[Congressional Record Volume 151, Number 37 (Tuesday, April 5, 2005)]
[Senate]
[Pages S3205-S3206]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. OBAMA (for himself and Mr. Inouye):
  S. 697. A bill to amend the Higher Education Act of 1965 to improve 
higher education, and for other purposes; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. OBAMA. Mr. President, I rise today to introduce the Higher 
Education Opportunity Through Pell Grant Expansion Act of 2005, or HOPE 
Act.
  Right now, in schools, playgrounds, and backyards across America, 
children are dreaming about what they want to be when they grow up. As 
tomorrow's astronauts, doctors, and teachers dream about their futures, 
their parents know that so many of those dreams are dependent on a 
college diploma.
  The families I have met in Illinois are worried that they might not 
be able to give their kids a chance at that diploma. Everywhere I go, I 
hear the same story: we work hard, we pay our bills, we cut corners, 
and we put away savings, but we just don't know if it is going to be 
enough when the tuition bill comes in the mail.
  The facts and statistics are not encouraging. College tuition is 
rising at a stunning rate of almost 10 percent a year, and over the 
last 25 years it is gone up an astounding 519 percent. Because of these 
rising prices, over 200,000 students were priced out of a college 
education last year.
  In a country with so much wealth and opportunity for education, it is 
difficult to imagine there are parents who are forced to say to their 
kids: ``We're sorry. We can't afford to send you to college.'' None of 
us in the Senate should rest until those parents can start saying 
``yes'' to their kids.
  This bill would start us down that path by increasing access to Pell 
grants. Today, these need-based awards are used by 5.3 million 
undergraduate students to fund their education. Unfortunately, the 
awards just haven't kept up with the rising price of tuition or even 
inflation. As a result, the current $4,050 Pell grant maximum is $700 
less in real terms than the maximum grant 30 years ago. Pell grants now 
cover only 23 percent of the total cost of the average 4-year public 
college.
  The HOPE Act would correct this problem by raising the Pell grant 
maximum to $5,100, and it would continue to raise this maximum in 
future years to keep up with inflation. The bill also would make sure 
that no student sees a reduction in Pell grant assistance due to recent 
changes in the eligibility formula.
  Because working families are already burdened with too many taxes, 
this bill would not add to the deficit or raise a dime of taxes. 
Instead, it will close two loopholes that guarantee banks and private 
lenders an additional $2 billion in taxpayer subsidies every year on 
top of the interest that college students and their families are 
already paying on their loans. In a country where 200,000 students were 
priced out of college last year, our tax dollars shouldn't be spent 
subsidizing banks that are already making record profits.
  When our children dream about their future, they need to know those 
dreams are within their reach. A college education forms the foundation 
of the opportunity society that will keep this country strong and 
growing in the 21st century. I know we can work together to get this 
done, and I look forward to doing so.
  I urge my colleagues to support the HOPE Act.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 697

       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 ``Higher Education Opportunity 
     Through Pell Grant Expansion Act''.

     SEC. 2. SENSE OF THE SENATE.

       (a) Findings.--The Senate makes the following findings:
       (1) Federal Pell Grants are need-based and are used by 
     5,300,000 undergraduate students to fund their college 
     educations.
       (2) Over 90 percent of Federal Pell Grant recipients come 
     from a family with a combined income of less than $40,000.
       (3) Because of the rising cost of college tuition, the 
     maximum Federal Pell Grant amount of $4,050 for academic year 
     2004-2005 is $700 less in real terms than the maximum Federal 
     Pell Grant amount for academic year 1975-1976.
       (4) Federal Pell Grants for academic year 2003-2004 cover 
     only 23 percent of the total cost of the average 4-year 
     public college.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) eligible undergraduate students should receive the 
     maximum Federal Pell Grant amount established by the 
     amendment made by section 3(b) of this Act; and
       (2) sufficient funds should be appropriated to allow the 
     awarding of the maximum Federal Pell Grant amount for which 
     students are eligible pursuant to the amendment made by 
     section 3(b) of this Act.

     SEC. 3. FEDERAL PELL GRANTS.

       (a) Appropriation of Funds for Federal Pell Grants.--In 
     addition to any amounts otherwise appropriated to carry out 
     subpart 1 of part A of title IV of the Higher Education Act 
     of 1965 (20 U.S.C. 1070a) for the fiscal year ending 
     September 30, 2006, there are authorized to be appropriated 
     and there are appropriated, out of any money in the Treasury 
     not otherwise appropriated for the fiscal year ending 
     September 30, 2006, for carrying out such subpart 1, an 
     additional $2,000,000,000.
       (b) Authorization Amount and Maximum Federal Pell Grant.--
     Section 401(b)(2)(A) of the Higher Education Act of 1965 (20 
     U.S.C. 1070a(b)(2)(A)) is amended to read as follows:
       ``(2)(A)(i) The amount of a Federal Pell Grant for a 
     student eligible under this part shall be $5,100 for academic 
     year 2005-2006, less an amount equal to the amount determined 
     to be the expected family contribution with respect to that 
     student for that year.
       ``(ii) The Secretary shall cumulatively adjust the amount 
     in clause (i) every 2 academic years beginning with academic 
     year 2006-2007 to account for any percentage increase in the 
     Consumer Price Index for All Urban Consumers published by the 
     Bureau of Labor Statistics of the Department of Labor.''.

     SEC. 4. 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 increase the student's expected family 
     contribution under such part F.

     SEC. 5. TERMINATION OF EXCESSIVE ALLOWANCES.

       Section 438(b)(2)(B) of the Higher Education Act of 1965 
     (20 U.S.C. 1087-1(b)(2)(B)) is amended by striking clause (v) 
     and inserting the following:
       ``(v) This subparagraph shall not apply to--

[[Page S3206]]

       ``(I) any loan made or purchased after the date of 
     enactment of the Higher Education Opportunity Through Pell 
     Grant Expansion Act;
       ``(II) any loan that had not qualified before such date of 
     enactment for receipt of a special allowance payment 
     determined under this subparagraph; or
       ``(III) any loan made or purchased before such date of 
     enactment with funds described in the first or second 
     sentence of clause (i) if--

       ``(aa) the obligation described in the first such sentence 
     has, after such date of enactment, matured, or been retired 
     or defeased; or
       ``(bb) the maturity date or the date of retirement of the 
     obligation described in the first such sentence has, after 
     such date of enactment, been extended.''.

     SEC. 6. WINDFALL PROFIT OFFSET.

       Section 438 of the Higher Education Act of 1965 (20 U.S.C. 
     1087-1) is further amended by adding at the end the 
     following:
       ``(g) Windfall Profit Offset.--At the end of every fiscal 
     quarter for which an eligible lender does not receive a 
     special allowance payment under this section, the eligible 
     lender shall pay to the Secretary of the Treasury for deposit 
     into the Treasury as miscellaneous receipts a windfall profit 
     offset payment for the fiscal quarter equal to the amount by 
     which--
       ``(1) the aggregate amount of all payments of interest 
     received by the eligible lender from borrowers on all loans 
     made, insured, or guaranteed under this part during the 
     fiscal quarter; exceeds
       ``(2) interest guaranteed the lender under this section for 
     the fiscal quarter, irrespective of the amount received under 
     subparagraph (A).''.
                                 ______