Higher Education Extension Act of 2004

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5186) to reduce certain special allowance payments and provide additional teacher loan forgiveness on Federal student loans, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 5186.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, today the House has an opportunity to pass a bill that will protect taxpayers, support school teachers and help poor schools ensure every student has the opportunity to learn from a qualified teacher.

I want to particularly thank my colleague, the gentleman from California (Mr. McKeon) and the gentleman from South Carolina (Mr. Wilson) for the vital roles they have played for bringing this bill to the floor.

For more than 10 years, a complex Federal policy known as the 9.5 percent ``special allowance'' has resulted in excess taxpayer subsidies for some student loan providers. This policy was adopted under the Clinton administration, and while some would call it a loophole, the loan providers were told by the Clinton administration that it was perfectly legal and legitimate.

The excess taxpayer subsidies being paid under this policy have in recent years begun to balloon, and if we fail to act, billions of dollars in excess taxpayer subsidies will be paid to student loan providers legally.

Now, this may be technically legal but I think it is unfair to taxpayers and unfair to students, and it is unfair to the schools, people who should be the beneficiaries of this funding. When you boil it down, it is just plain bad policy.

Eight months ago President Bush called on Congress to pass legislation to shut down these excess taxpayer subsidies. The Bush administration noted that ending the excess subsidies without legislation was likely to take at least 2 years. Because of the precedents established under the previous administration, it would take the administration 2 years to end the policy without legislation. Two years is too long to wait.

So the President asked Congress to pass legislation this year that would allow the 9.5 percent subsidies to be stopped now.

The legislation before us should be a no-brainer. It is called the Taxpayer-Teacher Protection Act because that is exactly what it will do. The bill will protect taxpayers by shutting down the excess subsidies to lenders, as the President has asked, and it will use the money to help teachers and poor schools across the country.

Rural and urban schools are confronting a shortage of qualified teachers in key subjects. This shortage is very serious and particularly hurts schools in our poorest communities.

According to the most recent data available from the National Center for Education Statistics, 67 percent of our public middle and high schools have vacancies in special education, 70 percent had vacancies in mathematics, 61 percent had vacancies in biological or life sciences. And according to the Committee For Economic Development, almost a third of high school math classes are taught by teachers who did not major or even minor in mathematics. For biology it is 45 percent, and in life sciences the percentage rises to 60 percent.

President Bush has repeatedly asked Congress to create new incentives for good teachers to teach in our poorest schools. The President has asked that we increase the amount of loan forgiveness that is available to qualified teachers in these key subjects who agree to teach for at least 5 years in our poorest schools. The President wants us to increase loan relief for the teachers from the current maximum of $5,000 to a new maximum of $17,500, more than triple the amount that is currently available.

The President asked us to do this after the No Child Left Behind Act became law. And he asked for it again last week in Springfield, Ohio, where I was with him at an education event.

Under this bill we will shut down the excess subsidies for now and use the money to provide loan relief for highly qualified teachers in high-needs schools, helping our schools deal with the teacher shortage.

The House last year overwhelmingly passed legislation written by the gentleman from South Carolina (Mr. Wilson) that called for similar teacher loan relief. Shutting off these excess subsidies now via this bill will also pave the way for us to devote billions of dollars over the next several years to college access programs for low- and middle- income students.

This was the original intent of the bill introduced by the gentleman from California (Mr. McKeon) and I back in May. And that bill, the College Access and Opportunity Act, would permanently shut down the excess subsidies as part of a comprehensive reauthorization of the Higher Education Act.

We continue to believe a long-term, multiyear reauthorization of the Higher Education Act is the proper vehicle for ensuring that the 9.5 percent subsidies stay shut down, because it would ensure that billions of dollars are used to expand college access for low- and middle-income students.

Let us make no mistake about this. We are closing the loophole, and once it is closed, it is not coming back. The only question today is whether Democrats and Republicans can agree on how the money should be used within the Higher Education Act.

We could not find an agreement on the big question of the reauthorizing the bill this year, and unfortunately, this looks like that debate will continue into next year. But in the meantime this bill gives us the chance to close down the subsidies now and use the money for something we can all agree is a worthy cause.

Now, there are some who say this bill does not go far enough. They contend it should shut down subsidies retroactively. Let me say, here is the problem with that.

Shutting the 9.5 percent subsidies down retroactively will not just affect the big kids on the block, those in the student loan business who do it for a profit. It will affect smaller, nonprofit student aid providers all across America, nonprofit organizations that were told years ago by the Federal Government that this practice is 100 percent legal and legitimate. And as we will see

as this debate goes on, we are talking about nonprofit student aid organizations from all over the country, whether it be the big student aid organization in California, where 85 percent of their effort is aimed at minority children, and Texas, Arizona, all across the country.

Over the past few days Congress has heard an earful from nonprofit student aid providers warning that retroactive cuts would hurt students and families that need help paying for college. We have heard from Chela in California and we have heard from a provider in South Texas. Half of their loans go to Hispanic students, all needy students.

We have heard from nonprofit providers in New Mexico, Rhode Island, Oklahoma. ``Cuts in these subsidies, especially retroactive cuts, would immediately cause a negative impact to Iowa students,'' warned a nonprofit organization in Iowa.

Now, we need to shut down the subsidies, but we need to make sure that we are not shutting down nonprofit student aid organizations in the process. And if we go any further than what we propose in this bill, I think we are going to hurt the very families and students that we are actually trying to help.

So I would urge my colleagues to support the measure on the floor today. It is the right thing to do for our taxpayers, teachers and American students.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I would remind my colleagues that we are less than 4 weeks from a Presidential election and an election for all of us who serve here in the House. We all know what happens when we get to the eve of election. We all find religion.

Now, the President called for the elimination of this 9.5 percent subsidy back in February. I have been working on this for a year. It was in the gentleman from California's (Mr. McKeon) and my bill that we introduced back in May, and my colleagues on the other side want to criticize us for not acting sooner. Yet, the substitute, or their own higher education reauthorization, never even addressed this very subject.

Now, I would say to my colleagues it takes two to tango, and they all know how things get done around here. We need to work together.

The criticism about this bill not going far enough, I think, is well understood by Members on both sides of the aisle. While, in fact, it may shut down some subsidies that go to for-profit lenders, the problem we have is those lenders in the nonprofit sector who use that money to aid students and needy students will be burned in the process, and I think we take a great risk in going down that path today.

That is why the bill that we have before us shuts these things down, these 9.5 percent loans, for the next year and allows us, in the reauthorization of the Higher Education Act, to make sure that when we shut these 9.5 percent loans down permanently, we do so in a way that we do not hurt the nonprofit community that helped many low-income and needy students around the country.

Mr. Speaker, I yield 2 minutes to the gentleman from Nevada (Mr. Porter).

Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from Georgia (Mr. Gingrey), a member of our committee.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, I never cease to be amazed at what happens during political silly season here in the Nation's Capital.

Here we are on the eve of an election and we are going to have a virtual unanimous vote on this bill. Even though my colleagues on the other side have criticized it so much, for a bill that sounds as bad as they have criticized it, I am wondering why they are going to vote for it.

But I want to say, Welcome. Welcome. They are taking credit for stumbling across this billion-dollar excess subsidies when we have been working on this for about a year to try to shut this down in a reasonable and responsible way. And while I know that people want to go all the way and shut it down and be really tough, what about those nonprofit student aid organizations around the country who have these loans, who use those excess profits to help low-income students and mostly minority students all over the country?

Let us stop the nonsense. Let us get on to do the people's work. By passage of this bill today, we will end this practice for the most part for the next year, use those savings to help expand the need for high quality teachers in title I schools in math, science and special ed, and help more students get a better chance at an education.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself 3 minutes.

Let me say at the outset, that the Members on this side of the aisle enthusiastically support this legislation brought to the floor by the chairman of the committee and the chairman of the subcommittee. We only ask, what has been holding it up? Why were you not here earlier? But you are here now and we will celebrate the fact that you are here now.

I must say that we were excited when the gentleman from Maryland (Mr. Van Hollen) and the gentleman from Michigan (Mr. Kildee) were able to get an amendment this past September onto the floor of the House so we could get this issue in front of the House, get it out into the daylight and let the Members work the will of the House, something that does not happen too often in this Chamber. The will is quite stifled most of the time.

But when this issue is put before the House by the gentleman from Maryland (Mr. Van Hollen) and the gentleman from Michigan (Mr. Kildee), and the House got a chance to look at it, Republicans and Democrats, conservatives from the North, East, South, West, around the country, 414 to 3, they said, get rid of this loophole. It is unjustified, it is unconscionable, it is expensive and it is killing the credibility of this program.

Tonight, we answer that call by the House of Representatives to get rid of this program. But tragically tonight we only answer a part of that call because we do not deal with those provisions in this program that continue these unconscionable profits at the 9.5 percent loans due to the recycling. We are going to stop this loophole for this year, and we ought to stop the recycling.

This is not retroactive. But when you do not stop the recycling, the good purposes for which our colleagues across the aisle are going to put this money to use, and that is to help those teachers, provide loan forgiveness for those teachers in difficult districts who are making the special efforts, some 10,000 additional teachers, who could have access to loan forgiveness, now will not have access to that loan forgiveness.

All it would require is to close the loophole. That is what the House voted on when they voted on the Kildee-Van Hollen amendment. They voted to close a loophole, not sort of close a loophole, not part way close a loophole, but close a loophole. Maybe only for 1 year now, and that is the best we can do under these circumstances, but the entire loophole.

The difference is billions of dollars. The difference is 10,000 teachers in need of loan forgiveness. That is the choice.

I heard this was held up because we had all this power. We would like to use our power now to tell you and persuade you to join with us and close the entire loophole and get those other 10,000 teachers that are eligible. Power to the people, to the Democrats, because apparently that is why you have not done it now for 2 years. So we want to join with you. We can have a manager's amendment tonight to close the loophole like 414 of our colleagues urge.

I want to thank the gentleman from Michigan (Mr. Kildee) and the gentleman from Maryland (Mr. Van Hollen) for their creativity and tenacity in getting this before the House of Representatives, getting it into the full Chamber where the Members on a bipartisan basis have overwhelmingly repudiated this program. I am sorry we cannot go the whole way.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 4 minutes to the gentleman from Michigan (Mr. Kildee), one of the sponsors of the original amendment to get this in front of the House.

Mr. Speaker, I yield 4 minutes to the gentleman from Maryland (Mr. Van Hollen), who again was the spark plug for getting this legislation before the full House and getting this bill to the floor.

Mr. Speaker, how much time do I have remaining?

Mr. Speaker, I yield 2 minutes to the gentlewoman from California (Ms. Woolsey).

Mr. Speaker, I yield 2 minutes to the gentleman from Illinois (Mr. Davis), a member of the committee

(Mr. DAVIS of Illinois asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 1 minute to the gentlewoman from Texas (Ms. Jackson-Lee).

Mr. Speaker, I yield 3 minutes to the gentleman from New Jersey (Mr. Holt).

Mr. Speaker, could you advise the time remaining?

Mr. Speaker, I yield myself the balance of my time.

Again, Mr. Speaker, we support this legislation. But it is interesting, you know, with the 10-year T-bill rate at 4 percent and the 2-year bill or the 3-year bill at about 1.5 to 2 percent, that a very select group of lenders can get 9.5 percent, the only place in the world you can get a return of 9.5 percent on your money, or the difference between the margin there. It is the only place in the world you can go to get this money, unless you are borrowing from the Mafia.

But what happens with this legislation is, while hiding behind a legitimate claim by nonprofits, they keep open the recycling loophole that is overwhelmingly used, according to the General Accountability Office, by for-profit lenders. Nothing to do with retroactivity, because we stop this practice in the future, and we can stop recycling in the future.

But they have chosen not to do it. They said, if the Democrats had cooperated, they would have done this earlier. Well, we are cooperating, so do it. It is earlier. Do it now. We have this newfound power bestowed upon us by the chairman of the committee. We want it now.

You said you did not do it because we did not cooperate. The more I think about it, it was a brilliant strategy because we did not have to take all that other stuff in your legislation, where these kids were going to lose their rights to low-interest loans and be able to lock in low-interest loans in repayments. We did not have to take all that, which would have punished millions of young people, and we are going to get this loophole closed, too.

Sounds like a brilliant piece of strategy. And here we are at the end of the session with the Republicans implementing, talk about bipartisanship, the Republicans are now implementing this Democratic strategy. It is a wonderful evening to be here at midnight to finally see where the Republicans are saying the Democrats made us do it.

Mr. Speaker, we enthusiastically support this bill. We hope that the Republicans next year will go the full steps to closing the loophole in its entirety.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I yield myself 4\1/2\ minutes.

Mr. Speaker, the Taxpayer-Teacher Protection Act is a straightforward plan to shut down excess subsidies for student loan providers and direct the savings to expanded student loan relief for teachers. There is a sense of urgency in the bill before us, and I agree that these reforms should be sent to the President for his signature as soon as possible. Yet I find it troubling that we are here today when these reforms could have been enacted months ago, if not for the partisan foot-dragging on the other side of the aisle.

The fact is, President Bush called on Congress to shut down these subsidies 8 months ago in his fiscal year 2005 budget request. Unfortunately, Democrats chose not to address the issue in any of their Higher Education Act reauthorization plans, and they refused to work with us to enact our legislation that would have shut down the 9.5 percent floor.

Let us be clear on this point. The reason we are here today is because those on the other side of the aisle did nothing to shut down these subsidies in their own legislation and they have stonewalled our efforts to cut off the subsidies as part of a larger reauthorization bill.

What is worse, our Democratic colleagues who have finally belatedly joined us in calling for an end to the excess subsidies are advocating for changes that would cut student loan benefits.

This runs counter to the very principle that is driving these reforms, that Federal student aid should be directed to student benefits.

The bill before us is the first step to permanently ending the 9.5 percent special allowance subsidy. Make no mistake, by approving this bill, the Congress will have taken the first step to ensuring a permanent end to the excess subsidy payments.

We have always maintained that the best solution is to provide a permanent legislative fix that will direct these resources to student benefits. We proposed that type of permanent solution earlier this year, and we will fight for its enactment next year. In the meantime, this bill is the right answer today.

Prospective changes like those in the bill before us will ensure the loophole is shut down without jeopardizing student benefits. The GAO recently recommended Congress put an end to the excess loan provider benefits with prospective changes. That is because the GAO recognizes that retroactive changes would harm students by reducing borrower benefits.

The recipients of the 9.5 percent special allowance subsidy are largely nonprofit State secondary markets. These organizations are required to use the proceeds of the 9.5 percent subsidy to provide student benefits.

Many of the nonprofit State organizations have told us that retroactive changes would force cuts to programs that forgive loans for nurses, reduce loan fees and interest rates for students, provide alternative loans for needy students and families, and help high school students and families plan for college and find financial aid. These are just a few of the student benefits that would be cut under the misguided Democratic plans to make retroactive changes.

We wish our Democratic friends had understood the importance of this issue sooner so that these reforms would already be enacted. In February, President Bush called on the Congress to shut down the excess subsidies. In May, the gentleman from Ohio (Chairman

Boehner) and I introduced a bill that would do just that. At the same time, Democratic leaders attacked that proposal and prevented us from enacting comprehensive reforms that would expand college access, all the while offering proposals of their own that ignored the excess subsidy payments. We are pleased that the Democrats have finally come around, but we wish they had realized the importance of this issue sooner.

Shutting down these excess subsidies is important, and so is the need for the expanded loan forgiveness this bill will provide. The Republican plan to permanently end the excess subsidies for student loan providers is hinged on the idea that these resources must be used for student benefits in the Federal student loan program. That is why the Taxpayer-Teacher Protection Act takes the savings generated by shutting down excess loan provider profits and targets them to student loan relief for teachers.

K-12 schools in high poverty areas, including rural and urban schools, are facing severe shortages of teachers in key subjects. The House has already approved a similar expansion of student loan relief. That bill, authorized by the gentleman from South Carolina (Mr. Wilson) received widespread support among Republicans and Democrats alike, and I expect similar support today.

President Bush has led efforts to expand loan forgiveness for teachers of math, science and special education who commit to teaching at least 5 years in disadvantaged schools. The current loan forgiveness of $5,000 will be more than tripled, to $17,500, under the bill, providing a valuable tool for disadvantaged schools seeking to place a highly qualified teacher in every classroom.

I hope we can all work together now to pass this bill and get it to the President for his signature.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5185) to temporarily extend the programs under the Higher Education Act of 1965, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 5185.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, each year millions of Americans, young and old, participate in higher education programs at this Nation's colleges and universities. Higher education has become more important than ever, with a changing marketplace and increasing international competition. That is why the Federal investment in the Higher Education Act is so important.

For 2 years, my colleagues and I have been working to strengthen and renew the Higher Education Act so that we can better serve the millions of low and middle income students aspiring for college education. We have made great progress, but, unfortunately, we were not able to complete our work.

Today I stand in support of the Higher Education Extension Act so we can ensure these vital programs continue to serve American students. Yet I regret we were not able to accomplish a full reauthorization.

In May, the gentleman from California (Mr. McKeon) and I introduced the College Access and Opportunity Act to complete the Higher Education Act reauthorization. That bill was the final piece of our comprehensive effort to expand the college access by focusing on fairness, accountability, affordability, and quality. That bill contained a number of reforms that I had hoped would be enacted by today.

The College Access and Opportunity Act would have realigned our student aid programs to place first priority back where it belongs, on the millions of low and middle income students who have not yet received a higher education.

The bill would have strengthened Pell grants, college access programs, and campus-based student aid. It would have broken down barriers and eliminated outdated regulations that are preventing nontraditional students from achieving their higher education goals. It would have significantly realigned the multibillion dollar student loan programs to extend access for current and future students, and restore fairness so that all student borrowers could be treated equally. Consumer protections for borrowers would have been strengthened, and red tape would have been reduced. And because accountability is the cornerstone of education reform, colleges and universities would have been held more accountable to the students, parents, and taxpayers they serve through increased sunshine and transparency.

Yet, none of these reforms will be enacted today because partisan politics got in the way of student-focused reforms. The bill before us is critically important. We cannot allow programs under the Higher Education Act to expire. Too many students depend on this assistance as they strive for a higher education. Yet, it is equally important that we remain committed to comprehensive reforms that will build upon these programs, strengthening them to expand college access.

Mr. Speaker, I strongly support the extension of the Higher Education Act. Millions of American students depend on these programs, and we must not let our commitment to higher education lapse. But it is equally important that we remain focused on the ultimate goal of enacting comprehensive reforms that will strengthen and renew the Higher Education Act so we can meet the needs of current and future students. I encourage my colleagues to support this bill and work with us in the coming year to complete a comprehensive reform package so that we can better serve American students pursuing the dream of a college education.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from California (Mr. McKeon), the chairman of the Subcommittee on 21st Century Competitiveness.

Mr. Speaker, I yield myself such time as I may consume.

Let me thank my colleague on the other side of the aisle. We have been locked in a really difficult situation trying to come to an agreement on the reauthorization of this bill. But it is not just here. I think we could have overcome our differences, but clearly there was no action in the other body, and we have no choice but to extend the Higher Education Act, which the underlying bill here today does.

This is important to millions of low- and middle-income American students who depend on Pell grants and student loans to achieve their dream of a college education. I ask my colleagues to support the bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I rise in support of H.R. 5186, the Taxpayer-Teacher Protection Act. In doing so, I'd like to thank Chairmen Boehner and McKeon for their leadership on this issue, supported by Majority Leader Tom DeLay.

H.R. 5186 moves efficiently and effectively to end unfair subsidies for lenders in the student loan program and redirects those funds to assist the teachers of this country. What could be better? While it took some time for my colleagues on the other side of the aisle to agree with us on the need to stop the excess subsidies for student loan providers, I'm confident that today, we all recognize the importance of the measure before us. I'm also certain they agree with us on the need to assist teachers, given their past votes of overwhelming support on similar teacher loan forgiveness bills.

This bill is straightforward and increases the amount of loan forgiveness for secondary math and science teachers and for K-12 special education teachers to a maximum of $17,500 from the $5,000 currently provided in the Higher Education Act for all teachers in high-poverty schools.

This bill is similar to legislation I introduced, H.R. 438, which passed the House with strong bipartisan support by a margin of 417-7 on July 9, 2003.

The purpose of the bill is to ensure our future workforce is scientifically literate and competent, skills that the Committee for Economic Development and the American Society of Mechanical Engineers have identified as keys to our country's ability to compete in the global marketplace. Unfortunately, our high school students consistently test toward the bottom in math and science compared to the rest of the world.

Teachers working in schools that face the greatest difficulty in recruiting math, science and special-ed teachers will be eligible for the increased amount of loan forgiveness after teaching for five years. This commitment to these schools and the students they serve is well worth the recognition and support of this Congress. To further assist children in low-income schools, eligible teachers must be highly qualified as required by the No Child Left Behind Act.

I look forward to the day when a group of math, science and special- ed teachers begins teaching in our Nation's neediest schools inspired by the incentives of this bill. Those teachers will clearly know they are part of a national program designed to ensure all American children are equipped with the life skills necessary to contribute and succeed in a technologically driven world economy.

The goal with this bill, and the bill I was proud to sponsor earlier in this session, is to ensure our Nation remains a competitive force in the world. I hope a secondary effect will be to send a strong signal that America honors and respects those who accept the calling to teach. I am proud that my wife Roxanne has been a teacher in Lexington County encouraging young people to reach their highest fulfillment. This bill provides a common sense solution that shuts down excess profits for loan providers, and directs the resources to one of our Nation's most valuable resources--teachers, professional educators who make a difference in children's lives.

I urge my colleagues to support passage of H.R. 5186.

May God bless our troops, and we will never forget September 11th.

Mr. Speaker, I want to thank you for all of your efforts in bringing forward this very important piece of legislation. It will serve to provide a much-needed benefit to highly qualified teachers teaching in title I schools. The benefits provided in this legislation will increase loan forgiveness for those teachers in the high shortage subject areas of math, science and special education. In addition to the important role that special education teachers play in the lives of students with disabilities, I would also like to recognize the importance of the many related service providers that help children with disabilities every day. Speech-language pathologists and audiologists provide the single largest component of related services under IDEA and are key to providing a quality education to children with disabilities. A number of independent studies conducted by the U.S. Department of Education and other organizations have concluded that we must do more to attract people into these professions, or we will be faced with a chronic shortage of such personnel in our schools within the next decade. I am pleased with the efforts we are making today to address these shortages, and I look forward to working with you in the future to do even more.