WASHINGTON, D.C-Today, Senator Edward M. Kennedy, Chairman of the Senate Health,Education, Labor, and Pensions Committee, released the following statement in response tothe passage by the HELP Committee of the Higher Education Access Act of 2007 and theHigher Education Amendments of 2007.
“This is a historic day for America's students. The HELP Committee has passed two bills thatwill increase access to college and make sure scarce federal dollars are going where they aremost needed - to students. This bill renews the promise that all citizens can achieve theAmerican Dream, while also ensuring that our nation remains competitive in the globaleconomy."
STATEMENT OF SENATOR EDWARD M. KENNEDY ON THE INTRODUCTION OF THEHIGHER EDUCATION ACCESS ACT OF 2007 AND THE HIGHER EDUCATIONAMENDMENTS OF 2007
Senate Health, Education, Labor and PensionsWhen Congress first passed the Higher Education Act more than 40 years ago, we were guidedby one simple principle - that no qualified student should be denied the opportunity to attendcollege because of the cost. In 1965, and again in 1972 when we established the Pell Grant,we recognized that access to a college education is a vital gateway to helping our citizensachieve the American dream.Shamefully, we’ve lost sight of that goal in recent years. Today, Americans are coming face toface with rapid changes in the global economy. They’ve seen the value of their wages decline,the cost of living go up, and their jobs shipped overseas. When I graduated from high school,good jobs were available to high school graduates. That is no longer the case. Today, 60percent of new jobs require some post-secondary education, compared to just 15 percent ofnew jobs half a century ago.
In the face of these challenges, a college education is more important than ever. But it’snever been more difficult to afford. The cost of college has more than tripled over the lasttwenty years. Today, average tuition, fees and room and board at our public colleges isalmost $13,000, and it’s more than $30,000 at private colleges. Each year, more than400,000 talented, qualified students don’t attend a four-year college because they can’t affordit. At the same time, the buying power of the Pell Grant - the lifeline to college for lowincomestudents - has shrunk dramatically. Twenty years ago, the maximum Pell Grantcovered 55 percent of costs at a public four-year college. Today, it covers less than a third ofthose costs.
As a result, students are sinking deeper and deeper into student loan debt.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 leavescollege with more than $19,000 in student loan debt. This mountain of debt is distortingcountless Americans’ basic life choices. It’s causing them to delay getting married, buying ahome, and starting a family. It’s also discouraging many young people from enteringoccupations such as teaching, social work and law enforcement - the low-paying but vital jobsthat bring large rewards for our society.
Meanwhile, as our students struggle to pay back their loans, the lenders who offer them aremaking more money than ever. We pay them enormous subsidies to take part in the federalloan programs, because the structure of the student loan programs is basically unchangedfrom forty years ago, when major subsidies were needed to attract lenders to participate.Today, thousands of lenders participate, and the largest, Sallie Mae, is so profitable that agroup of investors recently offered to buy it for $25 billion - more than 30 percent above thevalue of its stock.
That is why the legislation our Committee is considering today is so important. The HigherEducation Access Act of 2007 and the Higher Education Amendments of 2007 will providemore than $17 billion to help students and families pay for college. This legislation will helpreverse the crisis in college affordability. It will immediately and dramatically increase the PellGrant; help students manage their debt by capping student loan payments at 15 percent oftheir monthly income; and forgive the loans of those who enter society’s most valuableprofessions.
It will restore balance to our broken student loan system by reducing unnecessary lendersubsidies. To ensure that lenders and colleges follow high ethical standards, we’ve includedprovisions from my Student Loan Sunshine Act, and several other lender ethics and borrowerfriendlyproposals from Senator Enzi and Senator Clinton. Senator Dodd will be complementingthese efforts in the Banking Committee with companion legislation regarding privateeducational loans.
In short, our proposals will restore the fundamental principle that guided the Higher EducationAct at its inception - that no student should have to mortgage his or her future in order to payfor higher education today.
This legislation is the product of many hours of bipartisan negotiations among our CommitteeMembers and staff. Over the past four months, our staff has met, on a bipartisan basis, formore than 100 hours to work on these bills. Every Member of this Committee has hadmultiple opportunities to shape their provisions, and we will continue to work together as ourprocess moves forward. I particularly want to mention that we’ll be working closely withSenator Alexander on his ideas related to college accreditation.
Without a doubt, the most important aspect of this legislation is the fact that it dramaticallyincreases need-based grant aid to students. Everything we know about the collegeaffordability crisis tells us that low-income students and families are struggling the most.Earlier this year, after four years of broken promises from President Bush, the DemocraticCongress responded to this challenge by increasing the maximum Pell Grant to $4310. Now,the Higher Education Access Act will build on what we started by increasing the maximum PellGrant to $5,100 next year - a $790 increase -- and to $5,400 in 2011.
Make no mistake - the single best thing we can do to increase college access and affordabilityin America is to focus on increasing the Pell Grant. That is exactly what this legislation does.But it goes even further. Our young graduates are painfully aware of how difficult those firstyears after college can be, when their paychecks are small, but their student loan bills arelarge. Our legislation will help these students by giving them the option of capping their loanpayments at 15 percent of their monthly discretionary income.
It will also stem the tide of young people who are choosing not to enter public serviceprofessions by providing loan forgiveness to borrowers who stay in those professions for tenyears. Our society needs more teachers, emergency management and law enforcementprofessionals, public health doctors and nurses, social workers, librarians, public interestlawyers, and early childhood educators. Senator Harkin has been particularly vigorous in hissupport of loan forgiveness for public interest lawyers. Under our bill, we’ll produce more ofthem, because they - and all the groups I’ve just mentioned -- will be eligible for loanforgiveness.
A number of our Members have worked hard to ensure that our men and women and themilitary - and their families - are treated fairly in the student loan system. SenatorsBingaman, Murray and Murkowski deserve our thanks for authoring several provisions that willextend loan deferments for active duty service members and take other steps that will helpthose who serve our country attend college.
We’ve heard the arguments from the big lenders. They claim that if Congress reduces theirexcess subsidies to pay for the measures I’ve just described, they’ll be forced to reduce thebenefits they offer to borrowers on student loans. But obviously, a Pell Grant is far betterthan any benefit a lender could offer on a loan. And the lenders won’t tell you that many ofthe benefits they offer are phantom benefits. Some lenders offer more benefits to students athigh-end colleges, and fewer to community college and career college students. And often,most borrowers never actually receive all the benefits, because they often depend on studentsmeeting certain conditions, like paying their loans on time for three years.
In the long term, we must inject more market-based competition into the student loansystem, to make it as efficient to taxpayers as possible. Right now, there’s very littlecompetition in the loan programs because many colleges enter special deals to work with ahandful of lenders, and students seldom get their loans from anywhere else.
Instead, lenders should compete against each other to participate in the federal student loanprogram. The Higher Education Access Act takes a step in this direction by creating a pilotprogram in which an auction is used to see what subsidies are truly necessary to keep loansavailable to students. The money we save through this pilot will be sent back where it isneeded most -- to increase financial aid for students. I’m pleased that Senator Gregg hasjoined our call to use auctions to operate the student loan programs, and I thank him for hisleadership of this long-overdue idea.
Our legislation also addresses the serious ethics scandal over student loans. As investigationsby New York Attorney General Cuomo, other states, and our Committee have found, manylenders are entering into sweetheart deals with colleges. Some lenders offer gifts to collegeand university employees in order to secure their students’ loan business. We’ve documentedhow lenders who participate in the federal student loan program offer “educationalconferences" at luxury hotels, and offer free entertainment and free tickets to sporting eventsto college officials, in order to entice those officials to recommend the lenders to theirstudents. Our legislation makes these practices illegal, and protects students by ensuring thatwhen a college recommends a lender, it’s based on the best interest of students, and nothingelse. I’d like to acknowledge all the Members of the Committee for contributing to a strongbipartisan proposal on this issue.
The bills we consider today will take other common-sense steps to improve our highereducation system for students and families. Thanks to the leadership of Senator Reed andSenator Enzi, our legislation will dramatically simplify the federal financial aid form - theFAFSA - and examine how we can streamline the federal financial aid process even more inthe future.As we provide more aid to students, our bills will recognize that colleges also need to do theirpart to keep college costs down. The Higher Education Access Act will hold collegesaccountable for skyrocketing college costs by creating a nationwide watch list of collegeswhose costs are increasing costs at a rate greater than their peers, and by encouraging theDepartment of Education and colleges to publish more consumer-friendly information aboutcollege costs and programs.
Our legislation continues our focus on teacher preparation by strengthening partnerships withthe K-12 systems who hire the teachers, based on the most successful strategies likeinduction and mentoring. Senators Obama and Reed have been a leader on these provisions inthe bill.
Senator Brown has worked hard to maintain the strength of the TRIO programs, which preparestudents to go to college and stay in college. We include a new program to support thegraduation of more registered nurses - an effort championed by Senator Sanders and SenatorMikulski.
We also create a new student safety grant program to help colleges and universities improvetheir campus safety and emergency response systems. As the nightmare at Virginia Techmade us all too aware, tragedy can strike anywhere, including on college campuses.
From our earliest days as a nation, education has been the engine of the American dream. Wecan’t let it stall today. Our goal is to give all students and their parents the support they needto benefit from a college education and keep our country strong in the years ahead. Access tocollege is more than ever the key to opportunity for students and the key to a strong Americafor the future, and I urge the Committee to approve this important legislation.
