[Congressional Record Volume 160, Number 58 (Wednesday, April 9, 2014)]
[Extensions of Remarks]
[Page E558]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      INTRODUCTION OF THE INVESTING IN STUDENT SUCCESS ACT OF 2014

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                          HON. THOMAS E. PETRI

                              of wisconsin

                    in the house of representatives

                        Wednesday, April 9, 2014

  Mr. PETRI. Mr. Speaker, I am introducing legislation today to expand 
access to a new and innovative private financing option to help 
students pay for postsecondary education.
  The bill, entitled the Investing in Student Success Act, would create 
a legal framework where individuals or organizations can provide 
students with money for school in exchange for the student agreeing to 
make payments linked to their income for a set period of time after 
graduation. Students would have no loan balance to repay, so some 
students might end up paying less than the amount given to them and 
others more. These plans would serve as an alternative to student 
loans.
  This concept is extremely innovative in its approach to financing 
college. Far too many students struggle to obtain enough financing 
through traditional sources to pay for college, and many others are 
saddled with unaffordable payments after graduation. These plans would 
help all students get the financing they need--including students from 
disadvantaged backgrounds--but without the anxiety that comes with 
traditional loans.
  These ideas were originally proposed by Milton Friedman and were 
recently discussed in a report published by the American Enterprise 
Institute (AEI). One of the recommendations of the report was for 
Congress to create a legal framework that would provide investors with 
clarity regarding tax treatment, consumer disclosures, and other 
relevant aspects of these contracts. While there are a few small 
companies operating in this market, the report argues that the lack of 
legal clarity has prevented the growth of these financing options on a 
wide scale.
  The AEI report also highlights the potential for these financing 
tools to help address the issue of college costs. It argues that 
investors will likely offer more generous terms to students for higher 
quality institutions and programs or for fields that are in high demand 
in the workforce. Therefore, by helping students navigate to programs 
that will set them up for success, these tools would likely put 
pressure on institutions to cut costs and improve quality.
  Mr. Speaker, as some form of postsecondary education becomes 
increasingly essential to success in today's economy, we should ensure 
that students have an array of beneficial tools to help them finance 
their studies. I hope that my colleagues will join me in helping to 
make this new and innovative financing option available to them.

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