[Congressional Record Volume 155, Number 132 (Thursday, September 17, 2009)]
[Extensions of Remarks]
[Pages E2313-E2314]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           STUDENT AID AND FISCAL RESPONSIBILITY ACT OF 2009

                                 ______
                                 

                               speech of

                           HON. MAXINE WATERS

                             of california

                    in the house of representatives

                     Wednesday, September 16, 2009

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 3221) to 
     amend the Higher Education Act of 1965, and for other 
     purposes:

  Ms. WATERS. Madam Chair, I rise to support H.R. 3221, the Student Aid 
and Fiscal Responsibility Act of 2009. I'd also like to commend my 
colleague from California, Chairman George Miller for his hard work to 
bring this bill to the floor today.
  Now more than ever, Americans need affordable and quality educational 
opportunities that will help make our economy stronger and more 
competitive. This bill embraces President Obama's challenge to produce 
more college graduates by the year 2020 by making higher education more 
accessible. This legislation achieves that goal by transforming the way 
student loan programs operate.
  The Student Aid and Fiscal Responsibility Act is the single largest 
investment in aid to help students and families pay for college in 
history--and it does so at no cost to taxpayers. The bill reforms the 
system of federal student loans to save taxpayers $87 billion--and then 
invests $77 billion of those savings back into education, particularly 
by making college more affordable, and directs $10 billion back to the 
Treasury to reduce entitlement spending. Among its many provisions, I 
am especially pleased that the maximum Pell Grant is increased from 
$5,350 in 2009 to $5,550 in 2010 and to $6,900 in 2019 and that 
interest rates are kept low on subsidized federal student loans. This 
will help more students graduate with less debt. Unfortunately, too 
many students are graduating with record debt, partly because grant aid 
doesn't cover nearly as large a share of college costs as it used to. 
This legislation will allow us to invest $40 billion in the Pell Grant 
scholarship, to keep interest rates affordable on need-based federal 
student loans, to simplify the federal student aid application process, 
and to invest in other forms of aid that will help low-income, middle 
class and minority students pay for and complete college.
  H.R. 3221 will also stabilize and safeguard the federal student loan 
program that students and families depend on to pay for college. The 
intertwined economic and credit crises have exposed serious 
vulnerabilities in the structure of the federally-guaranteed student 
loan program--putting it on life support. Families shouldn't have to 
worry about whether the roller coaster fluctuations of the financial 
markets will hurt their access to low-cost student loans. By 
originating all new federal loans through the cheaper Direct Loan 
program, students and parents will be able to receive the same loans 
with the added assurance that these loans are entirely reliable, no 
matter what happens in the economy. This simple change will save 
taxpayers $87 billion over 10 years.
  H.R. 3221 also builds on the best of what works in the private sector 
to provide borrowers with top-notch customer service. The legislation 
will allow state non-profit lenders and private industry to continue 
doing what they do best--servicing loans. It will allow private 
entities to compete for contracts to service these loans--ensuring that 
students get the best services available and maintaining jobs in 
communities across the country. This bill also eliminates waste and 
creates a streamlined, cost-effective program for families and 
taxpayers. Each year, billions of taxpayers' dollars are being sent 
into a program that no longer works--and that the Department of 
Education can administer for a much lower cost. This is exactly the 
kind of waste we need to eliminate in tough fiscal times. By cutting 
out the middleman, this legislation will save taxpayers $87 billion 
over 10 years, according to the Congressional Budget Office. It's a 
smarter business decision for taxpayers and families.

[[Page E2314]]

  One of the most exciting provisions of this bill is that is makes an 
unprecedented $10 billion investment to make community colleges part of 
our economy's recovery. For years, business leaders have told us there 
weren't enough workers with the knowledge and the expertise for their 
specific industries. H.R. 3221 will change that. It will help us build 
a 21st century workforce by strengthening partnerships among community 
colleges, businesses and job training programs that will align 
community college curricula with the needs of high-wage, high-demand 
industries. It will provide community colleges with the tools to 
replicate programs that are successfully educating and training 
students and workers for these fields.
  As a former Head Start volunteer coordinator, I know first-hand that 
creating better educational opportunities demands that we invest in our 
students long before they reach college. To ensure that the next 
generation of students enters kindergarten with the skills they need to 
succeed in school, the legislation creates an Early Leaning Challenge 
Fund to increase high-quality early learning opportunities for low-
income children. It also will help provide every child with access to a 
world-class learning environment by investing in school modernization, 
renovation, and repair projects that will create healthier, safer, and 
more energy-efficient environments--a measure the House is already on 
record supporting.
  However there is one provision that was added to HR 3221 in the 
Education and Labor Committee that I am very concerned about. I'm sure 
it was included with the best of intentions, but for the record, I 
would like to share with my colleagues what I believe will be the real 
impact of this provision. Under current law, for-profit postsecondary 
schools are required to maintain a certain formula for how they receive 
federal funding, commonly known as 90-10. This means that a school 
must, at a minimum, acquire 10 percent of its funding from sources 
other than federal money. The original 90-10 provisions were added 
because too many for-profit schools were receiving large amounts of 
federal funding from students who indebted themselves without receiving 
the training they signed up for. I worked with a number of my 
colleagues here to help put those 90-10 provisions in place. This 
formula was enacted after years of students being ripped off and 
schools raking in record profits. If the schools violate 90-10, they 
are assessed a financial penalty.
  The provision added in Committee would weaken the current standards 
and basically kick the can down the road by extending the violation 
period from two to three years. This is completely unnecessary. What is 
the point of having the formula if we'll allow for-profit schools to 
continue to violate it?
  I am looking forward to work with Chairman Miller and other Members 
to make sure that the final bill does not include another victory for 
an industry that does not have students' best interests in mind. Moving 
forward, it is my recommendation that we revisit the rules that govern 
these for-profit schools and allow them to continue accessing federal 
funds but that also ensure that they fully report graduation and 
dropout rates, default rates, and job placement rates.
  In closing, this is not a perfect bill, but it is a tremendous 
investment in education for American families and I urge my colleagues 
to vote for passage on H.R. 3221, the Student Aid and Fiscal 
Responsibility Act of 2009.

                          ____________________