[Congressional Record Volume 158, Number 103 (Wednesday, July 11, 2012)]
[Extensions of Remarks]
[Pages E1226-E1227]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   SUPPORTING PROTECTION OF FEDERAL FINANCIAL ASSISTANCE FOR HIGHER 
                               EDUCATION

                                 ______
                                 

                          HON. DANNY K. DAVIS

                              of illinois

                    in the house of representatives

                        Wednesday, July 11, 2012

  Mr. DAVIS of Illinois. Mr. Speaker, President Franklin Delano 
Roosevelt once said, ``We cannot always build the future for our youth, 
but we can build our youth for the future.'' College access and success 
are fundamental stepping stones toward economic security and global 
competitiveness. As policymakers, it is imperative that we support 
students in making college affordable so that our citizens and nation 
can prosper.
  I strongly supported the passage by the House of the bipartisan 
Senate agreement to prevent a doubling of the student loan interest 
rates. Without this action before July 1, more than seven million 
students would have seen their interest rates double, resulting in an 
approximate $1000 additional debt burden per student for this year. 
Indeed, failure to act would have added $6.3 billion to students' debt 
burden in 2012, with 1.5 million African-American students and 1 
million Latino students experiencing an additional $1.5 billion and $1 
billion in loan repayment costs, respectively.
  Unfortunately, the agreement prevents the interest rate hike by 
cutting student financial aid, continuing a disturbing trend in which 
the Republican Leadership insists that low-income and middle-class 
students pay for federal student aid programs and deficit reduction. In 
the last two years, the Republican Leadership has insisted on multiple 
cuts to student aid, including: elimination of the interest subsidy for 
graduate student loans; elimination of the interest subsidy for the 
six-month grace period after finishing school; elimination of summer 
Pell grants; reduction in the number of semesters a student can receive 
Pell grants; erection of barriers to qualifying for the maximum Pell 
grant; and reduced eligibility for the minimum Pell grant award. These 
cuts require low-income and middle-class students to incur roughly $20 
billion in the cost of their federal loans and resulted in 145,000 
students losing their Pell grants. Rather than viewing federal support 
for higher education as an investment in our nation, Republicans in the 
House prefer to subsidize oil companies that make tens of billions of 
dollars in profits rather than help low-income and middle-class 
students afford college. I firmly believe that we must help all 
citizens access the American dream, not just the most privileged. We 
must strengthen the system of student aid, not weaken it.
  In addition to interest rates, there are multiple other education 
policies that lawmakers must support in order to prepare our youth for 
the future. For example, we must increase Pell Grants, which constitute 
a critical avenue by which low-income students access higher education. 
If Pell Grants are reduced in any way, attending and completing college 
will be beyond the financial reach of the vast majority of low-income 
students. Reductions in Pell also will have a disparate negative impact 
on racial and ethnic minority groups given that 46% of African 
Americans, 39% of Hispanics, 36% of American Indians, and 22% of Asian 
American and Pacific Islander undergraduate students rely on Pell, with 
African Americans representing about one-quarter and Latino Americans 
representing approximately one-fifth of Pell recipients. For the 2012-
2013 academic year, the maximum Pell Grant will be at a historic low, 
covering less than one-third of the cost of a four-year degree. This is 
unacceptable.
  Further, policymakers must also maintain consumer protections on 
student loans, such as income-based repayment as well as re-institute 
bankruptcy protections for private student loans. Income-based 
repayment is a critical improvement to financial aid that makes higher 
education affordable by limiting repayment based on the income and 
family size of borrowers. For most borrowers, loan payments end up 
being less than 10 percent of their income--or nothing if the borrower 
experiences financial difficulty. After 25 years of qualifying 
payments, the remaining loan amount is eligible for forgiveness. These 
Democratically-championed policies promise to help borrowers handle 
their student loan debt in a responsible manner as they enter the 
workforce, have families, and purchase homes.
  Consumer protections related to bankruptcy for private student loan 
debt are equally important, but will require Congressional action. 
Unfortunately, without any hearings, in 2005 Congress made private 
student loans by for-

[[Page E1227]]

profit lenders extremely difficult to discharge in bankruptcy even 
after meeting the restrictive criteria for bankruptcy, treating private 
student debt in the same manner as debts for criminal penalties and 
back taxes. This 2005 change gave special federal protections to for-
profit lenders, penalized borrowers for pursuing higher education, and 
provided no incentive to private lenders to lend responsibly. Private 
education debt is no different than other consumer debt; it involves 
private profit and deserves no privileged treatment. Congress must 
restore fairness in student lending by treating privately issued 
student loans in bankruptcy the same as other types of private debt 
This is why I introduced the Private Student Loan Bankruptcy Act, which 
I will continue to champion until it is law.
  A strong economy requires an educated workforce, and an educated 
workforce comes from ensuring students and their families have what 
they need to prepare for, enroll in, and complete college. Given that 
student debt has surpassed credit card debt for the first time in 
history, our economy remains fragile, and the labor market demands 
increased skills, now is not the time to make deep and permanent cuts 
to critical college programs serving needy students. I urge the 
Republican Leadership to invest in education and support students. I 
will steadfastly protect federal financial assistance for higher 
education so that we can build our youth for the future.

                          ____________________