graduates over their 
working lives. For those with advanced degrees, earnings are two to 
three times higher than high school graduates. Moreover, society enjoys 
the financial returns on the investment in higher education--from 
generated higher tax payments to decreased dependency on public income-
transfer programs. Overall, higher education improves individual and 
societal quality of life.
  While we are convinced that higher levels of educational attainment 
produces positive outcomes we need to do more to ensure access to 
higher education.
  With the cost of college tuition continuing to rise, financial aid is 
the decisive factor in determining whether thousands of high school 
seniors are college bound or not. In particular, Federal Pell grants 
are especially critical for low-income students financing their way 
through college. According to the college board, college tuition at 4 
year institutions increased on average by over 10 percent in the 2004-
2005

[[Page S598]]

school year. At 2-year public colleges, tuition increased by over 8 
percent.
  However, the Department of Education's recent changes to the formulas 
for financial aid eligibility will cut $300 million in Pell grant 
assistance to students nationwide, resulting in drastic reductions of 
Pell grant awards to more then one million students. The American 
Council on Education estimates that 89,000 students who are currently 
eligible for a Pell grant will lose this financial assistance. An 
additional 1.3 million student will likely see a reduction of $100 to 
$300 in their Pell Grants.
  In my home State, over 4,000 students, just at one college, the 
University of Washington, will be adversely impacted from the change in 
financial aid eligibility. Early estimates show that about 3,900 
students of the 6,900 eligible for a Pell Grant will lose up to $200 a 
year. Two hundred more students will probably lose their minimum grants 
of $400. Many of the students likely to see a decrease in their Pell 
grant award are low income.
  Federal financial aid was critical to my own educational 
achievements. I went to college on a Pell grant. It was a critical to 
my being able to finance my way through school. With these new rules, 
some students may quit school or will have to spend more time working 
when they should be going to class.
  The Ensuring Access for All Americans Act of 2005 would restore this 
critical financial assistance to thousands of needy students in the 
2005-2006 school year. At a time when more and more employers are 
requiring a college degree for employment and tuition costs are 
skyrocketing, government should be opening the doors to educational 
opportunity, not locking students out. I urge prompt Senate action on 
this measure.
  Mrs. FEINSTEIN. Mr. President. I am pleased to join Senators Corzine 
and Kennedy as a cosponsor of the bill Ensuring College Access for All 
Americans that restores cuts to the Federal Pell Grant Program for 
millions of students nationwide.
  Federal Pell grants are the cornerstone of our need-based financial 
aid system ensuring that all students have access to higher education.
  These grants provide nearly $12.8 billion to help about 5.3 million 
low-income students attend college.
  However, approximately 89,000 students currently eligible for a Pell 
grant will lose it, while an additional 1.3 million students will see 
their grants reduced by as much as $100 to $300 due to cuts in the 
Federal Pell Grant Program.
  In California, nearly 150,000 low-income students will see their 
federal Pell grants decrease or disappear.
  These cuts have a huge impact on students at California's public 
colleges and universities.
  Within the University of California system, almost half of the 46,000 
Pell grant recipients who attend one of the eight UC campuses will 
receive reduced grants and about 500 students who receive $400 a year 
will lose their grants completely.
  On December 23, 2004, the Department of Education issued a proposal 
that will cut $300 million from the Federal Pell Grant Program.
  The proposal updates State and local tax tables used to determine 
families' expected contribution towards college cost in a given year 
resulting in students and their families being expected to contribute 
more for college expenses.
  These changes, which use Fiscal Year 2002 State and local data, 
reduce the credit that families receive for paying State and local 
taxes at a time when they are actually paying more taxes.
  Senators Corzine and Kennedy's bill ensures that no student loses 
their Pell grant or sees a reduction in assistance under the Department 
of Education's proposal to update State and local tax tables.
  It would simply ``hold harmless'' any student who stands to lose 
under the new proposal, so that no student would see a reduction in 
their Pell grant. Those students in the States that stand to gain would 
still benefit from the new tax tables.
  It is imperative that cuts to this important student aid program be 
restored so that students can continue to receive their Pell grants 
that they are eligible for.
  I recently received a letter from one my constituents from Chino, CA, 
a parent who is very concerned about the cuts to the Pell grant 
program. The letter said:

       This would result in millions of families, many of whom 
     depend on financial aid including Pell grants, such as my 
     children in college, losing all or part of their federal 
     support. . . . this affects us all and our children's future.

  A college student from Contra Costa County in California wrote:

       The amount of my Pell grant will not cover the cost of 
     supplies that I need for the semester. . . . my parents 
     cannot take out loans themselves. . . . so now I have to take 
     out loans of my own, which for the amount I was approved for, 
     doesn't even cover a quarter of my tuition. I really felt let 
     down and disappointed.

  There could not be a worst time for making changes that would take 
away or shrink a student's financial aid.
  Over 500,000 low and middle-income California students rely on Pell 
grants for financial assistance. The maximum Pell grant has been frozen 
at $4,050 for 3 consecutive years, while the costs of attending a 4-
year public college or private college have increased both nationwide 
and in California.
  We must do all we can to make college education more accessible and 
affordable for our Nation's students.
  I urge my colleagues to join Senators Corzine and Kennedy in 
supporting this legislation.
                                 ______