Third Higher Education Extension Act of 2006

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 6138) to temporarily extend the programs under the Higher Education Act of 1965, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 6138.

Mr. Speaker, I yield myself such time as I may consume, and I rise in support of H.R. 6138, the Third Higher Education Extension Act of 2006.

Some of the most important programs in the Higher Education Act, such as Pell Grants and Perkins student loans, are set to expire on September 30, 2006. Pell Grants and Perkins loans are the passports out of poverty for millions of worthy young people, and they deserve to be reauthorized. H.R. 6138 ensures that these provisions will not expire at the end of this fiscal year by extending them for another 9 months, through June 30, 2007.

While the House acted on permanent reauthorization of the Higher Education Act by passing H.R. 609, the College Access and Opportunity Act, in March of this year, the Senate has not yet acted. The Senate should soon act to pass their reauthorization bill so we can negotiate a final bill and have these important higher education reforms signed into law. In the meantime, Mr. Speaker, this extension will allow the important programs of the Higher Education Act to continue past their current September 30, 2006, expiration date.

In addition to extending the programs under the Higher Education Act, H.R. 6138 includes additional provisions to benefit students and institutions. Specifically, it reduces red tape for Hispanic-serving institutions by eliminating the 2-year wait-out period between grant applications. The extension repeals an outdated and burdensome requirement that Hispanic-serving institutions document the percentage of low-income students enrolled at the institution.

H.R. 6138 also eliminates the ability of schools to circumvent the new school-as-lender restrictions by forming an eligible lender-trustee relationship. And, finally, it provides loan forgiveness to spouses and parents of those who died or became disabled in the terrorist attacks of September 11, 2001.

Mr. Speaker, I urge my colleagues to vote ``yes'' on H.R. 6138 because we must not break our commitment to America's students.

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 full Education and Workforce Committee and author of the higher education reauthorization bill.

Mr. Speaker, I will continue to reserve the balance of my time.

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

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

Mr. Speaker, let me address a couple of things. First let me address some of the comments by the gentlewoman from Florida, my friend and colleague, Ms. Wasserman Schultz. I appreciate the fact that she is going to vote for the ultimate bill here. Just to address some of the School as Lender issues.

All schools in the School as Lender program may continue to operate as they have been. All schools that have an Eligible Lender Trustee agreement in place may continue to operate, but they must comply with the School as Lender program requirements. It is only fair that schools that make loans to their students under the Federal student loan programs comply with the same rules, whether they provide the loans directly or through a trustee.

No student's loan is in jeopardy, every eligible student will get a loan, and it will now be a low-cost loan because of the fierce competition in the student loan market. In fact, because all schools must use the funds earned on these loans for need-based grants, students are the big winners under these rules. Indeed, Senator Ted Kennedy has written a letter to Secretary Spellings on August 1 demanding that this loophole under the School as Lender provision for those Eligible Lender Trustee agreements be eliminated.

Shame on those schools who don't want to use these funds for need- based grants for their students, but instead on their inflated administrative budgets.

Finally, let me just comment on the work that we have done on Pell Grants. Since I was elected in 2000, I can tell you, I am pretty proud of the record of this Congress, Republicans and Democrats, in terms of increasing Pell Grant funding.

Since 2000, we have increased Pell Grants by 71 percent, from $7.6 billion a year to $13 billion a year. The maximum award since 2000 has gone up from $3,300 per student to $4,050 per student. Since 2000, we have had an increase in enrollment of 36 percent, from 3.9 million students to 5.3 million students. And under the underlying Higher Education Act, we have even strengthened the Pell Grant program further. We have provided for year-round Pell Grants for the first time. We increased the authorization level to $6,000, the highest amount in history. We have also had Pell-Plus initiatives, to say if you are a high achieving low-income student, you will get an extra $1,000 your first 2 years; and in your third and fourth year, if you are a high achieving student who is Pell-eligible and you have a 3.0 GPA and you agree to major in math, science or foreign languages, you will get an additional $4,000 per year. So we have the strongest, most vibrant Pell Grant program in history. It is one that we can all be proud of.

I urge all of my colleagues to vote for this extension because truly Pell Grants and Perkins loans are the passport out of poverty for young people.

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

I thank the gentleman for yielding.

Mr. Speaker, I rise in strong support of H.R. 6138, a measure to extend the programs under the Higher Education Act that are set to expire at the end of this month.

I thank the chairman of the 21st Century Competitiveness Subcommittee, Mr. Keller, for his work on this bill as well as his consistent efforts on behalf of our Nation's college students and their families. I also thank Ranking Member Kildee for his help on this effort of getting this bill reauthorized.

Earlier this year, when the Deficit Reduction Act was signed into law, we authorized the Act's mandatory spending programs. In this process, we reduced lender subsidies, increased loan limits for students, simplified the financial aid process, and provided additional resources for needy students studying math, science, and critical foreign languages in college. And we managed to achieve all that while making certain that student aid programs operate more efficiently, saving U.S. taxpayers billions of dollars.

The House followed in March by passing the College Access and Opportunity Act. This bill would reauthorize the remaining program under the Act. Unfortunately, the Senate has not yet acted on reauthorization legislation of its own. Therefore, the measure before us simply extends these remaining Higher Education Act programs until June 30, 2007, which will give us time to finish up the bill in the next Congress.

Additionally, H.R. 6138 includes benefits for college students and institutions of higher education. For example, this legislation reduces red tape for Hispanic-serving institutions by eliminating the 2-year wait-out period between grant applications. It repeals an outdated and burdensome requirement that Hispanic-serving institutions document the percentage of low-income students enrolled at the institution.

It continues current law with respect to payments made to Guaranty Agencies so that those agencies can continue working to help students avoid defaulting on their loans.

It eliminates the ability of schools to circumvent the Deficit Reduction Act's new school-as-lender restrictions by forming an eligible lender-trustee relationship.

And it provides loan forgiveness to spouses and parents of those who died or became disabled in the September 11, 2001, attacks on our Nation.

These student benefits, coupled with H.R. 6138's extension of vital higher education programs, are worthy of our strong, bipartisan support. At the same time, I am hopeful that our friends on the other side of the Capitol will renew their commitment to a reauthorization of the Higher Education Act. These extensions, and we are now on the fifth in this Congress alone, ought to become a thing of the past.

Mr. Speaker, yesterday, Secretary of Education Spellings outlined her vision for the future of higher education, following the release of a report from the Commission she formed a year ago to recommend ways to ensure our colleges and universities meet the challenges of the 21st century. As we extend these programs today, we should also commit ourselves to review the recommendations of the Commission and work with Secretary Spellings to expand college access and strengthen the quality of higher education in this country.

As I noted, in March, the House passed a reauthorization that I believe would go a long way toward doing that, even before the report was issued. Our bill would strengthen the Pell Grant program, empower parents and students through sunshine and transparency in college costs and accreditation, improve college access programs, and much more. Now, with the new report in the mix, we have a chance to do so again in the next Congress, potentially with important improvements incorporated between now and then.

I look forward to working with my colleagues on both sides of the aisle and on both sides of the Capitol in completing our work early on in the 110th Congress. In the meantime, however, I urge my colleagues to join me in supporting this extension.

Mr. Speaker, I am concerned by the inclusion of provisions in this bill related to eligible trustee relationships with eligible institutions and the negative implications that these provisions will have on the availability of low-cost Federal loans and need-based grants in Pennsylvania and across the Nation.

I am also concerned that this legislation was not discussed with the affected institutions and is being brought to the floor for a vote less than a week after it was introduced.

Nearly 150 institutions of higher education participate as Federal Family Education Loan--FFEL--program lenders to their graduate and professional students, including many of the leading medical and law schools in the country. The financial benefits offered to students who borrow through their institution are better than what was available to students at the institution prior to the school becoming a lender. These institutions are required to pay the loan origination fees or reduce the interest rates that their borrowers are charged, and many institutions choose to do both.

Over the past 8 years, Widener University in my district has been able to provide nearly $8 million more in grant aid to needy students as a result of its activity as a school lender. Over 90 percent of the students at Widener require financial aid to pursue their studies. In addition, Widener also provided loans at lower costs than Sallie Mae and the big banks and has charged no up-front fees to students borrowing their loans from the university.

The provisions in H.R. 6138 would not allow school lenders to make Graduate PLUS loans to their students after December 31, 2006. The Graduate PLUS loan program has only been available since July 1, 2006, and was designed to replace graduate students' need to borrow higher- cost private loans to cover their remaining need. A number of institutions have sought to meet their borrowers' financing needs though eligible lender trustee arrangements under which a bank originates and holds loans on behalf of a trust established by the institution. The proceeds from the sale and repayment of these loans are used to help students. By continuing to deny school lenders the ability to make Graduate PLUS loans directly and stopping them from making them under trustee arrangements, the bill shifts millions of dollars from funds to help needy students to the profits of the big corporate lenders.

The inability to make Graduate PLUS will result in a loss of over $50 million need based grant aid for students at the 14 school lenders in Pennsylvania. In addition to Widener University in my district, the University of Pennsylvania, University of Scranton, Drexel, Duquesne, Carnegie Mellon, Temple, University of Pittsburgh, and seven other medical and professional schools in Pennsylvania also participate as school lenders.

In addition, the provisions also impact existing structures that have been in place for many years. A 2005 U.S. Government Accountability Office--GAO--study found a wide diversity in how these institutions finance, administer, and structure their FFEL lending programs. For example, some have used affiliated foundations as the lender because of State laws prohibiting institutions from incurring debt directly or because they have chosen to issue taxable bonds to finance their loans. Some of these arrangements involve eligible lender trustee relationships as well as affiliate organizations. The bill would not allow institutions to use or modify these types of structures after date of enactment.

Mr. Speaker, I yield myself such time as I may consume, and I rise today in support of the Higher Education Extension Act.

First, I would like to recognize that there are items in here that we all agree are important and that will help students, including changes to the Hispanic-serving institutions program and

loan forgiveness for 9/11 survivors and their families. These changes will ensure that Hispanic-serving institutions can continue to serve their important role in educating minority students and that families who fell victim to the terrible attacks of September 11 will have welcome financial relief.

Unfortunately, however, this extension is a reminder that we have failed to reauthorize the Higher Education Act, and H.R. 609, passed earlier this year, was only another missed opportunity to help students and families. H.R. 609 failed to restore the $12 billion raid on student aid that was included in the Budget Reconciliation Act.

These cuts come at a time when college costs are on the rise. At 4- year public colleges and universities, tuition has skyrocketed by 40 percent between 2001 and 2005. Additionally, this is really the first time that we have asked an entire generation to go deeply into debt in order to get a higher education. The typical student leaves college today with $17,500 in Federal loan debt.

Democrats would also boost the Pell Grant scholarships for students most in need. The value of Pell Grant scholarships are now worth nearly $1,000 less in inflation-adjusted terms than they were 30 years ago. My friends on the other side of the aisle may say that they have increased Pell Grants, but the only reason there is more appropriated for Pell Grants is because there are more and more students that qualify for those grants.

The only way to ensure that students receive meaningful aid through the Pell Grant program is to restore the purchasing power of the Pell Grant and significantly increase the maximum award.

Mr. Speaker, oftentimes I believe we have lost sight of what the Federal role is for higher education. It is to provide access to any and all qualified students to ensure they can get into higher education if they want to. I urge that we work together to provide real relief to students and families and reverse the raid on student aid.

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

Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. Bishop).

Mr. Speaker, I yield 3 minutes to the gentlewoman from New York (Mrs. McCarthy).

Mr. Speaker, I yield 5 minutes to the gentlewoman from Florida (Ms. Wasserman Schultz).

Mr. Speaker, I have no further requests for time, and I yield back the balance of my time. I thank Mr. Keller for his fine work working with us on this extension and look forward to continuing to work with him.

Mr. Speaker, while I intend to cast my vote in support of the Higher Education Act extension, I am extremely concerned about the unintended consequences on students at Nova Southeastern University in my congressional district and many other degree-seeking students that rely on financial assistance.

Nova Southeastern University is the largest independent institution of higher learning in Florida, offering the benefits of education to 25,000 students. Nova Southeastern's student body is unique. Eighty percent are evening and part-time graduate degree-seeking students who participate in the workforce while they are seeking their degree.

Nova ranks first in the Nation in awarding postgraduate degrees to Hispanic students and is among the leaders in awarding advanced degrees to African American students and disadvantaged students who depend on financial assistance to further their education.

Until earlier this year, Nova was also one of the Nation's leading participants in the School as Lenders program. This program allowed Nova to provide hundreds of millions of dollars in low-cost loans to students. Premiums from the sale of these loans provided the university with millions of dollars annually which it used to educate its students. School officials estimate that this year's premiums issued through an Eligible Lender Trustee may be worth as much as $10 million for the school.

But this is not just about one institution in south Florida. The version of H.R. 6138 that the House will vote on and ultimately pass today threatens to eliminate the ability of every school issuing loans through an Eligible Lender Trustee to control these premiums. Ultimately, the students seeking to improve their lives through higher education will bear the brunt of this change.

H.R. 6138 also eliminates the ability of school lenders and Eligible Lender Trustees to issue low-cost PLUS loans to graduate students. The expensive cost of graduate and professional school programs often requires students to withdraw multiple loans. Eliminating an important source of these loans will drive graduate students to seek more expensive loans, with greater fees and risks to the students.

While the overall goals of this legislation are noble and I support the programs that benefit so many, I encourage Members to carefully review the legislation because some of the provisions will hurt students more than help them and in some cases destroy a young person's dream of a higher education and a better future.

I understand and support this legislation but believe that not every aspect of it includes the rosy picture that has been painted here today.