[Congressional Record Volume 153, Number 132 (Friday, September 7, 2007)]
[Senate]
[Pages S11241-S11263]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
COLLEGE COST REDUCTION AND ACCESS ACT--CONFERENCE REPORT
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of the conference report to accompany
H.R. 2669, which the clerk will report.
The legislative clerk read as follows:
Conference report to accompany H.R. 2669, an act to provide
for reconciliation pursuant to section 601 of the concurrent
resolution on the budget for fiscal year 2008.
The ACTING PRESIDENT pro tempore. Under the previous order, there is
75 minutes of debate remaining on the conference report, with the time
equally divided between the chairman and the ranking member.
Who yields time?
Mr. ENZI. Mr. President, I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. KENNEDY. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. KENNEDY. Mr. President, I ask unanimous consent that the time
under the quorum be equally divided.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. KENNEDY. Mr. President, as I understand from the previous
agreement, we have approximately an hour, probably an hour and 12
minutes, that will be equally divided prior to the time of a vote on
what has been labeled the College Cost Reduction and Access Act; am I
correct?
The ACTING PRESIDENT pro tempore. The Senator is correct.
Mr. KENNEDY. Mr. President, I yield myself 5 minutes.
Mr. President, first of all, I want to express appreciation to my
friend and
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colleague from Wyoming, Senator Enzi, and to thank all of the members
of our committee for the work they have done on this legislation. This
truly is a bipartisan piece of legislation that is focused on improving
opportunity and improving quality of life for millions of Americans in
our education system.
We worked very closely together when Senator Enzi was chair, and we
have worked very closely together since I have had the opportunity to
chair the committee. And now we have this legislation which is going to
make an enormous difference for so many. I will discuss it in detail
after the vote and explain it in greater detail in the record for both
our colleagues and others who are interested in this legislation and
what we have accomplished. But at the outset, I think all of us on this
side of the aisle know that without strong cooperation and assistance
from Senator Enzi and both sides of the aisle, we wouldn't be where we
are today with this legislation, and we would not have successfully
passed the reauthorization legislation in the Senate that has a number
of very important items in it. I will describe those later on in the
day as well.
We are also very grateful to the staffs of our committee, who have
done a really extraordinary job during this period of time.
Mr. President, education is the engine of hope and opportunity for
people of this country, and it has been recognized as such from the
earliest days of the Republic. In my State of Massachusetts, our State
constitution, written by John Adams in 1780, spells out in great detail
the responsibilities of our State, of our commonwealth, to try to make
a commitment to educational opportunities for the people of our State.
And it has been replicated, that language or something similar has been
replicated in all of the State constitutions.
Education is really the key. We have seen the progress and the
changes that have taken place over the period of years, and we will
have a chance to review that history a little later in the morning. But
I am mindful today that establishing a benchmark is important in
recognizing that this assistance to students and to families is the
greatest assistance that will have been provided for the American
family since the GI bill, the GI bill that was so successful at the end
of World War II.
It has been estimated that for every dollar that was invested in the
GI bill, $7 was returned in taxes to the General Treasury. Historians
will point out that it helped establish the middle class, the middle
class which has been the strength of our Nation over the last 60 or 70
years. There is no question about it. We built the middle class on the
pillars of education, on the pillars of educational opportunity.
In this legislation, we invest $20 billion--$20 billion--and not a
nickel of it comes as an additional burden on taxpayers. It comes from
the lenders. They will be able to continue to provide opportunities for
students through their lending agencies, and this $20 billion will
provide direct assistance to the neediest children in this country. It
will provide help and relief for families that have real debt in terms
of interest rates.
Most interestingly, Mr. President, is the fact that it will encourage
young people in this country to involve themselves in public service
and public life through their communities. None of us can visit schools
and colleges across the country and not be overwhelmingly impressed by
the desire of young people to make a difference in helping to solve the
problems and the challenges we are facing today.
We can look as recently as this week at the cover of Time magazine
outlining this tremendous surge of young people wanting to participate
in solving problems in their communities in a variety of different
ways.
We have understood that, Mr. President, and we are saying to those
young people: Yes, we know the cost of education has gone up. Yes, we
know we have not kept pace in providing assistance to you to keep up
with the cost of education. Yes, we understand your parents have been
working hard, and still the middle class has been holding on by its
teeth in terms of battling the problems of inflation and no wage
increases. Yes, it has been more challenging for middle-class families
to go on to college. And, yes, if they go on to school they will end up
with a great deal of debt, which means they will not be able to go into
the kinds of fields of service, service to the community, that they
might like to. But that is going to change, and change dramatically,
with this legislation.
There are many different provisions in the legislation, and we will
come to grips with those as the morning goes on, but this is saying to
the young people: If you finish up in school and college and you have
debt and you want to become a schoolteacher, you want to work in the
criminal justice system, you want to work with special needs children,
you want to work for a nonprofit, you will never pay more than 15
percent of your income in repayment of your debt. And after a period of
years, a 10-year period of time, your debt will be forgiven in full--
completely.
This is an incentive for young people to be able to go into public
service and serve their community. I think it is enormously important
and responsive to the time. I will have a chance later to go through
this legislation in greater detail, but this is a matter of enormous
importance. It is a matter of enormous consequence. It reflects the
best judgment of those on this Education Committee who have worked long
and hard on this legislation.
We are grateful for the fact the President has indicated that he is
going to support this legislation. At a time of great divisiveness on
so many things, we have taken an issue of fundamental importance to
families in this country and we are saying: Help is on its way. That is
effectively what this legislation will do. We will spend a good deal of
the morning going over the details of it and how those general concepts
I have outlined this morning will be implemented in the form of the
legislation.
Mr. President, I reserve the remainder of my time.
The ACTING PRESIDENT pro tempore. The senior Senator from Wyoming.
Mr. ENZI. Mr. President, I yield myself whatever time I take, and I
do rise to speak in support of the conference report under
consideration today.
I thank the Senator from Massachusetts and his staff for their
participation and the way they kept us informed during the conference.
I have to say ``kept informed'' because we were not at the conference,
except for the one kind of superficial meeting we had where we got to
make speeches, but they did a good job of keeping us informed. This
seems to be the way that reconciliation happens. I know when the
Republicans were in the majority that is the way it happened, so I am
not surprised that when the Democrats are in the majority that is the
way it happened. But it was very helpful to be kept informed on what
was happening.
There are quite a few things that the reconciliation bill does, but I
have to mention that without the reauthorization package it is very
incomplete. We are urging the House to hurry and do the reauthorization
part so that we truly have a higher education package. Without that,
there are a lot of things that are left out, and I will go into that a
little bit this morning in more detail following the vote.
This isn't the first time we have reduced the subsidies to lenders
and provided greater benefits to students. Two years ago, in the
conference that I was referring to, we produced a report that found
billions in savings by further reducing subsidies to lenders and
applied those savings to increased grants for low-income students,
expanded loan forgiveness, and reduced interest rates on undergraduate
subsidized loans.
We all agree if there is an excess subsidy in the student loan
program, it should be eliminated. The key question is how much excess
there is and how to eliminate it. There are no clear-cut answers to
these questions. One approach included in this conference report is the
reduction of the special allowance payments to the lenders.
I am pleased that we retained the provisions that recognize the
unique role that our not-for-profit lenders have in providing
information and services to students and their families. Not-for-profit
lenders focus on communities and they serve students locally. For this
reason, we maintained the 15-basis-point differential cut in the
special allowance payments between for-profit and not-for-profit
lenders. The
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cut in the special allowance payments to for-profit lenders is 55 basis
points, and for not-for-profit lenders it is 40 basis points.
Now, we took a first step in this conference report toward refining
the way those levels are determined by including an auction pilot that
lets the marketplace determine the appropriate level for the Parent
PLUS Program, which is about 10 percent of the loans.
This conference report provides additional need-based grant aid which
is a critical component of increasing access to and the affordability
of college. Over 55 percent of the savings are dedicated to increasing
the Pell grant award. In the next 5 years, low-income undergraduate
students will see the maximum Pell grant award increased by more than
$1,000. Additionally, we increase the income protection allowance so
that students are not penalized for working and saving for college, and
we raise the income threshold for automatic eligibility for a maximum
Pell grant.
I am also pleased we were able to retain the guarantee rate on
student loans at 97 percent for all lenders through fiscal year 2012.
In this way we avoid the disruption in the student loan market and
ensure that students have access to Federal student loans. However, I
wonder if we may be going too far in cutting the support for the
largest Federal financial aid program, the Federal Family Education
Loan Program. The challenge we face is that we will not know until it
is too late whether cuts we have made have undermined the stability of
the program and created hardships for the students it serves.
Despite the emphasis on increased grant aid, the claim of increased
savings for borrowers has a hollow ring. Reducing student loan interest
rates is a good sound bite. It doesn't do anything to help students pay
tuition bills.
Further, in reality, cutting the interest rate in half, to 3.4
percent, will help only a small group of borrowers for the loans they
take out for 1 year of their education, 4 years from now. Then the
benefit disappears. That is going to be a surprise to a lot of people,
and it has already happened once. We were chastised when we were doing
the last reconciliation for a raise in the interest rates. That is
because the interest rate that had been lowered expired and there was
not the money to do the further cut. This may well happen again.
A quick calculation of the real benefit borrowers will receive shows
that at a cost of $6 billion to taxpayers, individuals, will see a
savings of only $6 a month. That may be one latte; it may be two
lattes. It is kind of hard to tell in today's market in coffee. I am
astounded. I remember the days when it was a nickel a cup. I would much
rather see the $6 billion go to help real low-income students through a
Pell grant increase than just for a hollow sound bite.
Finally, as an accountant and member of the Budget Committee, I would
be remiss if I didn't point out that we are debating a conference
report on reconciliation, and that is a process designed to reduce the
Federal deficit, not to create new mandatory programs and increase
entitlement spending. I am disappointed to say that the net savings for
deficit reduction in this conference report is only $750 million.
I wish to remind my colleagues that a few weeks ago, we considered
reconciliation and higher education reauthorization together. The
Senate did it right. We voted on reconciliation one day, and the next
voting day we had, we covered reauthorization. Both bills passed with
strong bipartisan support because we not only achieved savings but we
ensured the quality and effectiveness of our Federal student aid
programs. Therefore, my support for this conference report is limited
by the fact that we are not also considering the larger higher
education reauthorization package.
We have used this chart before when we were debating the
reauthorization. This chart shows the pieces that are left out when we
do not do the reauthorization. I urge the House to finish up this part
of the package so that it can accompany the reconciliation package. It
is not complete without both.
I do have some comments by House Ranking Member McKeon, which is an
excerpt from the conference committee when it was held. I ask unanimous
consent to have it printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
House Ranking Member McKeon Excerpt Comments From the One Conference
Committee Held
Nearly 6 months ago, the Budget Committee offered a budget
resolution that called for a lone, $75 million budget
reconciliation instruction to the Education and Labor
Committee. Eventually that figure climbed to $750 million in
required savings over 5 years--a modest improvement, but
still a mere fraction of the savings generally achieved
through budget reconciliation.
It was as clear 6 months ago as it is today that the reason
for that instruction was not to reduce the federal deficit.
It was to push through a series of changes to our Nation's
college financial aid system--changes that may or may not
have been able to garner the necessary votes outside the
confines of a budget bill.
Many of these changes are needed. Republicans took the lead
on making the student loan program more efficient two years
ago, producing a full $12 billion in deficit reduction while
increasing benefits to students. I appreciate the efforts
this year to build on that success by demanding additional
program efficiencies and redirecting those resources into the
Pell Grant program. A straightforward reform effort focused
solely on these two goals would surely have garnered broad
bipartisan support.
While I believe the intentions of the bill's sponsors are
good, I have found the process and the product to be
disappointing. When the FY 2008 budget resolution was being
debated, the Chairman of the Senate Budget Committee
cautioned that the budget reconciliation process was in
danger of being abused as a ``stalking horse'' for new
entitlement spending. Yet despite his warnings, that is
exactly what happened in the bill.
That bill represented one of the largest expansions of
higher education entitlement spending in history, with the
creation of nine new entitlement programs. I understand the
majority is considering paring back the new entitlement
spending and creating fewer new programs. While this is a
modest improvement, it still represents a diversion of
approximately $1 billion that could have, and dare I say
should have, gone to low-income students in the form of
Pell Grants.
The legislation that passed the House also included a
temporary phase-down of the interest rates on subsidized
Stafford loans. The Senate-approved bill did not include such
a proposal, instead focusing its resources on the Pell Grant
program. The conference report includes some form of the
House interest rate proposal. This, despite the fact that
temporarily reducing interest rates on some loans for some
college graduates is a costly diversion from Pell Grants, and
does nothing to assist students enrolled in school and
struggling with rising costs. Any proposal to slowly phase-
down the interest rate only to have the rate immediately jump
back up is nothing more than false promises to borrowers and
taxpayers.
First, under this proposal, it will be impossible for a
borrower to save the highly-touted $4,400. In order to save
that amount, a borrower would have to take out loans all 4
years at the reduced rate of 3.4%--an impossibility. Second,
this proposal is also a false promise to taxpayers and a
budget gimmick. If Congress decides to maintain the 3.4%
interest rate, the taxpayer will be on the hook for a
potential long-term cost of $32 billion. Finally, this
proposal does nothing to help students pay for their
education when the tuition bill is due. While I understand
that this idea may test well in polls and may well make for
good politics, it's bad policy. And everyone here knows it.
I understand the conference report is to include cuts to
the Federal Family Education Loan Program (FFELP) similar in
magnitude to those proposed in both the House and Senate
Democratic plans. These figures are based largely on the
President's budget request for the upcoming fiscal year.
However, I remain concerned that both chambers--following the
lead of the President--may be going too far in cutting
support for the largest federal financial aid program.
The challenge is that we will not know if we have cut too
deeply until it is too late, and the program and its students
suffer. Moreover, such deep program cuts could undermine the
stability of the FFELP and upset the delicate balance between
it and the government-run Direct Loan program. While I do not
dispute that reforms to the student loan program are urgently
needed, I am strongly opposed to any effort to give a leg-up
to the bureaucratic Direct Loan program in an effort to
squeeze out the private sector.
There are elements of the expected conference agreement
that I strongly support. I am particularly pleased that those
involved in the negotiations recognized the importance of
focusing on Pell Grants. I understand the agreement may
provide up to $11 billion in increased support for this
critical program. This level falls short of the approximately
$15 billion proposed by the President in his budget, but
it is a great improvement over the legislation approved by
the House in July.
There was a proposal to reduce subsidies in the student
loan program and redirect those resources to help low-income
students through increased Pell Grants. Period.
I believe that if such an approach were embraced here
today, it would receive overwhelming bipartisan support in
both the
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House and Senate, and would be welcomed by the President.
This could be a missed opportunity of epic proportions.
Although I continue to harbor serious concerns about the
proposals before us, I would be remiss if I did not thank
Chairmen Miller and Kennedy for their efforts, and
acknowledge their commitment to much-needed reform. I said
earlier--and I truly believe this to be true--that the
intentions driving this process are good and worthy. While I
remain disappointed that key opportunities may be missed, I
recognize that legislation is rarely perfect and the best
efforts of the sponsors should be commended.
Mr. ENZI. It puts the emphasis on some things that will be left out
if we do not do it and also some things that I mentioned.
I want to add some more emphasis to what is not before us today, and
that is the legislation that addresses the concerns about rooting out
the bad actors in student lending. It doesn't include protecting
students and families who are borrowing money for college, and ensuring
that students and parents receive sound, honest advice about their
student loans. Students and parents must have access to the information
they need to understand and manage their debt. We must ensure that the
investment our students and families make in terms of time and money is
a good one, that they are confident there will be financial aid to
assist continued access to a college education.
Further, it is the reauthorization bill that contains the evaluation
of the auction pilot that will help determine whether the auction model
should be used in the future to establish viable special allowance
rates. That is the way to test it.
Higher education is the onramp to success in the global economy, and
it is our responsibility to make sure everyone can access that
opportunity and reach their goals. The choice of whether to pursue a
postsecondary education is no longer an option. We need to make sure
individuals have all the tools they need to understand and shape their
future. This conference report provides some important tools but not
nearly enough to complete the job.
We are only seeing a fraction of the higher education picture by
considering the conference report separately from the larger
reauthorization package. What is before us today focuses only on a
narrow slice of the Higher Education Act, one piece which is dependent
on other foundational programs that are not part of the reconciliation.
You can see that on this chart: Reconciliation takes care of a little
bit; reauthorization takes care of the rest.
It takes important steps to increase assistance for students seeking
a college degree, but it is only a Band-Aid without the important
bipartisan reforms included in the reauthorization bill. We are cutting
the bottom line without dealing with the quality and substance of these
important programs.
The American success story of higher education is at risk of losing
the very qualities that made it great--competition, innovation, and
access for all. Our challenge is to make higher education more
accessible, affordable, and accountable. By considering only
reconciliation, we are not meeting this challenge head-on. We are
leaving the job undone.
But we need the provisions in the reauthorization bill--better
college cost information to help parents and students make sound
choices; year-round Pell to reduce time-to-degree; and FAFSA, which is
the Free Application for Federal Student Aid. It is a document that has
been rather intimidating to students as they think about filling out
this form in order to qualify for financial aid. The form itself has
kept people from applying. We have reduced that in the reauthorization
bill to a one-page document.
I reiterate, it is the reauthorization bill that contains all the
reforms and accountability provisions to address the problems that have
come to light in the loan programs--the bad actors with conflicts of
interest, the lack of useful, necessary information to enable borrowers
to make informed decisions about loan provisions and repayment, and the
need for better controls over access to the National Student Loan Data
System so borrowers' privacy is protected.
We know America's ability to compete in a global economy depends on
increasing the number of students entering and completing college. But
of the 75 percent of high school seniors who continue their study, only
50 percent of them receive a degree in 5 years after enrolling in
college and only 25 percent of them receive a bachelor's degree or
higher. These numbers are even worse for students from low-income
families. It is important to ensure that more students enroll in
college prepared to learn and that more students have the support they
need to complete college with the knowledge and skills to be
successful. Low-income students who are striving to attend college need
to know there is financial aid available for them to access college or
career and technical education. It is the reauthorization bill that has
all the support programs for first-generation and low-income students
and the institutional support programs for minority-serving
institutions.
For years, institutions of higher education and employers have
expressed their dissatisfaction about the fact that our high school
graduates need remedial help in order to do college-level work or to
participate in the workforce. Nearly one-third of entering college
freshmen take at least one remedial course. Each year, taxpayers pay an
estimate $1 billion to $2 billion to provide remedial education to
students at our public universities and community colleges.
What will help this situation? Not only do students need better
guidance selecting courses in high school that will enable them to
succeed in the postsecondary education, they need better prepared
teachers. It is the reauthorization bill that has the partnership
programs to support teacher preparation so that all children have
qualified teachers to guide their learning experiences. Also, to be
competitive in the global economy we need to be able to communicate
with people all over the world. It is the reauthorization bill that
authorizes the programs that support foreign languages and
international education.
I began my remarks by stating that I am in support of the conference
report. It is clear that I am equally committed to seeing that we
reauthorize the Higher Education Act. We need both pieces to get it
done right.
I thank Senator Kennedy for his commitment to moving the
reauthorization forward and including several Republican priorities in
this conference report. While this report is not perfect, taken as a
whole and with its emphasis on providing additional need-based grant
aid to low-income students, I believe we have reached a reasonable
approach to helping students pay for college.
I thank everyone who has been involved in the process.
I yield the floor and reserve the remainder of my time.
The PRESIDING OFFICER (Mr. Kennedy). The Senator from Ohio is yielded
5 minutes.
Mr. BROWN. Mr. President, I thank Chairman Kennedy, the Presiding
Officer now, and Ranking Member Enzi, William Jawando on my staff--the
committee's Ohio staff and all of the HELP Committee for their
excellent work on this legislation. This bill, of course, as we know,
invests in higher education. The returns on that investment will not
only accrue to students and to the education system that serves them
but will accrue to the stability, prosperity, and security of our
Nation as a whole.
We know the problem. We know what has happened in the last many years
to higher education in this country. Particularly in the last 5 or 6
years in my home State of Ohio, the cost of attendance at 4-year public
institutions has increased 53 percent. In 2001, if you graduated from
college versus going 4 years in 2007, you are paying almost half again,
this year, in this 4-year period, than the 4-year period half a decade
earlier. It has gone up almost 30 percent in the last 5 or 6 years at
4-year private institutions. At the same time, the median household
income in my State has increased only 3 percent. So as college costs
have gone up 30 percent if you go to private schools, 50 percent if you
go to a public 4-year university, the average income in Ohio has gone
up only 3 percent. You can see the gap.
The Federal Government has not been able to fill that gap. Pell
grants haven't been raised for years until this legislation. The
interest rates have continued to go up. Federal loans have
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not kept pace, neither FFELP nor the Direct Loan Program, so the chasm
has grown in terms of the kind of money working-class kids and poor
kids and middle-class kids need to go to college.
In the 2004-2005 school year, 66 percent of students graduating from
4-year institutions in my State of Ohio graduated with student loan
debt, and that debt was an average of $20,000. So two-thirds of Ohio
students graduating are burdened with an average of $20,000 in student
loan debt. That makes a big difference in career choice. That means
they sometimes cannot take the kind of job they trained for, that they
most want, because it doesn't pay the bills as well as another job
might.
A generation ago, it was very different. As Senator Kennedy and I
have talked, I told him my wife a generation ago graduated from Kent
State University, a working-class kid, the first one in her family to
go to college. Her father carried a union card at Cleveland Electric
Illuminating Company for 36 years as a utility worker, but she was able
to graduate from Kent State, getting a bachelor's degree in journalism
with grants, loans, and very little debt when she graduated so she
could pursue the kind of opportunities she had chosen to.
Looking from 30 years ago to today and the difficulties that the
middle-class and working-class and poor kids face going to college,
that is why this bill matters, the dramatic increase in Pell grants,
the lowering of interest rates, the loan forgiveness which Senator
Kennedy has talked about at length--what that means is assistance for
teachers and nurses and all kinds of public servants to serve the
community.
This seems to be a generation of idealism, and we will see those
students be able to pursue a career in public service and be able to
take those jobs, sometimes--often--at lower pay, but be able to relieve
themselves of the huge burden of debt they face. That is why this bill
matters so much.
This bill is a major step. We know we have more work to do.
Senator Enzi has said several times that we have got to pass the
other legislation with the reauthorization. He is right about that. We
all agree with that. That will help on some issues such as simplifying
the loan form for those prospective students filling out their
applications for student loans and for grants.
We also know this growth in the cost of college, as I said earlier,
the cost in State universities in Ohio has gone up 50 percent, wages
have gone up for an average family only 3 percent in this decade. The
Federal Government has not kept up. That means an awful lot more
students have turned to the private loan system and have had to face
interest rates of 10, 12, 15, sometimes as high as 18 percent. They
graduate from college, private or public, with a huge, even larger
burden because of those high interest rates. We need to address that in
the future as the private loan system has grown more and more and more.
I close by thanking the entire committee, Senator Kennedy, Senator
Enzi, for taking up this extremely important legislation. All students
should be able to afford college in this country. This bill is a step,
a major step in that direction. I thank all the fellow Senators who
have been so involved in this issue.
The PRESIDING OFFICER. The Senator from New Jersey is recognized for
5 minutes.
Mr. MENENDEZ. Mr. President, I rise in support, strong support, of
the higher education reconciliation conference report before us. The
bill represents a remarkable achievement this body, and this Congress,
should be proud of. The billions of grant aid in this bill will make a
tremendous difference for students across the Nation, students who are
struggling to stay afloat because of the cost of college, students who
are saving every last penny in the hopes they can achieve their dreams
of college.
The passage of this bill will make a change in the tide in Congress.
It proves to students that when we say we will work to make college
more affordable, we mean it. This bill shows them that when we say we
understand the obstacles they face to finance a college education, we
are not throwing words around.
This bill will confirm that when we say student loans should work for
students, we mean it. This Democratically led Congress laid out strong
principles for how we should improve access to a college education.
With this piece of landmark legislation, we are putting those
principles into action. This bill is no small feat. Not since the
passage of the GI bill has a piece of education legislation made this
big of an investment in students' aid.
Now, this historic moment could not have been possible without the
leadership of Senator Kennedy, who has once again stood up for the
Nation's students by engineering and moving this bill forward. I also
wish to thank Senator Enzi as the Republican leader on the committee
who worked so quickly to finalize this important bill.
The bill could not come at a more critical time. Nationwide, the
lowest income students at 4-year colleges face roughly $5,800 in unmet
need after a standard financial aid package, after their loans, and
after the amount their families contribute. To put it simply, for the
neediest students all across the country, current aid has not kept up.
Students of my home State of New Jersey are no stranger to the
skyrocketing cost of a college education. In fact, within the past 5
school years, the cost of attendance, including tuition, fees, room and
board at 4-year public colleges in New Jersey has increased by almost
50 percent.
Unfortunately, family household incomes have not kept up with these
rising costs. Even after financial aid is taken into account, nearly 40
percent of median family income in New Jersey is needed to pay for 1
year of college at 4-year public colleges. It is simply unbearable for
our students. The result is some of our Nation's brightest students are
locked out of a college education simply because they cannot afford it.
I am pleased this legislation will reverse that troubling trend for
all our students and families across the country by adding billions
into new grant aid. Next year alone, New Jersey students will see more
than $40 million in new grant aid. Over the next 5 years, students in
my State will have access to more than 400 million Federal grant
dollars because of this bill. Grant dollars equal access for many of
today's college students.
The bill reduces subsidies to student lenders and gives it back to
our students. It is about time. For far too long, students struggling
to afford college have seen their grants shrink, their loan rates go up
and their debt explode after graduation. More than 60 percent of New
Jersey students graduate with loan debt that averages $16,000. That is
not a manageable amount of debt for a 21-year-old college graduate. It
is an unfair burden.
That is why I am proud of the bill, because it will help lessen the
burden on our students. It will put money directly where it is most
needed, into Pell grants and other critical financial assistance that
benefits our Nation's students. From here on, millions of young people
across the Nation will have the opportunity to see their dream of a
college degree come true.
They will have access to the key that will unlock their own economic
empowerment, build a successful career, and succeed in a global
economy. Today we have an opportunity to move critical legislation
forward to be signed into law, so the doors to college will be open for
all students. In the global economy we live in today, we clearly cannot
afford as a nation to have our students priced out of a college
education.
As someone who grew up poor, the son of immigrants, the first in my
family to go to college, I know the power of the programs we are ready
soon to vote on. I would never have attended St. Peters College, I
would have never gone to Rutgers Law School without the power of key
Federal grant programs such as Pell and Perkins, I certainly would not
be standing with you today on the floor of the Senate had it not been
for Federal financial aid.
I wish to ensure that is a birthright for all our students across the
Nation, regardless of the happenstance of where they were born in life.
I urge my colleagues to support the bill.
I yield the floor.
The ACTING PRESIDENT pro tempore. Who yields time?
Mr. ENZI. Mr. President, I yield 10 minutes to the Senator from New
Hampshire.
[[Page S11246]]
Mr. GREGG. Mr. President, the bill before us today from a policy
standpoint does some things which are extremely positive. It adjusts, I
think appropriately, the cost of the amount of subsidy that is going
into the system relative to higher education loans and takes savings
from that subsidy, which was going to lenders, and moves it over to
assist people who need assistance, especially under the Pell Grant
Program.
So it is, from a policy standpoint, moving in the right direction in
many ways. In addition, as the Senator from Wyoming has pointed out,
there needs to be tied to this a Higher Education Reauthorization Act,
which unfortunately is not in this bill and needs to be in this bill in
order to complete the package. That is critical to this whole
undertaking in making sure we significantly improve our ability to
support people who are going to college, making sure the loans which
these people get are properly disclosed and that the money does not end
up, as we increase the Pell grants, being taken away by increasing
tuitions which are tied to our Pell grant increases.
So there are good things about this bill. There is also a big part of
this bill that is missing, which is the Higher Education
Reauthorization Act, and certainly the Senator from Wyoming made an
eloquent statement on that.
What I wished to talk about, however, was the fact that this bill
comes to the floor in an inappropriate way, using the wrong vehicle,
and as a result deems serious harm to the budget process we have in the
Congress. This bill comes under what is known as reconciliation.
Reconciliation is a very unique vehicle which we have in the Senate,
the purpose of which is to avoid filibusters and allow legislation to
move, which is going to be used on the spending side of the ledger, at
least, to reduce entitlement spending.
It was created out of the 1974 Budget Act. It has been used over the
years for the purposes of reconciliation, of reducing entitlement
spending. In fact, in 1990, it reduced entitlement spending--it was
used to reduce about $480 billion in entitlement spending over a 10-
year period; in 1993, about $433 billion; in 1995, about $337 billion;
in 1997, about $118 billion; and then in 2006, about $36 billion. Why
do we use this mechanism? Well, every year we have two different types
of spending in the Federal Government. We have discretionary spending,
which means it occurs on an annual basis and is appropriated, it goes
through the Appropriations Committee. That represents about a third of
the Federal Government spending. Then we have entitlement spending,
which is spending that occurs where the Federal Government, as a result
of laws, has an obligation to pay money to somebody.
Agriculture programs are, for example, entitlement programs, where if
you plant a certain amount of fields or do not plant a certain amount
of fields, you have a right to obtain payment from the Federal
Government under the law. Medicare is an entitlement program. We have a
lot of education programs which are arguably entitlement programs and a
lot that are discretionary programs.
But the problem is, when you have an entitlement program, you cannot
adjust it annually through the appropriations process. The only way you
can adjust it is by changing the law which affects that program and
creates savings or more spending. So the Budget Act recognized this and
also recognizes it is extremely hard to do that in the context of the
Senate because the Senate has the filibuster, where you can basically
tie anything up without 60 votes. It also requires 60 votes to pass
just about anything.
So this very unique and very powerful instrument was given to the
budgeting process called reconciliation, where there is a limited
amount of time to debate a bill, in this case 10 hours as a result of a
conference report, no filibuster can apply, and it only takes 51 votes
to pass the bill.
But this whole concept of giving this very strong power to the Budget
Committee and to the committees of jurisdiction was to allow us to
reduce the rate of growth of entitlement spending in order to make the
budget more manageable.
What has happened, however, has been to reverse that, to actually do
the exact opposite using reconciliation, with the representation that
we are going to save, I believe it is $750 million, which is
minuscule--remember that over the years we have been saving billions of
dollars through reconciliation--with the representation that we are
going to save $750 million. We have a chart which reflects this. These
are savings which we have received under reconciliation when we have
used it in the past: $428 billion; $433 billion; up until 2006, we did
$39 billion.
This year, this reconciliation bill, saves less than $1 billion net.
So it is not a savings vehicle at all. In fact, what it does is it uses
that $93 billion savings to mask an almost $21 billion spending event.
It takes the reconciliation--as long as you get a net savings, you
are allowed to use reconciliation--and uses it to dramatically increase
spending. In fact, the amount of new spending in this reconciliation
bill exceeds the amount of savings by 2,900 percent. In other words,
the spending in this bill is 29 times larger than the savings in this
bill, which totally undermines and makes a joke out of the budget
process and reconciliation, and it is totally inappropriate to have
done this, to use reconciliation in this manner.
It could be effectively argued the proposals that have been brought
forward under this bill would easily pass this Congress with 60 votes,
with or without reconciliation. But by using reconciliation, they
allowed themselves to eliminate all amendments, for all intents and
purposes of any significance, and they have this 51-vote rule, and as a
result of spending 2,900 times more than they save, they essentially
make a mockery of the budget process.
Not only do they make a mockery of the budget process on the issue of
reconciliation, they make a mockery of the budget process by the manner
in which they score the bill itself. This bill is set up so the Pell
grants will increase, which is what the goal of the bill is, to $5,400
per person, but the spending on the Pell grants will also increase
rather dramatically over the next few years because we are taking a
subsidy which is now going to lenders and putting it into Pell
spending.
But in the year 2013, under this bill, we are going to go back to
zero, essentially zero dollars being spent on Pell grants. That is what
this bill calls for in 2013, zero dollars essentially will be spent on
Pell grants.
What a farce. I mean, really. In order for them to take advantage of
reconciliation and the protection of reconciliation, they had to put in
place a program which goes from almost $5 billion in the year 2012,
down to zero in 2013. Talk about truth in budgeting or integrity in
budgeting. How can anybody vote for this who believes we should have an
honest budget and claim that they are being honest?
There is $9 billion of Pell grant, which one could realistically
argue over the next 10 years is going to have to be spent, which isn't
accounted for. It is sort of, well, it will appear from the sky, I
guess. One would think that would be enough; that basically the
proposal makes a mockery of the reconciliation process in the budget,
makes a mockery of the baseline by going back to zero spending in 2013.
But then we get to pay-go; pay-go, the sacred cow of fiscal discipline
from the other side of the aisle that we hear so much about. We are
going to stand by pay-go in order to discipline Federal Government
spending. We heard that incessantly in the last Congress from the other
side of the aisle. We heard it incessantly from people running for
office from the other side of the aisle. But it has become Swiss cheese
as bill after bill after bill has been brought to the floor which has
waived pay-go when it came to spending. What a surprise. The Democratic
majority waives pay-go when they want to spend money.
I ask unanimous consent for an additional 3 minutes.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. GREGG. Then they claim they are using pay-go to discipline the
Federal Government. It has happened time and time again. The most
recent egregious event prior to this one was SCHIP, where they added
$41 billion of new spending waiving pay-go. This $6 billion down here
that was a pay-go violation has now grown to be about
[[Page S11247]]
$20 billion under this bill. So the little hole in the Swiss cheese
should be a great big hole.
Anyone who comes to this floor and claims they are using pay-go to
discipline the Federal budget at any time for the rest of this Congress
will have to have a sanity test given to them because they certainly
can't defend that on the basis of any facts.
The problem with this bill isn't the policy. In fact, quite honestly,
I would have probably used a more aggressive policy. I would have been
willing to auction all these accounts to get to the real number as to
what the subsidy is. We might have saved a lot more money and put more
money into Pell. The problem is, this bill, in the manner in which it
is brought to the floor, basically puts a stake through the heart of
the budget process. It takes reconciliation, which is the most
significant tool of the budget process, and makes a joke out of it by
using it to increase spending 2,900 times more than it creates savings.
It takes the baseline and makes a joke out of it by reducing Pell
grants in 2013 to zero spending, when we know we are going to be
spending $5.5 billion on Pell grants in 2013. It takes pay-go, which is
alleged to be a disciplining mechanism, waives it, and then spends $21
billion that would have been subject to it.
My point is obviously one of frustration, as former chairman of the
Budget Committee. I would like to see us have a budget that means
something. We didn't pass a budget. The Democratic Party passed a
budget; I congratulated them for that. I didn't agree with it, but at
least they passed it. But if they are going to pass it, they ought to
have a purpose for it, and they ought to live by it. The purpose should
not be to expand spending, to make a joke of the baseline, and to
basically put holes in the pay-go mechanism which they claim is the
essence of their fiscal discipline.
From a public policy standpoint, the bill may have good policy in it,
but from the standpoint of managing the fiscal house of this country,
it is doing fundamental harm to the budget process.
I yield the floor.
Mr. KENNEDY. Mr. President, how much time remains?
The ACTING PRESIDENT pro tempore. The Senator from Massachusetts has
17 minutes 49 seconds.
Mr. KENNEDY. I yield 8 minutes to the Senator from Illinois.
The ACTING PRESIDENT pro tempore. The assistant majority leader is
recognized.
Mr. DURBIN. I say to my friend from New Hampshire, who is leaving the
Chamber, I am sorry he is leaving. This water is put on our desks by
our loyal, dutiful pages every day. Sometimes I want to check this
water because I think perhaps imbibing it leads to political amnesia.
The longer you drink the water on the floor of the Senate, the more you
tend to forget reality and forget what has happened.
I just listened to a speech by the Senator from New Hampshire talking
about deficits and reconciliation bills. The bill we have before us
today, the most dramatic increase in student aid ever in the history of
the United States, does not add to the deficit. We pay for it. What the
Senator from New Hampshire, whom I respect and like very much, fails to
acknowledge is that when he was chairing the Budget Committee, when
these reconciliation bills would come to the floor, they would add
dramatically to the deficit every year. In fact, we have totaled it up.
Over the last several years--2001, 2003, 2005--the Republican
reconciliation bills added $1.7 trillion to the deficit. Now they come
and rail against the deficits.
This bill before us today is a bill that is paid for. It is paid for
by taking subsidies away from student loan companies. Do you know what
happened the last round in reconciliation? They ended up taking about
$12 billion in help away from students and giving it to the wealthiest
people in America in tax cuts. Talk about reverse Robin Hood, not only
adding to the deficit but taking money away from students, raising the
cost of their loans, and then giving that money in tax cuts to the
wealthiest people. That was the politics that was rejected in the last
election.
My friends and colleagues are making speeches believing that we don't
have this written down somewhere about what actually happened, but we
do. I am afraid my colleague has forgotten some of the most important
things that happened under his watch and their watch, which was to add,
in three reconciliation bills, $1.7 trillion to the deficit.
Mr. GREGG. Will the Senator yield for a question?
Mr. DURBIN. I will when I have finished. This may be the single most
important bill we pass. Most of us realize if there is one thing in
America that gives you a chance to succeed, it is education. We can't
guarantee to our children that they will be successful or wealthy or
happy in life, but we can give them a chance. The best chance we can
give them is to let them go to school and progress along and go to the
best schools they can attend.
I happen to be standing here today because 50 years ago, somebody in
the United States House of Representatives decided that because the
Russians had launched Sputnik and frightened us with the prospect of
losing the war in space, we needed to give more young kids a chance to
go to college. So college, which had been kind of an elite opportunity
for the wealthy and the sons and daughters of those who graduated from
colleges in the past, was now expanded and democratized.
In the 1960s, kids, such as myself, from east St. Louis, IL, had a
chance to go to great universities such as the one in town that I went
to named Georgetown. I didn't have any money. I borrowed it from the
National Defense Education Act. What a deal. Pay it back over 10 years
after you graduate, and at a 3-percent interest rate. It worked. I got
my college degree and my law degree. I paid back my loans, and the
money was there for the next generation.
Now what has happened to the cost of college education? It has gone
through the roof. I just sat down with a couple kids from colleges in
Chicago. I said to a junior and a senior: How much debt will you have
when you graduate? The junior said: I am at $35,000 right now. The
senior said: I will be at $45,000 when I graduate.
Those figures, unfortunately, are not unique. More and more students
are ending up with debt.
I say to Senator Kennedy and to my good friend and close colleague,
George Miller of California, they have done a great favor for America
and for America's families. What they have done with this bill is to
expand Pell grants, which are basic grants to kids whose families don't
have a lot of money, for the first time in 5 years. For 5 years these
Pell grants have been frozen. Now they are going up. Then they have
come up with unique ways to reduce the burden of student loans so that
young people who sign on the dotted line so they can go through another
year of school, never thinking what this means 10 or 20 years from now,
are going to pay dramatically less in interest.
George Miller and I introduced a bill that cut the interest rate on
student loans from 6.8 percent to 3.4 percent. It is included in this
important bill we are going to pass today. Think about that for a
minute. If you think of it in terms of your home mortgage, what if you
could cut your interest rate in half, from 6.8 to 3.4. You are going to
pay off that loan sooner. You will pay less in interest.
They have another provision in here that is dramatic and ingenious.
If a young person coming out of college with student debt agrees to
take a job as a nurse or a teacher or a social worker, things we need
more young people to dedicate their lives to, we are going to forgive
their loans more quickly. We are going to limit the amount of money
they have to pay back each year on the loan. Then in 10 years, the
student loan is erased, if they will go into teaching. This is a
dramatic commitment we have made to young people to go into jobs and
professions that are so important for our future.
We give a lot of speeches here about how much we love this country
and how much we want to see it succeed. The real test is whether we are
prepared to invest in our children. This bill invests in our kids. This
bill takes money that might otherwise have gone for tax cuts for the
richest people in America, which was the pattern that was building
around Congress, and instead invests in working families and
[[Page S11248]]
their kids. It says to a child: If you are good enough to get in a good
university, if you will work hard and succeed and get a degree, even if
you have debt, at the end of the day, we are going to stand by you. We
are going to give you a chance to pay that debt off in a reasonable way
and to pick the career and life that you want. Don't take the job that
pays the most money because you can pay off your debt. Take the job
that your heart is attached to.
I remember running into a science teacher in the suburbs of Chicago,
a young woman fresh out of college. She was so happy to be teaching
math at this great high school. I said: Is this what you wanted to do?
She said: No. I wanted to teach in an inner-city school, but I couldn't
do it because they don't pay as much money. I have student loans, you
know. They pay me more out here in the suburbs, and I can pay off my
loans and buy a car. So I made that choice. I wish I didn't have to,
but I made that choice.
Repeat that story a thousand times, see that teachers who could have
gone into areas where they are desperately needed now have a chance to
succeed.
I tell my colleagues, as I look back on the things that made a
difference in my life, laws that were passed that really changed my
life, when this Congress made a commitment to loans to kids from
families such as my own, at that point in time they gave me a chance. I
stand in this Senate today because of it. Senator Kennedy, Senator
Enzi, Congressman Miller, and others are going to provide those
opportunities for thousands of young American kids.
I yield the floor.
The ACTING PRESIDENT pro tempore. The time of the Senator has
expired. Who yields time?
Mr. ENZI. I yield an additional 3 minutes to the Senator from New
Hampshire.
The ACTING PRESIDENT pro tempore. The Senator from New Hampshire.
Mr. GREGG. I appreciate the Senator from Wyoming yielding to me. I
know the Senator from Illinois would have yielded for a question, but
his statement carried him away. Please note, I have no water on my
desk--not by choice but I suspect that they don't trust me with it. I
was glad to learn that it is the water that has caused the
dysfunctionality of the Senate. I had been beginning to think maybe it
was the Democratic leadership, since the change of hands. But getting
this clarified is very important.
I do want to make this simple point: Pell grants were expanded
through SMART grants when we did the last reconciliation, when I was
chairman of the Budget Committee. We put $8 billion in the SMART
grants, which helped kids, especially freshman and sophomores. We
eliminated the origination fees, and we also increased the auto zero to
$20,000, and we increased the asset protection allocation. So we did
make these decisions. But at the same time we reduced the funds to
lenders and put a significant amount of it into deficit reduction, $40
billion into deficit reduction.
The Senator from Illinois takes the position that when we cut taxes,
we were having the same impact on the budget as when they increased
spending. That is the difference between the parties. It is
fundamental. We believe when we leave people's dollars in their pockets
and they get to spend it themselves--because it is their money to begin
with--that is not necessarily aggravating the Federal budget situation.
They believe when you take the money out of people's pockets and expand
the size of the Government--in this case, 2,900 times more than you
save in the area of spending reduction--that is good, because there is
a philosophical difference here.
The philosophical difference, quite simply, is the Democratic Party
believes it knows better how to spend people's money than the people
know how to spend their money. We believe the people know how to better
spend their money better than the Federal Government does. That is the
difference.
Mr. DURBIN. Mr. President, will the Senator yield for a question?
Mr. GREGG. Well, Mr. President, first I would like to complete my
thought on this point because I think it is critical. The budget
reconciliation process was not set up to be a stalking-horse for
dramatic expansion in the size of Federal Government entitlement
programs. That was not the purpose of the reconciliation structure. It
was set up for the purposes of being able to control the rate of growth
of entitlement programs.
Now, we can debate whether the budget process was set up for the
purposes of allowing us to return more tax dollars to taxpayers with
reasonable tax rates, but certainly on the issue of spending, there is
no question but that reconciliation was not intended to expand
entitlement spending.
independent students
Ms. LANDRIEU. Mr. Chairman, I would like to ask my friend, the senior
Senator from Massachusetts, for clarification of language in the
conference report. On page 60, the report refers to the definition of
an independent student for purposes of determining financial aid
eligibility. The current law was amended to allow students who are
orphans, in foster care or wards of the court or who were orphans, in
foster care or wards of the court any time after the age of 13 to be
considered independent students. I would like to ask the Senator to
clarify that individuals who were orphans, in foster care or wards of
the court when they were 13 years of age or older but no longer orphans
in foster care or wards of the court when applying for college will
still be considered independent students.
Mr. KENNEDY. Mr. Chairman, the senior Senator from Louisiana is
absolutely correct. The conference report does indeed make that change
in the law. And I can assure the senior Senator from Louisiana that we
will further clarify this language in the upcoming conference report
for the Higher Education Amendments of 2007--S. 1642.
Ms. LANDRIEU. I appreciate that clarification. I believe we should
modify the language to be more clear on this point. I believe it should
read ``(B) is an orphan, in foster care, or a ward of the court, or was
an orphan, in foster care, or a ward of the court at any time when the
individual was 13 years of age or older;''.
Mr. KENNEDY. I agree and I assure the senior Senator from Louisiana
that we will make this change in the conference report for the Higher
Education Amendments of 2007, S. 1642.
definition of not-for-profit lender
Mr. ALEXANDER. Mr. President, I thank my colleagues, especially
Senators Kennedy and Enzi, as well as their staff, in working together
during discussions on the College Cost Reduction and Access Act to
recognize the work of nonprofit loan providers and the services they
provide to students and States.
I would like to clarify with my colleagues the committee's intent
regarding one of the provisions that relates to these nonprofit loan
providers. It is my understanding that nonprofit entities that use
eligible lender trustees to provide Federal loans to students--such as
the one in my State, EdSouth--will benefit from the special allowance
payment for not-for-profit holders in this bill. The language in this
bill allows an eligible lender trustee acting on behalf of a nonprofit
entity to be eligible to receive this payment on behalf of the
nonprofit entity, as long as such nonprofit entity was acting as the
beneficial owner of Federal student loans on the date of enactment. I
ask Senator Kennedy and Senator Enzi whether my understanding of the
provision is, in fact, what was intended by the bill.
Our staff has all worked carefully on the language to ensure that the
legitimate efforts of nonprofits can continue, without opening up
loopholes that would allow for-profit entities to benefit from the
special allowance payment differential.
I thank my friends for their time today and again appreciate their
efforts.
Mr. KENNEDY. Mr. President, I thank my friend from Tennessee. As I
have stated previously, this bill reflects the priority of several of
our Members by recognizing that nonprofit lenders in their States make
important contributions in their States. My colleague is correct, it is
the intent of this legislation to allow nonprofit entities that provide
Federal student loans through an eligible lender trustee to benefit
from the differential special allowance payment, as long as the
nonprofit pays no more than reasonable
[[Page S11249]]
and customary fees to the trustee that holds the loans in trust for the
benefit of the nonprofit entity and as long as the nonprofit was the
sole owner of the beneficial interest in the loans on the date of
enactment. I commit to continue to work with my friend in the future to
make any necessary clarifications with respect to this provision.
Mr. ENZI. I, too, thank Senator Alexander for his commitment to
students in his State and across the country, and to the public purpose
mission of nonprofits, such as EdSouth and, in my home State of
Wyoming, the Wyoming Student Loan Corporation. I appreciate him taking
the time to clarify this issue. I, too, agree with my colleague
regarding his explanation of the intent of the bill with regard to
nonprofit entities that provide Federal student loans through eligible
lender trustees. And I join Chairman Kennedy in his commitment to make
any further clarifications necessary to ensure that existing nonprofit
loan providers that use eligible lender trustees will be able to
benefit from the differential special allowance payment.
(At the request of Mr. Reid, the following statement was ordered to
be printed in the Record.)
Mrs. CLINTON. Mr. President, I would like to thank Majority
Leader Reid, HELP Committee Chairman Kennedy and ranking member Enzi
for their leadership in increasing college access for millions of
students and ensuring America stays competitive in the global economy.
I am proud to join them in this effort.
This legislation comes at a time when the rising cost of college is
making it tougher for all students who want to go to college to attend.
Those who do attend college are borrowing twice what they would have
borrowed 10 years ago. That is why I am pleased this legislation will
increase Pell grants up to $5,400 in the next 5 years, providing
hundreds of millions in increased grant aid to New York students over
the next 5 years. It is no secret to anyone that the purchasing power
of the Pell grant has declined dramatically in recent years. This
package not only provides a dramatic increase in the Pell grant, but
also raises the automatic-zero expected family contribution threshold
to $30,000, making more students from needy families eligible to
receive the maximum grant award. This conference report cuts the
interest rate for certain student loans in half from 6.8 percent to 3.4
percent, saving our student borrowers hundreds each year on their
student loans.
The mathematics of rising college costs are simple. More students are
taking on more debt. I am pleased to join my colleagues in taking these
critical steps to increase college affordability and access for all
students. I am thrilled to support a conference report that will help
low- and middle-income students meet the cost of college. Last
November, Democrats made a promise to reduce the cost of college for
our student borrowers and today we have delivered on that promise.
Under the management of Chairmen Kennedy and Miller, the House and
Senate have reached an agreement that provides $20.2 billion in student
aid, nearly $3 billion more than the original Senate Reconciliation
package passed in July of this year. I am very pleased the College Cost
Reduction and Access Act tackles an issue addressed in legislation I
sponsored The Student Borrower's Bill of Rights by providing
protections for student borrowers while they repay their loans. It does
so by capping monthly loan payments at 15 percent of the borrower's
discretionary income and providing several important protections to
members of the Armed Forces and public service employees during
repayment. Under this provision, for example, a starting teacher in New
York with the state average student loan debt can have his or her
monthly payments reduced by 21 percent. This savings will prove
critical to helping students manage their debt, especially in the first
few years after they graduate.
I hear from many young people in New York and around the country, who
want to be teachers, police officers, nurses, social workers and public
defenders, but sadly are so straddled with debt, such careers are not
an option for them. This is the wrong policy; and today, we send the
message that we want to encourage more young people to go into lower
paying public service jobs. I am pleased this bill creates a new loan
forgiveness plan through the direct loan program for public service
employees. Under the loan forgiveness program the remaining loan
balance on a loan is forgiven for a borrower who has been employed in a
public sector job and making payments on such loan for 10 years. Under
the loan forgiveness for public service employees provision, a public
school teacher in my State with $19,000 in student loan debt will not
only have his loan repayment capped at 15 percent, but could save
nearly $8,000 on his loan after teaching for 10 years. I strongly
believe this program will help to fill the void in public service our
nation will soon face as our baby boomer generation sets to retire by
providing an incentive for college graduates to pursue lower paying,
but vital professions.
The College Cost Reduction and Access Act helps make higher education
more affordable, and that is good economic policy, good social policy,
and good budgetary policy. I am proud Congress has chosen to make this
groundbreaking investment in our students.
Mr. REED. Mr. President, I rise today in strong support of H.R. 2669,
the College Cost Reduction and Access Act of 2007.
This important legislation, which I helped craft as a member of the
Senate Education Committee and as a conferee, will make a substantial
Federal investment in need-based grant aid for low-income students, and
will significantly help middle-class students and families pay down and
manage their loan debt.
Under this bill, the maximum Pell grant for eligible students will be
increased by $500 next year and to $5,400 by 2012. This means that
Rhode Island students will receive $7.8 million in additional grant aid
next year and nearly $85 million over the next 5 years, increasing the
average Pell grant in Rhode Island by $360 in 2008 to $2,880.
H.R. 2669 also includes provisions to stem the increasing numbers of
middle-class families falling further into debt to finance a college
education. As such, this bill phases in a lower interest rate on new
subsidized Stafford loans to undergraduate students, reducing the rate
in half over 4 years on such loans from 6.8 percent to 3.4 percent;
helps students manage their debt by capping monthly Federal student
loan payments at 15 percent of a borrower's discretionary income; and
provides loan forgiveness for borrowers who continue in public service
careers for 10 years, including nurses, teachers, and librarians.
I am especially pleased that this legislation includes provisions
from my FAFSA Act--S. 939--to increase the income level at which a
student is automatically eligible for the maximum Pell grant, ensuring
that all students from families with incomes of $30,000 or less receive
the maximum Pell grant. This automatic-eligibility level would also be
tied to the Consumer Price Index to ensure that the benefit keeps pace
with inflation and does not become diluted.
The College Cost Reduction and Access Act of 2007 also includes
provisions I authored to double the income protection allowance for
dependent students from $3,000 to $6,000 over 4 years and increase the
income protection allowance for independent students, including adult
learners and veterans, by 50 percent over 4 years. These increases will
protect students who have to work during college so they can earn more
without having it count against their financial aid.
This is significant legislation for families in Rhode Island and
across the Nation, and I strongly urge its passage. I want to thank
Senators Kennedy and Enzi, and their staffs, for their work on this
bill. I also look forward to building on this legislation by working
with my colleagues in the House to craft a final Higher Education Act
reauthorization bill in the coming weeks that would, among other key
components, include provisions I authored in the Senate version of the
reauthorization bill to improve the Leveraging Educational Assistance
Partnership or LEAP program; simplify the financial aid process and
forms; and strengthen college teacher preparation programs. These two
bills combined will tackle the twin goals of access and affordability
for students and families and help ensure that our Nation remains
competitive in today's global economy.
[[Page S11250]]
Mr. CARDIN. Mr. President, I rise today in strong support of the
conference report to accompany the College Cost Reduction and Access
Act now before the Senate. The conference report and the underlying
bill make extraordinary progress on one of the most critical challenges
before this Congress: making college affordable for all our Nation's
deserving students.
We all know that education plays a crucial role in helping people
pursue the American dream. That term was first used by James Truslow
Adams in his book ``The Epic of America,'' which he wrote in 1931
during the Great Depression. He wrote:
The American Dream is that dream of a land in which life
should be better and richer and fuller for everyone, with
opportunity for each according to ability or achievement. . .
. It is not a dream of motor cars and high wages merely, but
a dream of social order in which each man and each woman
shall be able to attain to the fullest stature of which they
are innately capable, and be recognized by others for what
they are, regardless of the fortuitous circumstances of birth
or position.
Congress passed the Higher Education Act in 1965 to help all
Americans ``attain to the fullest stature of which they are innately
capable.'' Millions of students have gained access to higher education
due to the financial assistance programs, including Pell grants, this
historic legislation created.
The problem now is that tuition costs are rising rapidly, wages are
stagnant, and Congress hasn't kept up in terms of providing the funding
necessary to bridge the gap. In my home State of Maryland, for example,
in the 5 years between the 2000-2001 and 2005-2006 school years, the
cost of attending 4-year public colleges increased 36 percent, from
$10,846 to $14,793. But the median household income in Maryland
increased just 11 percent. Even after financial aid is taken into
account, 32 percent of the median family income in Maryland is needed
to pay for just 1 year at a 4-year public college.
The effects of this disparity between college costs and family income
are devastating. Each year, more than 400,000 talented, qualified,
hopeful students cannot attend a 4-year college because, they cannot
afford it. When I was a young man, such a person might have had other
viable options for making a decent wage and pursuing a fulfilling
career. But today, 60 percent of new jobs require some postsecondary
education, compared to just 15 percent of new jobs when I was a
student.
Those students who do go on to college are becoming more and more
dependent on private loans which carry high interest rates to finance
their education. In 1986-1987, the maximum Pell grant covered 39
percent of the average public 4-year college tuition in Maryland; in
2005-2006 it covered only 27 percent. This decline is due, in part, to
a shift of a great portion of Federal spending on student aid from
grants to loans: 30 years ago, 77 percent of Federal aid to students
was in the form of grants, and only 20 percent was in the form of
loans. By the 2005-2006 school year, this distribution pattern had been
reversed, to 73 percent of aid taking the form of loans and 20 percent
coming in grants.
Just 15 years ago, fewer than half of all students took out loans to
finance their education. That number must seem incredible to today's
students and parents struggling to finance a college education because
today more than two-thirds of students borrow for college. In Maryland,
53 percent of students graduating from 4-year institutions in 2005
graduated with debt. The average student graduating from a 4-year
college in Maryland that year owed $14,822 in student loan debt.
The growing barriers to higher education also have a profound effect
on our national economy. We do not have enough highly skilled workers
in this country. We recruit overseas to find engineers, computer
programmers, and scientists. Nor can we fill essential social service
positions. More and more students avoid critically important career
paths such as teaching, nursing, social work, and law enforcement.
These are some of the most important professions in our country but
lower starting salaries are a distressingly powerful disincentive:
nationally, nearly a quarter of public 4-year college graduates and
over a third of private 4-year college graduates have too much debt to
afford a starting teacher's salary. Over half of those graduating from
private colleges have too much debt to enter the social work
profession. Debt levels are also causing graduates to delay buying a
home or a car and postpone marriage and having children. Such decisions
have important ramifications not just for the individuals involved, but
for society as a whole.
As a member of the Budget Committee, I worked hard with my colleagues
to make more money available for grant aid. We allocated $9.2 billion
for education and training over and above the President's budget
request to be invested, in part, in Pell grants. We believe such an
investment will make college more affordable so that all eligible
students can gain the knowledge, skills, and experience they need to
succeed, and to ensure that employers have the workforce they need to
compete in a fiercely competitive, global marketplace.
The important legislation before us today takes essential steps to
reverse our current course. The College Cost Reduction and Access Act
will make college more affordable by: Increasing access for low-income
students by increasing the maximum Pell grant from $4,310 to $4,910
next year and to $5,400 by 2012, and simplifying the financial aid
process for low-income students by increasing the income level at which
a student is automatically eligible for the maximum Pell grant; easing
the burden on borrowers by cutting student loan interest rates in half,
from 6.8 percent to 3.4 percent for undergraduate students with
subsidized student loans; protecting borrowers by capping monthly
Federal loan payments at 15 percent of discretionary income; protecting
working students and ensuring they are not penalized by increasing the
amount of student income that is sheltered from the financial aid
process; and encouraging public service by providing Federal loan
forgiveness for public service employees.
The College Cost Reduction and Access Act would increase access to
and preparation for college by both restoring funding for Upward Bound,
a key college access program, and creating college access challenge
grants to increase college outreach activities in every State.
The legislation strengthens minority serving institutions with an
additional $500 million investment. Despite tremendous challenges and
limited resources, minority serving institutions are responsible for
educating many of our Nation's minority students who would not
otherwise obtain a degree. Increasing Federal investment will allow
these institutions to provide a better education to more students.
But it is not enough to offer more aid. Recent investigations have
shown that private lenders have been exploiting the student loan
system, to the detriment of the students the system is meant to serve.
The College Cost Reduction and Access Act will ensure that the student
loan system works for students and saves taxpayer dollars by directing
unnecessary lender subsidies to student aid and injecting competition
into the loan program.
In addition, this legislation will help ensure that more students are
prepared for college by helping to provide good teachers to the schools
where they are needed most. According to research, teacher quality is
the schooling factor with the most profound effect on student
achievement. Good teachers can make up to a full year's difference in
learning growth for students and overwhelm the impact of any other
educational investment, including smaller class sizes. Unfortunately,
our educational system pairs the children most behind with teachers
who, on average, have less experience, less education, and less skill
than those who teach other children. We will only close student
achievement gaps when we improve teacher quality and experience. We
must make obtaining advanced training and experience in teaching more
accessible and teaching at-risk students more desirable. I have
introduced a bill, S. 1282, which Senators Snowe and Durbin have
cosponsored, to encourage the establishment of a class of ``Master
Teachers'' with extensive experience and training. If they are willing
to teach for an extended period of time in a school that is not meeting
adequate yearly progress goals, then they would be rewarded under my
bill with a 25-percent Federal tax exemption on their salary.
[[Page S11251]]
While my Master Teachers bill has not been incorporated into the
legislation before us, I hope the Senate will pass it soon.
The College Cost Reduction and Access Act also creates incentives for
good teachers to teach in high-need schools by establishing new TEACH
grants. These grants will provide scholarships of $4,000 per year for
high-achieving undergraduate and graduate students who commit to
teaching a high-need subject in a high-need school.
This legislation contains the biggest increase in Federal student aid
since the original G.I. bill. This is how our country should be
investing its money: helping to open the door to our children's dreams,
not just for their benefit, but for the benefit of our communities, our
economy, our Nation, and all of humanity. I am proud that this Congress
realizes that increasing access to postsecondary education serves both
as a gateway to the American dream for our Nation's students and a
pathway to our economic success and security as a Nation.
Mr. BINGAMAN. Mr. President, I rise today to express my support for
the conference report to H.R. 2669, the College Cost Reduction and
Access Act of 2007. As you know, the cost of college has tripled in the
last 20 years.
In my State of New Mexico, the cost of attendance at 4-year public
colleges has increased by 35 percent since 2000-2001. Unfortunately,
the median household income in New Mexico only increased by 11 percent
in that same time frame, considerably lower than the rate of increase
at public colleges.
Each year, there are hundreds of thousands of students who are
prepared to attend a 4-year college, but do not do so because of
financial barriers. Further, an increasing number of students have to
rely on loans to finance their education. In fact, in New Mexico, more
than half of all students graduating from 4-year institutions graduate
with debt. And the average student in New Mexico now graduates from 4
years of college with more than $16,000 in debt.
The conference report to H.R. 2669, the College Cost Reduction and
Access Act of 2007, is critical to addressing the skyrocketing costs of
college, and making college more accessible to students across the
country.
This legislation will actually increase student aid by more than $20
billion over the next 5 years, without increasing the national debt. It
is paid for by cutting excessive Federal subsidies to lenders
participating in the student loan program.
This legislation will increase the maximum Pell grant by $500 next
year and to $5,400 by 2012. In addition, the bill: simplifies the
financial aid process for low-income students by increasing the income
level at which a student is automatically eligible for the maximum
Pell; protects working students, increasing the amount of student
income that is sheltered from the financial aid process; expands
eligibility for financial aid so more students will qualify for more
assistance; eases the burden of student debt by cutting student loan
interest rates in half to 3.4 percent for undergraduate students with
subsidized student loans; caps monthly loan payments at 15 percent of
discretionary income so that graduates with significant loan debt can
better manage their payments, particularly those in lower paying jobs
or those supporting children; and forgives the student debt for those
who commit to public service for a period of 10 years.
This student aid package could mean as much as $200 million over the
next 5 years in financial aid to help New Mexico's students and
families beat back the rising costs of college.
In addition, I am pleased that the conference report will restore
critical funding for Upward Bound, a key college access program.
Further, the legislation will provide scholarships of $4,000/year for
high-achieving undergraduate and graduate students who commit to
teaching a high-need subject, such as math, science, special education,
foreign languages, or bilingual education, in a high-need school.
Moreover, the conference report provides critical support to minority
serving institutions. Despite tremendous growth in racial and ethnic
minority enrollment at the nation's colleges and universities in recent
years, Hispanics, African Americans, and Native Americans continue to
lag behind their non-minority peers in college enrollment. The College
Cost Reduction and Access Act will invest an additional $500 million in
these institutions, including: $200 million in funding for Hispanic
serving institutions--HSIs--to increase the number of students
attaining degrees in science, technology, engineering, or math, and to
facilitate transfers for students from 2-year HSIs to 4-year HSIs; and
$60 million in funding to strengthen tribal colleges and universities.
I am particularly pleased that the conference report contains
language I authored that would create and fund a program for Native
American serving institutions. The legislation will provide $10 million
to fund and help create a program for Native American serving
institutions, those nontribal colleges and universities that serve
large Native American student populations.
This conference report is critical to helping American families meet
the increasing burden of sending their children to college, and also
meets some very important national priorities. I urge my colleagues to
support this conference report.
Mr. FEINGOLD. Mr. President, I am pleased to support the College Cost
Reduction and Access Act of 2007, a bipartisan piece of legislation
that will increase student aid by billions of dollars through cutting
Federal subsidies to private banks and lenders. This is a significant
victory for students around the country and in my State of Wisconsin,
which is estimated to receive over $260 million in new need-based grant
aid in the next 5 years and over $115 million in additional loan
assistance over in the next 5 years. Wisconsin has a world-class higher
education system and I am pleased to support this much-needed
legislation that will help open the doors to college for more students
in my State.
Access to a higher education is increasingly important in the
competitive, global environment of the 21st century and is one of the
most important investments our Federal Government can make to advance
our country's economic growth. But while the importance of attending
college continues to increase, the cost of attending college also
continues to increase, which often causes financial strain on students
and their families as they seek to finance the cost of higher
education.
I am concerned about the continued educational attainment gap between
rich and poor students and the fact that access to higher education too
often depends on access to financial resources. The ability of a
student to attain a higher education should not depend on that
student's financial background, but rather on a student's desire to
obtain a higher education. Expanding need-based grant aid is one of the
best ways that the Federal Government can expand access to higher
education for low income students and I am pleased the conference
report we will adopt today does just that.
This conference report contains a significant boost in funding for
the Pell grant program, ensuring that the maximum Pell grant award will
reach $5,400 by 2012. I have long supported and led efforts in Congress
to increase funding for the Pell grant program, a program dedicated to
expanding access to college for low income students. I was pleased to
join with my colleagues in February to pass a significant increase in
the maximum Pell Grant award to $4,310 from $4,050, the first increase
in 4 years. Earlier this year, I also joined with my colleagues
Senators Kennedy, Collins, and Coleman to lead letters to both the
Budget and Appropriations Committees that advocated for the highest
possible increase in funding for Pell grants. This substantial increase
in the Pell program will benefit millions of students during their
higher education careers.
My colleagues and I have long fought against the declining purchasing
power of the Pell grant by supporting substantial increases in the
maximum grant award. According to data from the Department of
Education, the maximum Pell grant covered half the cost of tuition,
fees, room and board at public, 4-year colleges 20 years ago, but only
covered a third of these same costs during the 2005-2006 period. The
declining power of the Pell has impacted my State of Wisconsin as well.
[[Page S11252]]
In 1986-1987, the $2,100 maximum Pell grant covered 58 percent of
college costs for Wisconsin students. In 2005-2006, the $4,050 maximum
Pell grant only covered 38 percent of college costs in Wisconsin.
I have been a proud supporter of the Pell grant program for many
years and I will continue to strongly advocate for increases in Pell
funding in the annual appropriations process to provide the highest,
fiscally responsible increase in the Pell program in the coming years.
While this legislation is an important first step, we have more to do
to help ensure the Pell program can adequately cover the costs of
college attendance for low income students.
In addition to the declining purchasing power of need-based aid like
Pell, the availability of such need-based grant aid does not come close
to meeting the demand for it. As a result, an increasing number of
students turn to Federal and private loans to finance their education.
According to the College Board, in the late 1970s, over three-fourths
of the Federal aid to students were grants, while 20 percent of Federal
student aid were loans. Recent data from the College Board indicates
that the breakdown between grant aid and loans had switched by 2006,
with grant aid only making up twenty percent of the Federal student
aid.
Students in my State of Wisconsin, like students in other parts of
the country, are greatly affected by the Federal Government's increased
reliance on student loans at the expense of grant aid. The Project on
Student Debt reports that more than 60 percent of Wisconsin graduates
in 2005 graduated with debt and the average student who graduated from
a 4-year college in my State in 2005 owed over $17,000. This
legislation seeks to help alleviate the debt burden that some students
face upon graduation by cutting the student loan interest rates in half
by 2011 for undergraduate students who have subsidized student loans.
Higher levels of debt can also influence the decisions students make
about whether or not to take a job in the public interest sector or in
the more lucrative private sector after graduation. We have all heard
about students who are interested in working in areas like teaching,
law enforcement, legal aid, or State and local government but who
decide against taking these public interest jobs because of their high
debt loads. It is unfortunate that so many students are forced to
consider their debt loads when deciding which jobs to take or pursue.
The loan forgiveness provision of this legislation will help those
graduating students in Wisconsin and around the country who want to
pursue careers in public service.
While I applaud much of the policy included in this measure, I am
disappointed that we are again seeing the reconciliation process used
to advance legislation that is not primarily a deficit reduction
package. While there are better arguments for using reconciliation to
consider this particular bill than there were for the reconciliation
protection proposed for past legislation to open up the Alaska National
Wildlife Refuge to drilling, I am still troubled by the use of this
extraordinary procedure as a way to advance a significant policy change
that is not primarily a deficit reduction package. Thanks to the
efforts of our Budget Committee Chairman, Senator Conrad, the days when
the reconciliation process could be totally subverted to advance
legislation that actually worsened the deficit are over. I also commend
Chairman Conrad for insisting during the conference discussions on the
budget resolution that this particular reconciliation instruction move
closer to a more reasonable qualifying threshold of deficit reduction
than was initially proposed. I hope that in future budget resolutions,
we can further tighten the use of reconciliation to ensure that it is
used for what it was intended, namely to advance significant deficit
reduction.
Passage of the College Cost Reduction and Access Act of 2007
represents a great victory for students in my State of Wisconsin and
around the country. I believe everyone deserves fair and equal access
to a higher education and adoption of this bill moves us closer toward
that vision. I look forward to working with my colleagues in the coming
months and years to continue to expand the Pell grant program and other
need-based programs so that hard-working students will be able to take
advantage of the full opportunities that access to a higher education
offers.
Mrs. MURRAY. Mr. President, the bill that we are debating today comes
at a critical time for our country.
As the connected world has brought about new competition from nations
across the globe, the need for more Americans to be armed with a
college education has become essential to the future of our economy.
And as a new generation enters a work world that demands highly
skilled, highly trained workers, a college degree is necessary to open
the door to a successful career.
But for too long the deck has been stacked against students seeking
to build their careers and grow our economy.
College has become more expensive, interest rates have grown, and
those students who are able to attend college often graduate saddled
with debt and unable to buy a car or a house.
Today we have the opportunity to turn the tide in favor of students
and ensure a stronger future for our country.
The College Cost Reduction and Access Act puts students first, makes
college more affordable, cuts interest rates, helps recent graduates,
and encourages public service.
It also helps to ensure that students today have the same
opportunities that I had growing up.
When I was growing up, my family didn't have a lot. The only way I
was able to attend college was through Pell grants and student loans.
In fact, because of Pell grants and student loans, all seven kids in my
family were able to get a college education.
Today those seven kids are a school teacher, a lawyer, a firefighter,
a homemaker, a computer programmer, a sports writer, and a U.S.
Senator. In my book that was a great investment.
This bill helps a new generation attend college and realize their
dreams in a variety of ways.
First, this bill raises the maximum Pell grant by 25 percent over 4
years to $5,400 per student. That will make a real difference for
students in my home State of Washington.
In Washington state, 20 years ago, the maximum Pell grant covered 53
percent of the costs at a public, 4-year college. Today it only covers
33 percent of those costs. By raising the maximum Pell grant, this bill
will help students in Washington State and across the country attend
college.
For Washington State, this bill will make another $30 million
available in need-based grants next year alone. Over 5 years, the bill
will provide an additional $333 million for low-income students.
This bill will also ensure that college graduates are not trapped by
high loan payments after college. This bill cuts the interest rate on
Federal loans in half to 3.4 percent for students with subsidized
loans.
It also guarantees that borrowers will not have to pay more than 15
percent of their monthly income in student loan payments. This will
bring immediate relief to students who are burdened with excessive
loans.
Another problem with high student loan debt is that it limits the
career choices of college graduates.
Many can't afford to take a job in public service and pay back their
loans at the same time.
This bill encourages public service by providing loan forgiveness for
graduates who pursue careers in these areas.
As a former teacher, I am also extremely pleased that the TEACH grant
program has been included in this bill.
This program will provide $4,000 grants to students who commit to
teaching in high-need subjects at high-need schools.
It is past time that we reward students who are willing to embrace
the challenge of working with our country's students who are the most
in-need.
I am also pleased that we were able to increase funding for the
Upward Bound program which helps more low-income students prepare for
and attend college. This program is so important for assisting students
who may be the first ones in their family to go to college.
And I am pleased that minority-serving institutions will see funding
in the
[[Page S11253]]
form of a $500 million investment contained in this bill.
And finally I am especially proud that this bill contains two
provisions I worked hard to include that help groups that face other
unique problems in the college aid process.
For our brave men and women in uniform, I worked to include a
provision that will allow them to defer their student loan payments
during their deployments and as they transition out of service.
Currently, the law limits how long servicemembers can defer their
payments to just 3 years.
As we all know, those who are serving our country have enough to
worry about these days.
With deployments as long as 15 months in Iraq, and young dependent
families left at home, our servicemembers are already facing real
financial challenges.
Paying back student loans should not be something weighing on their
minds as they serve us overseas or as they transition back into
civilian life.
So this bill lifts this 3-year limit and makes more servicemembers
eligible for student loan deferment and relief.
I am also pleased that this bill improves college access for homeless
and foster care students.
These vulnerable students face tremendous barriers in their
education--especially those who don't have a parent or guardian who is
able to guide them through the process.
In this bill, I joined with my colleagues to simplify the student aid
application process and made homeless and foster students eligible for
higher levels of assistance.
I really want to thank Senator Kennedy for his leadership in moving
this bill forward and making sure it does right by our students. He is
a tireless champion for our young people, and his work is allowing so
many more of them to achieve the American dream.
To me, this is simple. If we want our economy to grow, our people to
succeed, and our country to be strong, we have to help more students
get a college education. This bill will do just that, and I urge my
colleagues to support it.
Mrs. BOXER. Mr. President, today I rise to laud the passage of the
College Cost Reduction and Access Act conference report, which is a
strong symbol of our commitment to higher education access and
affordability. This bill includes key tools and resources to enable
students and families across our Nation to attain the American dream of
a quality education.
I would like to thank Chairman Kennedy, Ranking Member Enzi and their
staff for their hard work on this important legislation. Their tireless
efforts have succeeded in making higher education a reality for
millions more young people.
Specifically, a key component of this legislation is the increase in
college aid by roughly $20 billion over the next 5 years, including the
much needed increase in the maximum Pell grant award. For many years
now, one of my top education priorities has been to increase the Pell
grant award for college students with the greatest financial need.
Twenty years ago, the maximum Pell Grant covered 40 percent of costs
for attending a 4-year college in California. Today, it covers just 30
percent. This bill helps our students when they start out by increasing
the maximum Pell grant award from $4,300 today to $5,100 in fall of
2008 and $5,400 in fall of 2011. This provision is particularly
important to California, which has over 584,580 Pell grant recipients--
more than any other State in the country.
The bill also includes a provision which I introduced with Senator
Feinstein that would remove a barrier, known as the tuition sensitivity
clause, in the Pell grant system that unfairly prevented students who
attend lower-tuition colleges from receiving the maximum grant.
According to the Congressional Research Service, the elimination of the
tuition sensitivity clause will benefit approximately 96,000 students
in the next academic year and would provide an average Pell grant
scholarship increase of over $110 per student.
The bill also tackles the problem of student loan debt upon
graduation. Currently, 46 percent of seniors at 4-year colleges in
California graduate with debt, owing on average $15,000 in student
loans. This bill helps students by capping Federal student loan
payments at 15 percent of a borrower's discretionary income. The bill
also encourages public service by rewarding those who choose to work in
nursing, teaching, or law enforcement for 10 years by forgiving their
remaining debt after that time period.
I also want to thank Senators Kennedy and Enzi for the consideration
and adoption of my amendment regarding Upward Bound. Upward Bound seeks
to capture potential, first-generation college students--many of whom
are low-income youth--and prepare them for the rigors of college.
Upward Bound is a fantastic tool for America's youth. These programs
provide mentoring, academic tutoring, summer classes, and other
services to youth across our Nation to provide them with the resources
and skills they need to be successful in college.
In my home State of California, we have 73 Upward Bound programs that
serve approximately 5,600 students a year. Due to funding shortfalls,
186 programs nationwide are in jeopardy of being cut, including 11
programs in California. Four of these programs are in San Bernardino, a
low-income area in southern California. These four programs were cut,
not because of performance--they actually have proved to be very
successful and have high program scores--but because of a lack of
funding.
The conference report also includes the creation of an Asian American
and Pacific Islander (AAPI) Higher Education Serving Institution
designation, a provision that I and Senator Akaka have championed in
past. This designation would allow grants and other Federal assistance
to be awarded to institutions that have a student enrollment of at
least 10 percent Asian American and Pacific Islander and has a
significant enrollment of financially needy students. The additional
funding would help AAPI-designated institutions to fulfill their
missions to assist students to meet their educational goals. The AAPI
designation would apply to approximately 86 colleges and universities
nationwide, and would apply to approximately 40 schools in California
alone.
I am pleased to strongly support the passage of the College Cost
Reduction and Access Act Conference Report.
No one should be denied the opportunity to go to college simply
because of cost. This landmark legislation will help ensure that
students and families across the country have the opportunity and
freedom to attend the college of their choice. I strongly believe an
investment in college aid is an investment in our Nation's future--and
this bill advances this vision.
(At the request of Mr. Reid, the following statement was ordered to
be printed in the Record.)
Mr. DODD. Mr. President, I rise today to herald the passage of
the College Cost Reduction and Access Act. This bill not only helps
students and families better afford higher education, it will
ultimately ensure that our country stays competitive in a global
economy. I thank my colleagues Senators Kennedy and Enzi for their
efforts on this important legislation and congratulate them on bringing
additional dollars into the student financial aid system. I also look
forward to completing the rest of the Higher Education Reauthorization
package later this year.
The College Cost Reduction and Access Act makes significant steps to
assist students in several important ways: by increasing student aid,
especially the Pell grant; by addressing college debt; by increasing
college access and expanding college preparation programs; by providing
incentives for teachers to go to the neediest schools; by reforming the
student loan system to benefit students; and by strengthening minority
serving institutions. We have accomplished all of this without
increasing the Federal deficit and actually providing $750 million in
deficit reduction. We recapture $20 billion by reforming the student
lending system in order to invest additional resources into preparing
our students for the global economy.
The annual cost of college is staggering at roughly $13,000 a year to
attend a public university and $30,000 on average for a private
university. In Connecticut, 33 percent of family median income is
needed to pay for a public college. Thirty three percent even
[[Page S11254]]
after financial aid is received! At a time when costs for other
household necessities are rising and incomes are not keeping up,
families and students are getting priced out of their opportunity to
attend college.
This year alone, it is estimated that 400,000 high school graduates
who are prepared and ready to go to a 4-year college will be unable to
go because their families cannot afford it. If America is to remain the
land of opportunity, then we must ensure that college is available to
all of our citizenry.
Not only is paying for an education a daunting task, but the debt
incurred to complete a higher education is astounding. In Connecticut,
58 percent of graduating seniors are leaving school with debt, at an
average of $19, 440 per graduate. For low-income and moderate income
students the thought of being saddled with a burden of debt prevents
them from pursuing higher education at all. Aside from the Federal loan
program, practices in the private lending system have been demonstrated
to dig our students deeper and deeper into debt.
In this bill, we have also strengthened our commitment to recruit
Americans to public oriented sectors--public service employees,
childcare workers, and many others will be offered loan forgiveness on
their direct Federal loans after 10 years of payments. By capping the
repayments of Federal loans at 15 percent of one's discretionary
income, this bill will also ensure that students can choose jobs that
best suit them, rather than jobs that only pay the bills. Borrowers are
also assisted by the interest rates on subsidized student loans being
cut in half. Over four years, this rate will be reduced from 6.8
percent to 3.4 percent. Students will be enabled to pay off debt sooner
with less interest due to this provision in the conference report.
Students in most need of assistance are the critical focus of this
bill. I am pleased that minority serving institutions receive an
additional $510 million to ensure that their students graduate. The
Upward Bound program also receives an additional $285 million to
prepare low-income students for a higher education. In order to ensure
that all students are ready to go onto college, the new TEACH program
provides incentives for students who agree to teach in high-poverty
schools or teach high-need subjects.
This bill will also allow additional low-income families to
automatically claim zero expected family contributions when filling out
financial aid forms. This change will allow students of these from
lower-income families to be eligible for increased Pell grants.
Financial forms themselves will become more user-friendly to provide
additional assistance for low-income families in accessing student aid.
I am very pleased with the increase in the Pell grant provided in
this bill. The maximum Pell grant will be raised to $5,100, in 2008 and
up to $5,400 by the year 2012. I wish it were much higher, considering
the small portion of the cost of public education that a Pell grant
provides today. The grant used to cover 80 percent of the average
tuition, fees, room and board at a public university. Today the Pell
grant covers an average of 29 percent. While I continue to advocate for
even greater increases in the Pell grant, I commend my colleagues for
taking steps to get us back to the 80-percent tuition coverage we
achieved in 1975.
I would be remiss if I did not take a moment to talk about the
private student lending market. Until we reach the goal of 80 percent
of students' tuition being covered by Pell grants and other forms of
Federal financial aid, many students have been, and will continue to be
forced to turn to private and direct consumer and student loans, which
are not guaranteed by the Federal Government and are not subject to
loan limits.
Private student loans are now the fastest growing segment of the $85
billion student loan industry due to rising college cost, Federal
financial aid remaining stagnant and increased demand for a college
education. This concerns me for several reasons.
The underwriting for private loans is similar to that used for other
forms of consumer credit. This means that student borrowers, who
usually have little or no credit history, poor credit scores, or no
parental cosigner, or whose parents have poor credit histories, will
typically pay higher rates than those with good credit histories and
those with parental cosigners with good credit. This model runs counter
to the longstanding Federal purpose of student aid, which is targeting
low-cost financial assistance to students with the greatest needs, one
of the great success stories of our country dating back to the G.I.
bill in 1944.
Earlier this year, at a hearing I convened within the Senate Banking
Committee, committee members listened to testimony that detailed
aggressive and questionable marketing practices and other unseemly
industry practices, ranging from conflicts of interest to kickback
schemes to consumer fraud, that have been unveiled by congressional and
State investigations into the private student loan industry. The issues
uncovered at that hearing led to legislation, ``The Private Student
Loan Transparency and Improvement Act of 2007,'' which was marked up
and approved overwhelmingly by the Senate Banking Committee prior to
Congress adjourning for the August recess.
The ability to pursue a higher education is a fundamental element of
the American dream. We must ensure that Americans have options to be
able to pay for college, and I believe that private lending should be
one of them. But students should have full and timely access to all of
the information they need regarding the terms and conditions of private
student loans in order to make a well-informed decision regarding the
financing of their educational needs. Conflict-driven industry
practices like revenue sharing and cobranding must be prohibited and
student loan underwriting should occur in a manner that does not have a
disparate or discriminatory impact on minority borrowers.
The legislation we passed within the Banking Committee would
accomplish many of these important objectives. It requires lenders to
provide more accurate and timely information to their customers about
the interest rates, terms, and conditions of their products, thereby
helping students better understand their financial options and
obligations. It prohibits documented practices that have harmed
students and families in obtaining the most competitive and affordable
student loans and requires a government review into the extent to which
private student loan underwriting practices may disparately impact
student borrowers and colleges on the basis of factors including race
and income levels.
I believe it is imperative that as we consider inclusion of the
private lending legislation as a complimentary component to the Higher
Education Act. We should ensure that this fast-growing market is well
regulated and remains accessible and affordable as an alternative
source of higher education funding for students who need them. I look
forward to working with the managers of this bill towards that
important goal.
The legislation before us will make college more affordable for
students and their families. Reinvigorating our commitment to higher
education as we do in this conference report keeps our country moving
in the right direction. I urge my colleagues to further invest in our
future by completing the Higher Education Act reauthorization before
the end of September.
Again, I congratulate Senators Kennedy and Enzi and all of my
colleagues, including Representative Miller, for providing the most
significant assistance to our students since the G.I. bill.
The ACTING PRESIDENT pro tempore. The Senator's time has expired.
Who yields time?
Mr. KENNEDY. Mr. President, how much time is remaining?
The ACTING PRESIDENT pro tempore. The Senator from Wyoming controls 3
minutes 44 seconds, and the Senator from Massachusetts has 9 minutes 25
seconds remaining.
Mr. KENNEDY. Mr. President, I want to be notified by the Chair when I
have 3 minutes left.
The ACTING PRESIDENT pro tempore. The Senator will be notified.
Mr. KENNEDY. Mr. President, for those who have been watching this
debate and discussion, we just want to underline one fundamental and
very important concept and principle: that the $20 billion which is
included in this legislation--which is going to be used in the ways we
have described earlier
[[Page S11255]]
today, with the Pell grants, with the loan forgiveness for students who
want to go into public service careers, for some relief for the middle
class--not a nickel of that is taxpayers' money. That comes out of the
lenders' pot of resources, which many of us believe is overly generous
to the lenders. That is another issue. When we have time after the vote
at 10:15, we will have some opportunity to develop that issue. But this
is a transfer of $20 billion from the lenders for help and assistance
to the students. There is no question about any of that. That is No. 1.
Importantly, as we are coming close now to the time where we are
going to be voting on this issue, I am very mindful of those
magnificent words of Nelson Mandela, one of the great heroes of the
century, certainly of our generation. On the occasion he was asked
about education, he said the most important weapon for change in the
world is education. That is something those of us who are strong
supporters of this proposal believe in. It was said, in my time, by
President Kennedy, and also by President Lyndon Johnson, that no
American, no qualified student should be denied--should be denied--a
college education because of cost.
That is a concept. That is a value. I would think all of us on this
side of the aisle believe that very deeply, and many on the other side
of the aisle. We would not have made the progress we have made over
recent years unless we had that kind of a commitment.
We have drifted from that kind of commitment, that ideal that was set
by Mandela, that was understood by John Adams when he wrote of the
importance of educating the common citizenry in the Constitution of
Massachusetts. No state constitution has a more detailed ideal
established in its constitution about educating the public than the
Massachusetts Constitution, written by one of the greatest of our
Founding Fathers.
It was understood by Horace Mann when he established the public
school system--the importance of education, the importance of education
in terms of opportunity and promise and hope. It was understood by
Abraham Lincoln in the height of the Civil War when he established the
land-grant colleges to help and assist the education of citizens all
over this Nation. It was understood by Abraham Lincoln, understood by
Dwight Eisenhower, when this Nation was challenged by Sputnik in the
late 1950s and the development of the National Defense Education Act,
understood by Franklin Roosevelt with the GI bill that has been
available for more than 60 years starting with a generation that fought
in World War II.
If you take the total cost of that GI bill that was expended--and as
most economists have pointed out, there was a $7 return for every $1
invested in education, $7 returned for the cost of education. Talk
about expending resources, talk about national priorities, this was the
program that built the middle class in this country. This was the
program that made America great.
Now we have the opportunity again to follow the wise counsel and
judgment of some of the great philosophers--Nelson Mandela and John
Adams--in our time and in our generation to renew that commitment. This
bill is a downpayment for it.
I agree with my friend from Wyoming, we have to go ahead and do the
reauthorization. We will do it. We are strongly committed to doing it.
We have passed a bill here in the Senate, and the chairman of the House
committee has committed that the House committee will do it, and then
we will finish it together.
But this is an opportunity. This is the downpayment. This is not
going to be the only action that is going to be taken by us in our
continued march toward progress in terms of the education and hope for
young people. Not all the problems are going to be resolved. Not all
the problems are going to be solved. This is a downpayment.
When we look at the priorities of education at other times, we have
to wonder why we are even having a debate on this issue--and why we are
just talking about $20 billion. If you take what was expended on
education, on investing in the GI bill over the period of the GI bill,
it was a third of the total budget. If we spent now on education what
we spent then, we would be spending 130 billion dollars--not $20
billion. Imagine that. $130 billion it would be, and we are only
talking about $20 billion. We were spending at that time all of that--
for what?--for educating the young people. Is there anyone in here who
would say that was a mistake? Find the Members of the Congress or the
Senate who said we have spent too much in terms of investing in the
education of the children in our country.
The ACTING PRESIDENT pro tempore. The Senator has 3 minutes
remaining.
Mr. KENNEDY. Find me that person. I remember being on the floor of
the Senate when we had strong voices in opposition to the Pell grants,
to Stafford loans back in the early 1960s. I do not hear those voices
today. I do not hear those voices today. Why? Because we know when it
is done well, and it is done right--and it has not always been, but in
this case it is, in terms of the Pell grants, in terms of the loan
forgiveness, in terms of some help and assistance and relief for
middle-class families--it will make an important difference.
When we hear the eloquence of some of our colleagues and about the
difference it has made for their education--whether it is Dick Durbin,
whether it is Maria Cantwell, who talks about the difference it has
made in her family, whether it is Patty Murray, who said all seven
members of her family had help and assistance in terms of student
loans, and all of those people are professional people today, paying
taxes, repaying whatever those kinds of loans are.
Let's think about what this issue is about. This is about hope. This
is about our future. This is about progress in America.
Finally, this is the kind of investment we need if we are going to
deal with the challenges and problems of global competition. We will
have a chance to go into this in greater detail after the vote this
morning, but we need these kinds of investments, and the kind of
investments we have in the reauthorization bill in terms of teachers
and the kinds of investments we had in the COMPETE Act that was passed
in a bipartisan way earlier this year. We need this in order to stay
competitive in the global economy, to make sure America's economy is
the strongest. We need this investment in terms of our national
security to make sure we are going to have the men and women who are
going to be able to defend this Nation and use the various kinds of
technologies that are developed.
Finally, we need this investment in order to have a well-trained and
educated citizenry who are going to be able to breathe life into the
institutions our Framers established. That is what we are talking
about. We are not going to achieve all of that with this legislation,
but it is going to be a meaningful and ongoing and continuing
commitment, and one that all of us who are supporting this proposal
recognize as something that must be followed up on and strengthened and
shaped as we move forward.
Mr. President, I withhold the remainder of my time.
The ACTING PRESIDENT pro tempore. The Senator's time has expired.
The senior Senator from Wyoming.
Mr. ENZI. Mr. President, I yield myself the remainder of my time.
Mr. President, I am always a little disconcerted that what the
American public gets to watch is the debate on the Senate floor. This
is not where we get most of the work done. This is not where there is
agreement. This is where there is the disagreement and the branding of
the different parties. It is important, but it is not what gets things
done.
We have a bill before us today, and the Senate-passed reconciliation
bill had a vote of 78 to 18. And we had some of these same discussions.
Those discussions are important. As the only accountant in the Senate,
I am appalled by the way we score bills around here, the way we come up
with the different provisions, the different arguments that get made on
the floor. But I would say the provisions of this conference report
closely parallel many of the provisions in the Senate-passed bill.
There were clearly compromises made in reaching agreement on the
conference report. We can point to things in the conference report that
are there because of Republican and Democratic sponsors. In the end, it
is a
[[Page S11256]]
product where the benefits to students outweigh the reservations that
some of us may have.
Over 55 percent of the savings are dedicated to increasing the Pell
grant award. In the next 5 years, low-income undergraduate students
will see the maximum Pell grant award increase by more than $1,000. We
will see who all takes credit for that, but that is what the bill does,
and it will take people from both parties to get it passed. We increase
the income protection allowance so students are not penalized for
working and saving for college. The unique role that our not-for-profit
lenders have in providing information and services to students has been
recognized.
But at the end of the day, we must still reauthorize the Higher
Education Act. Reconciliation is such a small part, and we cannot leave
out the other part or we will close the door on our students. We have
to reauthorize the Higher Education Act that provides the FAFSA
simplification, year-round Pell, financial and economic literacy,
better college cost information, and improvements in outreach and
student support service programs such as GEAR UP and TRIO, in which all
of us have an interest.
We have passed eight extensions of the Higher Education Act, starting
in 2004. The current extension expires on October 31. How much longer
do we have to wait? My goal is to not have a ninth extension on the
Higher Education Act. My goal is to debate and pass a higher education
reauthorization conference report. I look forward to working with
Senator Kennedy and the House to get this accomplished, or else no
matter how you slice it, the biggest piece of higher education is left
undone.
I will have more comments to make on the accounting on these
different things as we get into further debate after the vote. We did
agree to a 10:15 vote, and I want to stick to that. I have a lot of
people I would like to thank. I will also save that for later. I
believe my time has expired.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator's time has expired. All
time has expired.
The question is on agreeing to the conference report.
Mr. GREGG. Mr. President, I ask for the yeas and nays.
The ACTING PRESIDENT pro tempore. Is there a sufficient second? There
is a sufficient second.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden),
the Senator from New York (Mrs. Clinton), the Senator from Connecticut
(Mr. Dodd), the Senator from Massachusetts (Mr. Kerry), the Senator
from Arkansas (Mrs. Lincoln), and the Senator from Illinois (Mr. Obama)
are necessarily absent.
I further announce that, if present and voting, the Senator from
Delaware (Mr. Biden) and the Senator from Massachusetts (Mr. Kerry)
would each vote ``yea.''
Mr. LOTT. The following Senators are necessarily absent: the Senator
from Idaho (Mr. Craig), the Senator from Arizona (Mr. McCain), and the
Senator from Kansas (Mr. Roberts).
The ACTING PRESIDENT pro tempore. Are there any other Senators in the
Chamber desiring to vote?
The result was announced--yeas 79, nays 12, as follows:
[Rollcall Vote No. 326 Leg.]
YEAS--79
Akaka
Alexander
Barrasso
Baucus
Bayh
Bennett
Bingaman
Boxer
Brown
Brownback
Byrd
Cantwell
Cardin
Carper
Casey
Chambliss
Cochran
Coleman
Collins
Conrad
Corker
Cornyn
Crapo
Dole
Domenici
Dorgan
Durbin
Ensign
Enzi
Feingold
Feinstein
Grassley
Harkin
Hatch
Hutchison
Inouye
Isakson
Johnson
Kennedy
Klobuchar
Kohl
Kyl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lott
Lugar
Martinez
McCaskill
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Pryor
Reed
Reid
Rockefeller
Salazar
Sanders
Schumer
Sessions
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Tester
Thune
Voinovich
Warner
Webb
Whitehouse
Wyden
NAYS--12
Allard
Bond
Bunning
Burr
Coburn
DeMint
Graham
Gregg
Hagel
Inhofe
McConnell
Vitter
NOT VOTING--9
Biden
Clinton
Craig
Dodd
Kerry
Lincoln
McCain
Obama
Roberts
The conference report was agreed to.
Mr. DURBIN. Mr. President, I move to reconsider the vote.
Mr. KENNEDY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The ACTING PRESIDENT pro tempore. The Senator from Massachusetts is
recognized.
Mr. KENNEDY. Mr. President, I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Unanimous Consent Agreement--Executive Calendar
Mr. REID. Mr. President, I ask unanimous consent that on Monday,
September 10, at 10 a.m., the Senate proceed to executive session to
debate en bloc Executive Calendar Nos. 238, 239, and 241; that there be
60 minutes for debate on the nominations equally divided between
Senators Leahy and Specter or their designees; that at 11 a.m., the
Senate proceed to vote on Calendar No. 238, followed by a vote on
Calendar No. 239, followed by a vote on Calendar No. 241; that the
motions to reconsider be laid upon the table, the President be
immediately notified of the Senate's action, and the Senate then return
to legislative session; that Senator Barrasso be recognized to speak in
morning business--as a side note, this is his maiden speech in the
Senate--for up to 30 minutes, following which the Senate begin
consideration of H.R. 3074, the Transportation appropriations bill.
I will also say, while the distinguished Republican leader is
present, we are going to complete the Transportation bill next week.
The last vote next week will be at about 1 o'clock, no later than 1
o'clock because of the beginning of the Jewish holiday at sundown.
I have talked with the distinguished Republican leader, and we have
some items we are going to look to on September 17 and 18. On September
17, there will be no votes. On September 18, there will be votes. We
are going to try to develop--we have not done it yet; I have had a
number of conversations with the Republican leader--as to how we
proceed on the Iraq matters. We need to finish the Defense
authorization bill. We want to make sure there is time to adequately
debate that measure. But we also want to again address the Iraq
situation. We have people, as I speak, trying to work out something
that will be different from what we have done in the past. I hope that
can be done, something on a bipartisan basis. We still may have to do
the partisan matters. But, hopefully, Senators working together can
come up with some way we can proceed on that issue. We are not there
yet.
I want to alert everyone that during the week of September 17, we are
going to have to do a lot of work on Defense authorization and also the
Iraq matters. We hope we can complete the bill that week. Again, we are
not at a point where we are near able to work out a unanimous consent
agreement on that measure, but I have kept the minority advised about
every step we have taken in this regard.
The ACTING PRESIDENT pro tempore. Is there objection?
Mr. McCONNELL. Reserving the right to object, and I will not be
objecting, I want to underscore that the speech to which the majority
leader referred will be the maiden speech of our new Senator from
Wyoming, Mr. Barrasso. That will be Monday. I look forward to hearing
what he has to say.
Also, the majority leader indicated we will be discussing the way
forward on our next Iraq debate, how to structure it in a way that is
fair to all interested parties. The majority leader and I will be
continuing to discuss that matter in the coming days.
[[Page S11257]]
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Who yields time? The senior Senator from Massachusetts is recognized.
Mr. KENNEDY. Mr. President, I wish to take a few moments, first, to
thank all of our colleagues for the overwhelming, bipartisan support
for the conference report. This exceeded the vote we had earlier on our
education measures, and we also had a number of absentees today who
indicated favorable support for the legislation. This is a very
important statement about where we are as a country in terms of the
education issue. This ought to be reassuring for the students, parents,
and families of our country.
Again, I am immensely grateful to my colleague and friend, Senator
Enzi. Without his strong support in the shaping of both the
reauthorization legislation and this legislation, we certainly would
not be here. He spoke very eloquently and well about the importance of
the reauthorization. It is a viewpoint which I share for the reasons he
has outlined. The simplicity of the financial aid application is key.
We have 400,000 young people who are qualified for college but who do
not go to college. Many do not go to college because they cannot work
their way through those ten pages of an extremely complex, difficult
questionnaire, and they do not have the support systems to assist them.
This reauthorization will assist not only in the simplification of the
FAFSA that Senator Enzi personally took a great deal of time with, as
well as Senator Reed, but also with regard to teachers in underserved
areas and the transparency provisions that will help parents understand
the costs of various universities.
The legislation has a number of noteworthy features that the Senator
outlined in his statement. With this strong vote, we want to give
assurance that we look forward to working eagerly with the House to
make sure we have a successful passage; doing so will maximize the
impact of this legislation we just passed.
We will certainly work on the issue of college cost reduction and
higher education access. And we have a number of other education issues
we are working on as well. We understand the importance of the
reauthorization of the Head Start Act and the provisions dealing with
early education. We understand the importance of reforms of K-12, the
importance of tying in kindergarten into the early grades. We
understand the importance of getting well-trained teachers in
underserved areas, the importance of parental involvement, the
challenges out there with regard to disabled students, the challenges
so many students are facing in terms of limited English-speaking
capabilities, and the issues around accountability and growth models.
There are a lot of complex issues, but we certainly want to wrestle
with those and eventually have, as a result of working together in our
committee, a seamless web of progress in the education systems in our
country. That is certainly our intention. We are well down the road
with the actions that have been taken today.
I wish to mention a few of these items we have in the legislation.
Before I do, I wish to personally mention the individuals who worked
long and hard on this measure. I failed to do it during the earlier
presentation when we were under more limited time, but, as I think
Senator Enzi knows very well, we have been blessed with an
extraordinary group of individuals who work long and hard. Much of the
legislation--the authorization and also the general format of a good
deal of what we have done today--has been in the works for a number of
years. It did not just happen this year. The authorization legislation
we passed basically had the name of Senator Enzi on it before the
changes that took place in the elections. We have been working very
hard. We have been enormously blessed by an extraordinary group of men
and women who have worked with us. These are complex, difficult issues
with incredible implications.
We have on our Education Committee a membership that is very involved
and engaged on education issues. All of them have ideas. One of the
things that makes that committee so interesting is that we have an
enormous number of ideas and suggestions, and it has taken a good deal
of time to try to work with our colleagues on both sides of the aisle
and then with the House. That was achieved.
I will certainly mention some of those who have done such an
extraordinary job, and we are very much in their debt. Obviously, we
are all honored to serve as Members of this institution, but those who
have worked on this legislation should take a great deal of
satisfaction in the difference they have made though shaping this
legislation, because they have played an indispensable role, and we
value very much their continued contribution.
On my staff I would like to thank Michael Myers, who has been the
chief of staff of our HELP Committee, Carey Parker, a longtime friend
and legislative assistant, Carmel Martin, Missy Rohrbach, Erin Renner,
and J.D. LaRock. We have Emma Vadehra, Nick Bath, David Johns, Raquel
Alvarenga, Liz Maher, Lily Clark, Jennifer Fay, Ches Garrison, Scott
Fay, Melissa Wagoner, Dave Ryan, and Jay McCarthy.
This has been a bipartisan process all the way. I would also like to
thank Senator Enzi's wonderful staff, specifically Katherine McGuire,
Ilyse Schuman, Greg Dean, Beth Buehlmann, Ann Clough, Adam Briddell,
Amy Shank, and Kelly Hastings.
I also thank MaryEllen McGuire, Taneisha Woods, and Jeremy Sharp of
Senator Dodd's staff; Rob Barron, Ellen Murray, and Mark Laisch of
Senator Harkin's staff; Robin Juliano and Chris Fick of Senator
Mikulski's staff; Michael Yudin of Senator Bingaman's staff; Kathryn
Young of Senator Murray's staff; Seth Gerson of Senator Reed's staff;
Mildred Otero and LaToya Johnson of Senator Clinton's staff; Steve
Robinson of Senator Obama's staff; Huck Gutman of Senator Sander's
staff; and Will Jawando of Senator Brown's staff.
I would also like to thank Senator Reid's staff, Randy DeValk, Gary
Myrick, and Jason Unger, and his outstanding floor staff without whom
none of us could do our jobs, Marty Paone, Lula Davis, Tim Mitchell,
and Trisha Engle.
I thank especially Senator Conrad and his staff. Without them, there
is no way we could have completed this bill. So thank you, Mary Naylor,
Joan Huffer, Lisa Konwinski, and Robin Hiestand.
And I would like to thank Liz Engel of the Democratic Policy
Committee.
I would also like to thank David Cleary of Senator Alexander's staff;
Allison Dembeck of Senator Gregg's staff; Celia Sims of Senator Burr's
staff; Glee Smith of Senator Isakson's staff; Karen McCarthy of Senator
Murkowski's staff; Juliann Andreen of Senator Hatch's staff; Suzanne
Singleterry of Senator Allard's staff; Alison Anway of Senator Roberts'
staff; and Matt Blackburn of Senator Coburn's staff, all of whom put in
many hours to make this bill a reality.
As always, we worked closely with Chairman Miller's staff, and I
would like to thank them as well. Mark Zuckerman, Alex Nock, Gaby
Gomez, Julie Radocchia, Jeff Appel, and Stephanie Moore all worked
tremendously hard, and Chairman Miller is lucky to have them.
I would also like to thank the Parliamentarian, Alan Frumin, and
Assistant Parliamentarians Elizabeth MacDonough, Peter Robinson, and
Leigh Hildebrand for their assistance throughout the process.
More than most, this bill has required significant help and
assistance from the Congressional Budget Office, and I would like to
give them a special thanks. Paul Cullinan, Deborah Kalcevic, and Justin
Humphrey have put in tremendous work--nights and weekends and
everything in between--to model and estimate the budgetary effects of
the complex provisions in this bill, and all the many iterations and
changes that the committee considered. I don't know what we would do
without them. We certainly wouldn't have been able to move this
legislation as expeditiously as we did.
I would also like to thank Mark Koster, Kristin Romero, and Amy
Gaynor in the Senate Legislative Counsel's Office, as well as Steve
Cope and Molly Lothamer in the House Legislative Counsel's Office, who
also worked nights and weekends to assist in drafting the language and
working out technical issues in the bill.
[[Page S11258]]
Finally, I would like to thank members of the education team at the
Congressional Research Service--Adam Stoll, Charmaine Mercer, Jeff
Kuenzi, and Dave Smole, whose expertise was invaluable throughout this
process.
I wish to take a few moments to highlight briefly, once again, in
greater detail, what the conference report will do. I outlined in the
earlier presentation the highlights and the reasons for the
legislation, but for a few minutes I wish to once again remind those
who are interested in the benefits the legislation provides for all the
borrowers.
It is a historic increase in the need-based grant aid--the greatest
increase since the GI bill. That helps the neediest students. We talked
earlier about how we should set as a goal not to let a single qualified
student lose the opportunity to get a college education because of
cost. We still have a long way to go. We recognized earlier in the
debate that the cost of college has gone up extraordinarily. But at the
same time, grant assistance has basically stabilized or gone down in
real terms, and the earning power of the middle class has been level or
has fallen slightly over the period of recent years.
So in this legislation we have tried to provide real assistance on
the issue of burden in the percentage of repayment. We have done, I
think, a first-rate job in setting better repayment options that cap a
borrower's monthly payment at 15 percent of their monthly discretionary
income. We have included loan forgiveness for borrowers in public
service jobs, and protection for working students by not penalizing
their earnings. So many of these students go out and work, and work
hard, to earn a little money, and yet then they are outside the
eligibility to benefit from some of important grants in terms of
assistance. So we have addressed that issue. And we have provided
matching grants to States to improve college access.
We cut interest rates--I was referring to that earlier--on new
undergraduate subsidized loans from 6.8 to 3.4 percent by 2011.
We provide for scholarships of $4,000 per year for high-achieving
students who commit to teaching high-need subjects in high-need
schools. We didn't emphasize or stress that during the early
presentation. This is one of the great and important provisions in this
legislation. I think we all understand we need a well-trained teacher
in every classroom in America, and we need well-trained teachers in
particular in inner-city schools and also in rural and underserved
communities. We need them to have the skills to serve, so we provide
some important assistance to that end.
Senator Enzi mentioned in the reauthorization that we provide other
kinds of incentives for schools and colleges to also move in that
direction.
We support the Historic Black Colleges and other minority-serving
institutions, such as Hispanic serving institutions and tribal colleges
and universities. We increase funding for the Upward Bound Program to
provide tutoring and other support to help disadvantaged students
prepare for, apply to, and succeed in college. I will show why that
measure is so important in a moment.
And we provide these benefits--all of these benefits--at no cost to
the taxpayer by reforming the student loan industry so that it works
for students and not the banks. That is the basic concept.
As we mentioned during the course of the earlier discussion, we
provide loan forgiveness to graduates in public service. This chart
mentions the various professions in which individuals can be involved
to gain that kind of opportunity. They can be in public safety, law
enforcement, public education, early childhood education, child care,
public health--with all the Public Health Service agencies; or they can
be working with special needs children and the disabled community,
which is enormously important; the elderly, and the frail elderly--
increasingly a challenge for our country; public interest law--these
are all the public defenders and legal services attorneys, as well as
prosecutors; public libraries; nonprofit organizations; or teaching
full time at a tribal college or university.
I mentioned earlier the article in Time magazine this week that talks
about the attitudes of students in colleges all over this country, and
that it is the desire of so many of these young people to be involved
in public service and to help respond to the needs in their
communities. They want to be part of the solution, not part of the
problem. So often, because of their indebtedness, they have to choose
careers in order to deal with the indebtedness. So this legislation
will open up or help us take advantage of that idealism that is out
there. We are giving them a pathway to making a difference in terms of
the future of our country, and I think that is enormously important.
That is one of the most important parts of this legislation. We have
tried to work on it, and I think it will be very important.
I might give a quick example of how the loan forgiveness works. A
starting teacher in my State, making a salary of $35,400, has an
average debt of about $18,100. Under the loan forgiveness plan, where
he or she would not pay more than 15 percent of their disposable
income, they will save $730. If they continue to work as a public
educator, more than half of their indebtedness will be forgiven after
the required period of their service.
If you take a similar situation, this is a police sergeant with a
child in Arkansas, making an annual salary of $28,200, with a debt of
$17,000. This will help save him or her $1,100 a year in terms of
repayment. At the end, if he or she stays in law enforcement for ten
years, $14,800 of the $17,000 debt will be forgiven. $14,800 of the
$17,000 debt if they stay working in law enforcement.
So this gives you a good illustration about the loan forgiveness.
As was mentioned earlier, the higher education reauthorization bill,
which Senator Enzi referred to, addresses rising costs by requiring
colleges to publicize college cost information. This is a real problem.
Parents have a difficult time understanding what the real costs are.
There are fees and more fees--tuition, room and board. I was absolutely
startled when the daughter of a very good friend of mine, attending one
of our finest colleges, indicated to me the cost of the schoolbooks for
going on to college--over $100 for a freshman schoolbook in a rather
general subject matter. These are surprises that you are faced with;
the several hundred dollars additionally that people are unaware of.
I know some of our colleagues have talked about this and we are
certainly aware of this challenge and so we are going to try to see
what we can do to help provide some assistance there.
Reforms to the student loan system will ensure that colleges are
recommending lenders based on the best interest of their students.
Those are the ethical provisions we have added as a result of the
investigations received broad support in this from the colleges and
universities. Many of them were stunned by what has been happening, and
they have been enormously cooperative and helpful.
And I want to talk about simplifying the financial aid form. I give
great credit to Senator Enzi and Senator Reed on this. They have
simplified this form from an enormously complicated ten pages of
questions to just two pages of essential questions. That will make a
big difference.
This strengthens GEAR-UP and TRIO to improve preparation for higher
education. The record of these programs has been extraordinary in terms
of providing the bridge for many of those who come from disadvantaged
backgrounds to get them started into college, and in terms of giving
them the assistance and the followup so they will need complete their
higher education.
Then, also, the reauthorization reforms and improves our teacher
preparation programs. Teachers are the backbones of our schools, and
the bill will promote high-quality teacher preparation programs, and
recruit good teachers to teach in high-need schools--where they are
needed most.
So those are some of the essential elements in the reauthorization.
As we said earlier, we are investing more here in the Pell grant.
Here, I have the chart of what has happened in terms of the failure to
increase the Pell grant to keep up with the cost of college. This
demonstrates where we are going with one very important aspect, and
that is the assistance in the Pell program. It has remained flat in the
past. You can look from 2002 all the
[[Page S11259]]
way to 2006, and now we will go to $5,400 by 2012.
There has been talk that there had been some increase in Pell, all of
which is true, but that was because there was an increasing number of
poor students who were eligible for the Pell grant. We have nearly 5
million more people living in poverty today than in 2000. So we put
more money into Pell to cover more students, but that did not keep up
with the growth needs for the grant amount. The point being, this is a
very important increase in terms of the cost. As the Chair, Senator
Brown, pointed out, an increase in the cost of universities, a failure
to provide an increase in grants, and the leveling of salaries of
people have made it very difficult for many to pay for college.
In my full statement, I point out in a more dramatic form, what is
happening in terms of the need for many of these students and that what
we are seeing currently in our education system is the increasing
divide of America. I think all of us believe, or should believe, that
if we are going to be one country, with one history and one destiny, we
don't want education adding to the separation of a divided nation. It
ought to be bringing the country together--based upon ability, based
upon hard work and enterprise and a willingness to work and to achieve
and accomplish. What we have found in our education system now, for a
number of reasons, though unintended, it is working to divide the
country. It should not be. That is a very important issue that we have
tried to address in a number of different ways in this legislation. I
believe it is very important to do so. We have not emphasized it,
stressed it that much in our earlier comments, but it is an underlying
commitment we have.
In my more complete statement, I have reviewed the different ways we
tried to do this. We are going to continue to work at it.
There being no objection, the material was ordered to be printed in
the Record, as follows:
As I said when we began our debate this morning, our Nation
has always looked to education as the pathway to progress and
prosperity. After John Adams recognized education as a
fundamental right in the Massachusetts constitution, we
embraced this view in my home state by creating the first
college and first public school in the nation. A few decades
later, legendary reformers such as Horace Mann, first
recognized that public schools would be the ``great
equalizer'' that delivers opportunity for all to fulfill
their potential.
At the height of the Civil War, Abraham Lincoln signed the
legislation creating the land-grant colleges and made a
commitment on behalf of the nation to the education of the
children of our country. During the Industrial Revolution, we
rose to the challenge once again. We established free public
schools. At the turn of the last century, we founded public
high schools to enable the nation to move forward. And after
the Second World War, we passed the GI Bill to enable those
who served in war to rebuild their lives at home. For every
dollar we invested, the Greatest Generation returned $7 for
our economic growth.
The landmark success of the GI Bill shows us what a
difference higher education makes. The bill granted World War
II veterans up to $500 each term--the equivalent of $5,600
today. It swung the gates to college wide open--and half of
all veterans went through those gates determined to create a
new life for themselves and their families. More than five
million veterans received vocational education or job
training, and more than two million attended college.
In 1940, the average GI was just 26 years old and had
attended only one year of high school. The bill even enabled
many of these GIs, who had served the country so
magnificently, to become professionals. In 1957, we were
called to action once again. The Soviet Union began a new
Space Age with the launch of Sputnik. We rose to the
challenge by passing the National Defense Education Act, and
by inspiring the nation to land on the moon. We doubled the
Federal investment in education.
Today, we need a similar bold new commitment to enable the
current generation of Americans to rise to the global
challenges we face. The Higher Education Conference Report we
consider today makes that commitment. Today, we'll help
millions of students achieve the American dream by providing
$20 billion in new college aid--the biggest increase in
student aid since the GI Bill.
Just a few weeks ago, the Senate overwhelmingly voted to
approve this bill. Let's look at what the Senate bill did:
It provided a historic increase in need-based grant aid, by
raising the maximum Pell Grant by almost $1,100 over the next
5 years, to $5,400 from $4,310 today.
It provided new student loan repayment options that allow
borrowers to cap their loan payments at 15 percent of their
monthly discretionary income.
It offered loan forgiveness to borrowers who work for 10
years in a variety of public service jobs. This includes
public school teachers, law enforcement and emergency
management professionals, social workers, librarians,
prosecutors and public defenders, public health doctors and
nurses, and child care workers.
It protected working students by not penalizing their
earnings, by raising the ``income protection allowance'' from
$3,000 to $6,000 for dependent students, and increasing it by
50 percent for independent students.
It initiated a new program that provides matching grants to
states so they can provide more college access activities to
students.
Our Senate bill provided all these benefits at no cost to
the taxpayer--by cutting the outrageous subsidies the
government gives to lenders. We gave that money to the
students, where it belongs. The Conference Report we consider
today maintains all these benefits to students. But it does
even more for students. In addition to the benefits I've just
described, the College Cost Reduction and Access Act:
Cuts interest rates on new subsidized Stafford loans for
undergraduates from 6.8 percent to 3.4 percent by 2011--a
step which will help millions of students manage their
student loan debt more effectively.
It provides scholarships of $4,000 per year to high-
achieving college students who commit to teaching high-need
subjects like math and science in high-need schools.
It provides more than $500 million to support Historically
Black Colleges and Universities, Hispanic Serving
Institutions, and other colleges that serve minority
students.
It increases funding for the Upward Bound program by more
than $200 million, which will help provide tutoring and other
support services to help disadvantaged high school students
prepare for, apply to, and succeed in college.
This is the bold commitment that our students and families
deserve, and it couldn't come at a better time. We all know
that a college education is more important than ever, but
it's never been more expensive. The cost of college has
tripled in the last 20 years. Yet, family incomes are not
keeping up with rapidly-rising college prices. Last week, the
Census Bureau released new data showing that median household
income in America increased just seven-tenths of one percent
last year. Meanwhile, the cost of college increased 6
percent.
In fact, over the last twenty years, the cost of college
has increased more than twice as fast as median household
income. Since 1986, costs have increased by 216 percent at
public colleges, and 208 percent at private colleges. But
median household income has gone up just 93 percent over that
same time. During the same period, grant aid has not kept up
pace with increasing costs.
Twenty years ago, the maximum Pell Grant covered 55 percent
of costs at a public 4-year college. Today, it covers only a
third of those costs. The gap between the maximum Pell grant
and the cost of attendance at 4-year public colleges has
increased almost $3,500 since 2001-2002. Today the gap is
$8,746. For years, under Republican control of Congress, the
maximum Pell Grant was stuck near $4,000. Earlier this year,
Democrats increased the maximum grant to $4,310. But that's
far from enough.
Increasing costs and stagnant grant aid are closing the
doors to college for many middle-income and low-income
students and families.
The lowest income students on average have an unmet need of
$5,800. Each year, 400,000 students don't attend a 4-year
college because they can't afford to do so. It's shameful
that low-income students--even those who have worked hard and
done well in high school--are less likely to attend and
complete college than high-income students. Just one fifth of
low-income eighth graders will graduate from college. But 68
percent of high-income students will do so.
That's unacceptable.
By providing the biggest increase in student aid since the
passage of the G.I. Bill, our bill will help close these
gaps. Of the $20 billion in college aid that our bill
provides overall, $11.4 billion is allocated for additional
grant aid. Our bill immediately increases the maximum Pell
grant by $500 next year, to $4,800 from $4,310. By 2012, the
maximum Pell Grant will increase to $5,400.
Who will be helped by this bill? It will help students like
Sara, who was a first-generation college student. She
graduated from Norfolk State University and earned her
Master's degree with the help of the Pell Grant and other aid
programs. Sara says that the Pell program helped her family
know that a better day was coming for them. This bill will
help students like Natalie, from Massachusetts, who's a
single mother enrolled in college for the first time. She
says that without Pell grants, she ``would be stuck in this
way of life, with no `light' to look forward to . . .
knowledge is power and education is key.'' More than 5
million students rely on the Pell grant--5 million.
This bill provides the help and assistance that millions of
Americans need in order to access and afford a college
education. This increase in aid is long overdue. But we
cannot stop there. Students and families also need our help
to manage the crushing burden of student loan debt. As the
cost of college continues to rise, the crisis of student loan
debt is growing worse. In 1993, fewer than half of all
students took out loans to finance their education. But
today, more than two-thirds of students borrow for college.
Today, the average student leaves college with more than
$19,000 in student debt.
[[Page S11260]]
This mountain of debt is distorting the basic life choices
of countless Americans. It's forcing them to delay getting
married, delay buying a home, and delay starting a family.
It's discouraging many young people from choosing careers in
fields such as teaching, social work and law enforcement--the
low-paying but vital jobs that bring large benefits to our
society. No student should have to mortgage their future in
order to pay for higher education. That is why our bill also
cuts interest rates in half--to 3.4 percent from 6.8
percent--on new subsidized Stafford Loans for undergraduates,
which goes to the neediest students.
By cutting the rates in half, we reduce the interest rate
on these loans to some of the lowest levels ever in the
history of the federal student loan program. These reductions
will provide much-needed help to the 5.5 million students who
take out subsidized student loans each year. Reducing
interest rates will clearly help students. Under a standard
10-year repayment plan, a borrower with $18,000 in subsidized
loans will have their interest payments reduced by 35
percent, from almost $6,900 to less than $4,500. That student
will save almost $2,400 in interest payments. Borrowers who
consolidate their subsidized loans will save even more. For
example, a borrower with $13,800 in subsidized student loan
debt--the average amount--will save $4,400 over the life of
their loan.
Our income-based repayment plan--which gives borrowers the
option of capping their loan payments at 15 percent of their
monthly discretionary income--will help save borrowers even
more. And when it's combined with our public service loan
forgiveness plan, the help we'll provide to students will be
truly remarkable. Teachers, emergency management technicians,
law enforcement professionals, public health doctors, nurses,
social workers, librarians, public interest lawyers, early
childhood teachers--and many others--will be eligible for
loan forgiveness. Take, for example a starting teacher in
Massachusetts who makes a salary of $35,421:
If that teacher graduated with the average loan debt for
the State--$18,169--he or she will have a monthly payment of
$209.
Under the income-based repayment plan, that monthly payment
would be reduced to $148 instead--$61 less.
Over the course of the year, that teacher would pay $732
less than under the standard repayment plan.
If the teacher stays in the job for 10 years, the remaining
debt would be cancelled altogether--in this case, a benefit
of over $10,000. Or let's consider a starting legal services
attorney, who makes $36,000 a year:
If that student graduated with the average loan debt for
lawyers for the State--$51,056--he or she will have a monthly
loan payment of $588.
Under the income-based repayment plan, those monthly
payments would be $259--that's $329 less.
Over the course of the year, that legal aid attorney would
pay $3,948 less than he or she would have paid under the
standard repayment plan.
And if the legal aid lawyer stayed in the job for 10 years,
the remaining debt would be cancelled--in this case, a
benefit of over $50,000. Or let's consider the example of a
police sergeant with a child in Arkansas, who makes $28,289 a
year:
If that sergeant graduated with the average loan debt for
students for the Arkansas--$17,000--he or she will have a
monthly loan payment of $196.
Under the income-based repayment plan, because the sergeant
is supporting a child, those monthly payments would be
reduced to $97.
Over the course of the year, the sergeant would pay $1,185
less than he or she would have paid under the standard
repayment plan. And if he or she stayed in law enforcement
for 10 years, the remaining debt would be cancelled--in this
case, a benefit of over $14,800.
Our bill pays for these valuable measures, not by
increasing the burden on taxpayers, but by reducing
unnecessary subsidies for lenders who take part in the
federal student loan programs.
Today, thousands of lenders offer college loans. The
largest, Sallie Mae, is so profitable that a group of
investors recently offered to buy it for $25 billion--more
than 40 percent above the value of its stock.
The lenders claim that if Congress reduces their subsidies,
it won't be profitable for them to make student loans
anymore, and they'll leave the business. But when Congress
has reduced subsidies in the past, the lenders' profits have
still gone up, not down. Here's a chart that Sallie Mae
itself produced. It shows that even though Congress has
reduced subsidies several times in the past, the company's
profits have continued to go up and up. In 2006, Sallie Mae
made $1.1 billion in overall profits. Obviously, there's
still plenty of room to reduce lender subsidies further.
Lenders also claim that if we reduce their subsidies,
they'll be forced to reduce the benefits they offer to
borrowers on student loans. But what they don't tell you is
that many of the benefits they offer are phantom benefits
that few borrowers ever receive. According to an independent
analysis by Finaid.org, the average borrower saves only $118
through borrower benefits offered by private lenders.
By contrast, the Pell grant increase in our bill will
provide an additional $2,360 in grant aid over the next four
years, which translates to $3,260 in lower loan payments.
When fully phased in, the increase will provide an additional
$4,360 per student, which means over $6,000 less in loan
payments over the life of the loan. If lenders wanted to
offer a comparable benefit, they would have to provide over
40 times the level of benefits they now provide.
Finally, lenders claim that if we cut their subsidies,
small lenders will be forced out of the FFEL program,
restricting borrower choice and leaving only the big banks in
business. Smaller lenders have made this argument before. But
when Congress has made sensible cuts in the past, the number
of lenders has risen, not fallen. Right now, more than 3,500
lenders make federal student loans--the highest number ever
in the history of the student loan program. Let's be clear
about what smaller lenders typically do. Most of them simply
sell the loans to the larger lenders, soon after the loans
are made. That's why the biggest lenders hold so many loans.
Lenders will no doubt continue to complain that the cuts in
this bill are too deep, but the reality is that our bill
restores the balance to this grossly unfair student loan
system by directing funds to the students, not to the banks.
It will also encourage long-term reform of the student loan
system by creating a pilot program in which an auction will
be used to see what subsidies are necessary to keep banks
involved in the student loan program.
For years, the federal government has used auctions to
determine prices on everything from broadcast spectrum
rights, timber-cutting rights, oil and gas drilling rights--
even the price of infant formula delivered through the WIC
program. There's no doubt we can use auctions to operate the
student loan programs more efficiently. The money we save
through this pilot program will be sent back to where it is
needed most--to increase access to college for students
through a state matching grant program.
I also want to reiterate my commitment to the Higher
Education Reauthorization bill. Just a few weeks ago the
Senate voted unanimously for this bill. It's critical that we
complete work on it this year.
The reauthorization bill takes steps to ensure that the
student loan system is working in the best interest of
students, by pursuing needed ethics reforms in the student
loan industry.
It simplifies the federal financial aid application and
delivery process, to ensure that this complex system does not
work as a barrier to access for low-income students.
It demands that colleges do their part to keep college
costs down. If we do our part to provide needed student aid,
they must do their part to keep their tuition and fees
reasonable.
And it reforms and improves our teacher preparation system.
Teachers are the backbone of our schools. The reauthorization
bill promotes high-quality teacher preparation programs, and
helps recruit and retain high-quality teachers in high-need
schools.
The Higher Education Reauthorization bill goes hand in hand
with the legislation before us today. Senator Enzi and I look
forward to working with our colleagues in the House to ensure
that it is also enacted before the end of this session. For
many years, Congress was guided by one clear principle with
respect to higher education--that no qualified student should
be denied the opportunity to attend college because of the
cost. I know how important that principle was for President
Kennedy. My brother believed very strongly that if you work
hard, study hard, and are accepted to college, you should be
able to attend the college of your choice--without regard to
cost. That view resonated powerfully with students and
families, and it helped create the groundswell that led to
the creation of the Higher Education Act of 1965.
We've lost sight of that principle in recent years, but
with this bill, we will renew it once again. I'm grateful to
my colleague Senator Enzi, and to all the Members of our
Committee who helped shape this important legislation.
Because of their able work, the Senate approved the
legislation earlier this summer with a resounding bipartisan
vote, and I look forward to final passage of this bill by a
similar strong bipartisan majority.
I again thank all of our colleagues and staff and yield the floor.
The ACTING PRESIDENT pro tempore. The senior Senator from Wyoming is
recognized.
Mr. ENZI. I thank the Senator from Massachusetts, Mr. Kennedy, for
his great explanation of what is in the bill we just passed. As the
debate on this conference report comes to a close, it is necessary to
thank those who worked long and hard to get us to this point. It has
been a lot of people. I appreciate the extensive list that Senator
Kennedy had.
Chairman Kennedy has done a marvelous job of pulling everybody
together, covering very diverse topics, some of them very
controversial, and working through them. What I always like to point
out to people is that is not always a compromise. Sometimes it is a
third way. What we are trying to do is get to a goal. This bill goes a
long way toward getting to that goal. I thank him for his commitment to
not only moving forward with this bill but to joining me in pressing
for the comprehensive higher education reform bill.
[[Page S11261]]
I would also like to thank everyone on my staff who has worked to get
us to this point. In particular, I would like to thank Katherine
McGuire, who directs the whole operation, all of the different bills we
are working on. There are actually about 55 in the process, covering
health, education, labor, and pensions.
I would like to thank Beth Buehlmann, who has been the education guru
on our side, who has led the team that I have that has helped put
together these different packages in the education area. I have to say,
our committee covers everything from birth to death because we start
with preschool and then we have elementary and secondary education,
then we have higher education, then we have continuing education. In
this day and age, it is important for people not just to graduate from
college, it is important for them to continue to learn. Of course,
there is a direct relationship between how long you continue to learn
and how long you live. But it is going to be even more important as the
baby boomers are retiring that we encourage a lot of them to continue
in the workforce--perhaps in different jobs than they have ever done
before. So we have a lot of things we need to get done yet that we have
been working on.
Head Start is one of those preschool programs we have. We actually
handle 69 preschool programs. We need to do some condensing on that so
we eliminate some duplication, some excess, and some spending. But Head
Start has already passed the Senate, it has already passed the House.
We are working very carefully to get that finished up now with a
conference report, and I think we are making good progress on that.
On No Child Left Behind, the House has informed us they now have
their draft proposal ready to discuss. We have been working on that in
a very bipartisan way for a long period of time now, going back into
the last session of Congress and now into this one. Again, I
congratulate Senator Kennedy for the way he has held coffees to bring
in experts who can clear up, in a more casual atmosphere, some of the
difficulties, give us a better understanding and share with us some of
their ideas on how that can be achieved. It has been extremely helpful.
We have had meetings with Chairman Miller and Ranking Member McKeon
from the House along with the President and First Lady and the
Secretary of Education on numerous occasions. Those have been very
bipartisan.
I would be very remiss if I failed to mention the commission that has
been working on No Child Left Behind that provided us with a number of
proposals, suggestions, advice on what needs to be done to make that
even more effective. Those have been, again, worked on in a very
bipartisan way to see which fit with all the other ideas we have. I
think we will come up with a plan for that which will improve the
system. It will eliminate some of the feeling that it is just about
evaluating teachers and will give them more tools to know what their
students are lacking so we do not leave whole groups of children, or
individual children, without an education. That is the whole purpose of
the program.
We are also trying to work in the high school area, where we can
eliminate dropouts and eliminate some of that remedial work which is
needed when they get to college. That remedial education costs billions
of dollars to parents and to taxpayers.
Another important piece to this puzzle that we need to do is
continuing education. We have passed unanimously through the Senate,
twice over the last 3\1/2\ years, the Workforce Investment Act. This is
an act which would train 900,000 people for higher skilled jobs or
different jobs than they have held before, so they can retire and do
something different and still be a contributing part of the workforce
and continue to have revenue coming in. But we have never been able to
conference that bill. I think that is a crime. We need to get it
through once again, through the Senate, and get it conferenced.
I know some of the concerns were what might happen in conference. Now
it is our side that should have the concerns about what could happen in
conference because, as we have seen in conference, actually the
minority can be left out of the process. I hope that would not be the
case. But there is a lot of devilment that could be done, and that is
why we didn't get to conference the Workforce Investment Act. I kept
assuring that would not happen in conference, but now the other side
should know for sure that anything they were worried about the
Republicans doing in conference will not happen. I will try to convince
the Republicans that the Democrats will show equal courtesy and we will
not have to worry about what they might do in that bill and we will
wind up with something that will actually train people to higher
skilled jobs so we don't have to outsource those jobs to other
countries. That is what is happening now. We don't have this training
process to the level of flexibility where it really serves the people
in the new occupations that are coming up.
The kids in school now will undoubtedly have more than a dozen
different careers. Not different employers; that is real easy--you just
quit one, move to an another, work essentially the same kind of job.
That is not what I am talking about. I am talking about moving to a new
career. Why is that essential? Because a lot of the jobs that are
available today will not be available in the future. Out of those 14
different occupations that a person will probably have, 9 of them
haven't even been invented yet. That is how the world is changing. We
have to be sure that the whole education process, from preschool to
death, conforms to the new economy so people in the United States,
citizens of the United States are the ones getting the good jobs; that
we are not sending them, with the new technology, to other parts of the
world. We can do it. We are a very innovative country.
This bill we have done today will go a long way to helping in higher
education, but what we focused mostly on was just the financing. There
are a lot of pieces of higher education which go beyond that and which
the chairman and I have been emphasizing to the House that they need to
get done, and we are hoping to have some very firm dates on when they
will get that done. This could get into a Presidential election
situation if it goes much longer. That probably would not be productive
for higher education or our kids, so we need to get it done right away.
I have mentioned numerous times the things that have been left out of
the reconciliation bill. I will not go back through all of those again,
although I have some great charts, but I would emphasize again that
needs to be done.
I will mention one area again because this goes back to a story from
my earlier days. My first child was applying for college. I had to face
this formidable form as an accountant. As an accountant, I have trouble
understanding not only parts of the form but parts of the worksheet.
This is a typical Government thing. They give you a worksheet to be
able to fill in a blank of the final form, and the worksheet is almost
as difficult as the form. As an accountant, it is a little tough
sometimes to know what is even supposed to go into the blanks, but that
is OK because the Government always provides extensive instructions on
how you can interpret the blanks you are supposed to fill in. Hopefully
on the new one-page form we have they will not have to refer to
extensive explanations.
I think it is pretty clear what we have on the new ones. It is
supplemented. Instead of taking pieces off of your income tax form to
report on, you already have the form done, so the form can be submitted
with it, and that has greater explanation than trying to do all of the
math Worksheet B calls for. So we have simplified that greatly. But
that is besides the fact that now it is very formidable, and that keeps
a lot of people from ever applying for financial aid.
I had the opportunity to fill out one of these when my first child
was getting ready to go to college and was picking a fairly expensive
college, and I thought maybe we can qualify for help, and the financial
officer said: Yes, I think you probably can; you just have to fill out
this little form.
We filled it out. We were in the shoe business. We had a single shoe
store. It was a family shoe store. My wife and I both worked there, and
the kids worked there some of the time, and we had other people who
worked for us,
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too. We were going through all the crises that small businesses today
have to deal with, like, how do you afford the insurance for your
people? It is not fair to buy insurance for yourself unless you buy
insurance for the people who work for you. We were going through a
number of those crises. Anybody in small business knows there are those
times when you wake up in the middle of the night with an ``O my word,
how am I going to pay the bills today?''
Aside from that, I filled out the form and got the results back and
they said: You really don't qualify. There are two essential reasons.
One is, if you sold off a fourth of your inventory each year, you
wouldn't need the help. If you sell off a fourth of your inventory and
your child makes it through school in 4 years--which is not standard,
but I do want to say all three of my kids did graduate in 4 years--but
if you sell off one-fourth of your inventory each year, you can afford
to send your child to college without any financial help.
I had to point out to them that if I sold off one-fourth of my
inventory each 4 years, I would be out of business by the time my child
graduated.
That is not quite fair, and hopefully we have made some corrections
so that we won't be putting people out of business in order to get
their kids through college, but we will be expecting them to make
contributions to the expense of their education.
The other surprise was we had made our kids work. We made them save a
substantial piece of what they earned when they worked so they could
pay part of their way to college. This same financial officer said to
me: You know, she would have been better off if she had bought a car
because that wouldn't count against her.
What kind of incentive is that for the kids in this country? They
really will appreciate their education more if they participate in
their education. So I think if we can get that reauthorization part
through, we will protect and incentivize kids to actually work toward
their college education, so it will mean more to them as they go
through, and that will probably cut down a little bit on how long it
takes them to get through school because part of that money is theirs.
I would like to see every kid be able to get an education and have some
money left over when they get their education, not a whole bunch of
loans. We will be able to help with that by passing this reconciliation
conference report.
I do have some concerns, as everybody does when they pass a bill. I
am the only accountant in the Senate, so when we look at some of this
stuff and the way we score things, I do have some difficulties with it.
We need to be aware of them because these are going to come back to
bite us later.
One is the chart the Senator from New Hampshire used earlier, which
shows how scoring works around here, and that is that you can provide
benefits, and then if you can end the scoring at a particular point,
you can drop off to a zero and show that you fully funded it.
It is not going to work that way in reality. I do not know who is
going to be in the majority when we get to 2012. Nobody does. But
whoever is in the majority at 2012 has to figure out how to fill the
gap of the dip in the chart, as well as take care of the inflation that
has happened in the meantime, and, hopefully, greater Pell grants as a
whole, in reality, at that point in time.
Why am I concerned about this? Well, we have done some things with
interest rates over a period of time that have had some of these same
effects on students. We always try to figure out how we can get the
lowest interest rate for kids who are going to college. And that is
important. And a number of Senators, including the Presiding Officer,
have pointed out the importance of that.
Well, we got involved in interest rates actually when President
Carter was in office, and interest rates rose to 18 percent and were
going higher, and did go higher. We had no idea how much higher. We had
no idea whether they would ever come down again.
So Congress got involved with student loans and said: 6.8 percent is
the highest that anybody is going to pay while they go to college, and
we did kind of put some ends on that. In the meantime, of course,
interest rates came back down. We went to variable rates, which allowed
the Government to fluctuate more on interest rates. But each time, it
becomes a problem for whoever is in the majority because you can pin
the difficulty on them and say: `You have got to solve it. And no
matter what solution you come up with, we are not going to like it, and
we are going to make it into a campaign issue.'
Well, I hope we do not do that all of the time. But it is important
for people to realize that we are cutting the interest rates in this
reconciliation bill we just did, and we are going to get them down to
3.4 percent. But that is over a period of time. So students who are in
college and just heard the discussion should not expect to go get a
loan--or as soon as the President signs the bill--at 3.4 percent. That
gets phased in. It will get down to 3.4 percent. But then it ends, and
we run into the same situation that I pointed out a minute ago; that
one party or the other is going to be in the majority at that time, and
they are going to have to solve that problem of how we keep the
interest rate at 3.4 percent or lower, or match up to higher rates,
because they all have a cost.
Now, how does that cost get handled? Well, it does not make a whole
lot of difference to the banks because we subsidize them up to a level,
and we change that from time to time too. The subsidy is what we have
been talking about in this reconciliation bill. You can offer this
lower rate to the students, and then we will provide a subsidy so that
you make a reasonable rate of return. Now, we always have a little
trouble deciding what that reasonable rate of return is, and that is
what we are talking about.
Two years ago, we cut that subsidy, and we cut it pretty severely and
made billions in savings off of cutting that corporate subsidy.
Now, at that time what we did is put half of the savings in the
subsidy, which actually comes from the taxpayers,--You have got to
understand that it is from the taxpayers that we are doing this--but we
took half of that and we put it to deficit reduction, which is kind of
a return to the taxpayers.
We took the other half and did a number of things for students. We
decreased loan origination fees to 0 percent. We put $8 billion into
specialized kinds of Pell grants, which were the SMART and American
Competitiveness Grants for science, technology, engineering, math, and
some critical foreign languages. That is a real need for this country.
If we do not address that need, we are going to have some difficult
economic times in this country. So we said we have to get more young
people involved in science, technology, engineering, and math. And we
took care of the college portion of that, encouraging them with a
smaller amount their freshman year, and then a little bit bigger in
sophomore year, and a lot bigger in their junior and senior years if
they would do science, technology, engineering, and math. That came to
$8 billion.
We also increased loan limits for freshmen and sophomores. We
increased asset protection, and we increased auto zero to $20,000. That
is the income level up to which you automatically get a full Pell
grant. So we did a number things with the money for students. At that
point in time we were criticized for a lot of things we did not do for
students that could have been done, just as there will be criticism
with this bill for things that could or could not be done.
I do think we arrived at a good solution, one that will work, one
that I am hopeful and pretty sure the President is going to sign, that
will make a difference for young people. But I do want to emphasize
that we do need to finish that reauthorization package. Without that, a
lot of this does not work. It sounds good, but it does not work. So
let's get the whole job done.
Since 2004, we have extended the Higher Education Act eight different
times. We have said: `What we have now is good enough, so we cannot
reach any other kind of a decision. So let's just extend it again.' I
do not want to have a ninth extension. I want to get the job done.
There are some great things. We have hundreds of pages. The bill is
that thick, for reauthorization, that does good things for students.
This is the part we are talking about we have not done yet. This has
stuff in it that needs to be done, and we can do it.
[[Page S11263]]
The agreement in the Senate on this was 95 to 0. You don't get more
bipartisan than 95 to 0. I am pretty sure if the other five people
would have been here, it would been 100 to 0. That is agreement. That
is because this desperately needs to be done. I am glad the House is
going to take a look at it. In fact, the chairman told me that they
would be using this bill as a blueprint.
I assured him if he used that as a blueprint and took the wording
that goes with it, it can be done reasonably. Around here we usually do
not do that sort of thing, though, because each of us has to get a
fingerprint on everything, and that slows down the process sometimes.
But I suspect it will be fairly close to what we have done here. It
needs to be done as soon as possible.
Now, I began my thank-yous earlier. I want to finish my thank-yous
and my speech. Besides Katherine McGuire and Beth Buehlmann on my
staff, I wanted to thank Ann Clough, Adam Briddell, Amy Shank, Ilyse
Schuman, Greg Dean, and Kelly Hastings.
I would be very remiss if I did not thank the members of Senator
Kennedy's staff for their hard work and cooperation: Michael Myers,
Carmel Martin, JD LaRock, Missy Rohrbach, and Erin Renner.
Finally, I would like to thank all of the members of the HELP
Committee and their staffs for their hard work throughout this process.
This has been one of the most contentious committees in years past.
When we are working on education and health, this is one of the most
cooperative committees in the Senate.
We do intend to make progress in all four of the areas that we work
in. We got the pensions area pretty well wrapped up last year. There
has been a little technical correction portion that we have to get done
yet.
There are always different things in the pension area. But we made
some significant changes in the labor area last year, too, that have
come to light in recent weeks with the first change, the biggest change
in mine safety in 28 years. We will be reviewing the tragedy that
happened in Utah to see how that fits in with what we did or did not
get accomplished and will look at future changes.
But it took us 28 years to make the first major change. It will not
hurt if it gets to 24 or 28 months before we get the reports in that
help us to analyze any other changes that we need to make.
Once again, I thank my colleague from Massachusetts, Senator Kennedy,
for his tremendous effort, his tremendous knowledge, his capabilities
to explain and come through with the ideas, sometimes compromises, but
quite often a third way of doing things. It makes a huge difference in
the result.
I yield the floor.
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