[Congressional Record (Bound Edition), Volume 153 (2007), Part 17]
[Senate]
[Pages 23844-23845]
[From the U.S. Government Publishing Office, www.gpo.gov]




  COLLEGE COST REDUCTION AND ACCESS ACT--CONFERENCE REPORT--Continued

  The ACTING PRESIDENT pro tempore. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I rise to speak in support of the conference 
report that we will be voting on tomorrow morning. I will also have 
more comments tomorrow morning. I wished to give a little bit of an 
explanation of where we are. There is a limited time of debate in the 
morning prior to the vote. I am sure Senator Kennedy and I will give a 
little fuller explanation of the vote and the reconciliation package, 
even following that discussion, so anyone who is interested can have as 
much knowledge about what is in the conference report as they could 
get, except by reading it. So most of the comments will be tomorrow 
morning, but I wanted to make a few preliminary comments tonight since 
the time is limited before the vote in the morning.
  As I mentioned, I do rise to speak in support of the conference 
report.
  Two years ago, Republicans took the lead in reducing subsidies to 
lenders and providing greater benefits to students through more grant 
assistance and reduced loan costs. In this conference report, we 
produce an additional $22 billion in savings by further reducing 
subsidies to lenders and applying those savings to increased grants for 
low-income students, for expanded loan forgiveness, and for reduced 
interest rates on undergraduate subsidized loans.
  We all agreed that if there is an excess subsidy in the student loans 
programs, it should be eliminated. The key questions are how much 
excess there is and how to eliminate it. There are not any clear-cut 
answers to those questions. One approach included in this conference 
report is the reduction of the special allowance payments, the SAP, to 
lenders.
  I am pleased we retained 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 serve students locally. For this reason, we 
maintained the 15 basis points differential cut in special allowance 
payments between for-profit and not-for-profit lenders. The cut in the 
SAP to for-profit lenders is 55 basis points and for not-for-profit 
lenders is 40 basis points.
  We took a first step in this conference report toward refining the 
way these levels are determined, by including an auction pilot that 
lets the marketplace determine the appropriate SAP level for the Parent 
PLUS Program, which is a small part that allows us to have a little 
preview of how an auction process would work, and also help to work out 
any bugs if it works out to be a good demonstration project.
  This conference report provides additional need-based grant aid which 
is a critical component of increasing access to and 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 increase by more than 
$1,000. Additionally, we increase the income protection allowance so 
students are not penalized for working and for saving for college. It 
has been a problem in the past. If you work and save for college, you 
would have been better off to have bought a car because it would count 
against you. 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 disruption in the student loan market and ensure 
that students have access to Federal student loans.
  However, I wonder if we are going too far in cutting the support for 
the largest Federal financial aid program, the Federal Family Education 
Loan Program--that is the private loan program, the FFELP program. The 
challenge we face is we will not know until it is too late if the cuts 
we have made have undermined the stability of the program and created 
hardship 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 does nothing to help students pay 
tuition bills. Further, in reality, cutting the interest

[[Page 23845]]

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.
  A quick calculation of the real benefit borrowers will receive shows 
that for a cost of $6 billion to taxpayers, individual borrowers will 
see savings of only $6 a month. I would much rather see the $6 billion 
go to help low-income students through a Pell grant increase than to a 
hollow sound bite, and that is the approach the Senate took, to 
increase the Pell grant rather than the reduction in the distant future 
of a small percentage in the interest rate.
  Finally, as an accountant and a member of the Budget Committee, I 
would be remiss if I didn't point out that we are debating a conference 
report on reconciliation which is a process designed to reduce the 
Federal deficit, not to create new mandatory programs and increase 
entitlement spending. I am disappointed to say the net savings for 
deficit reduction in this conference report is only $750 million. I 
would admit that is the requirement we were given by the budget to 
produce--$750 million. The last time we did a budget reconciliation we 
put half the money that was saved by canceling some of the subsidies to 
the corporations to budget deficit reduction.
  I do wish to remind my colleagues that a few weeks ago we considered 
reconciliation and higher education reauthorization together. This is a 
key point. The Senate did it consecutively.
  On a Thursday, we did the reconciliation bill. The next voting day we 
had was a Monday, and on Monday we passed the higher education 
reauthorization.
  This is a bill that is long overdue. We have done short extensions 
eight times, and we recognize that we passed them together in the 
Senate with strong bipartisan support. In fact, the reauthorization 
bill vote was 95 to 0. So we not only achieved savings, but we ensured 
the quality and effectiveness of our Federal Student Aid Programs. 
Therefore, support for this conference report is limited by the fact 
that we are not also considering the larger higher education 
reauthorization package, although I am expecting that we will get some 
very solid agreement from the House folks to begin consideration of 
that, I hope yet this month, so it can be completed early and we can 
have both parts of the package.
  Tomorrow I will go into a little bit more on what is in that other 
package that completes what we are doing in reconciliation. In the 
reconciliation we are eliminating some of the subsidies, and then we 
are reallocating that money. That money will go to help students. But 
the bulk of the help actually comes in the reauthorization package. It 
is ever so essential that we do that.
  I think the Senate would have been agreeable to put the two bills 
together and get them both finished at the same time, but it is not 
possible because the House has not finished action on the Higher Ed 
reauthorization.
  Tomorrow I will go into some more detail on what it is that is 
missing from the package by just doing the reconciliation part of the 
package. I will be encouraging people to vote for the reconciliation 
package and then the reauthorization package when we are able to get 
that together.
  I will be encouraging the House, in every way possible, to make sure 
they get that reauthorization part of the package done, and I have some 
relative assurance that they are going to do it soon. I would like some 
more solid assurance they are going to do it soon.
  With that, I will conclude my remarks for tonight and look forward to 
the bipartisan discussion we will have tomorrow. I want to thank the 
Senator from Massachusetts for the great work he and his staff did on 
this package. It is not often in this body that people listen and then 
try and find the solution. I would say they and my staff have worked 
together well and got us here. You never get a perfect package around 
here. This is one that will help a lot of people.
  I yield the floor.

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