Madam Speaker, I yield myself such time as I may consume. Madam Speaker, this is a well-intentioned bill that I wish we had the chance to make better. Nonetheless, without the opportunity for…
Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, this is a well-intentioned bill that I wish we had the chance to make better. Nonetheless, without the opportunity for amendments, I hope we can use these next 3 hours to analyze what H.R. 5 does and what it doesn't do.
Normally this is a task best reserved for regular order when you go through the committee process and have a chance to have hearings and have a chance to hear experts on the subject. We are forgoing that today because we are in this 100 hours of nondemocratic rule, and that is a result of the election. You won the majority, you use that majority the way you see fit; but I think that is unfortunate for America today.
Since we have bypassed that process, I would like to spend some time doing so right here today. First, let me underscore once again the fact that this bill has never been considered in committee. It includes some changes impacting the student loan industry that have never been tried before and, worse yet, they have never even been discussed in any meaningful way. Is that bad policy? Well, maybe so. But is it irresponsible policy-making? Most definitely it is.
Next, I caution my colleagues not to characterize what is before us today as a student aid bill. Ironically, the College Student Relief Act wouldn't impact a single college student. The way the loan program works, a student that wishes to borrow, and it is unfortunate, I think, that we are even having to have that kind of discussion today; I wish we were focusing on trying to keep the cost of education down so students didn't need to borrow a penny, but that is not going to be the debate.
The way it works, a student borrows the first year, the second year, the third and fourth years if they so desire; and then after they graduate from school and have a 6-month respite period, they begin to repay that loan. So this bill today addresses an interest rate that a college graduate will pay back in the repayment period 6 months after they graduate from school when they are definitely no longer students.
I also caution my colleagues not to buy into the talking point that H.R. 5 would save a typical borrower about $4,400 over the life of their loan because it just simply isn't true.
Now what the Democrats talked about during the campaign of reducing all student debt by half may have met these requirements, but not what is actually on the floor here today. The fact is that a borrower cannot save nearly this much because under H.R. 5, the bill we are discussing here today, the interest rate phases down from the current 6.8 percent to 3.4 percent over a series of 5 years. The borrower, for them to receive the complete $4,400 in savings, the 3.4 percent interest rate must remain in effect the whole time and it only is actually in effect the last 6 months, and they must consolidate their debt at that time and stretch the repayment out over the whole 15 years.
However, Democratic leaders have crafted the legislation to ensure that the 3.4 percent rate stays in effect only from July 1, 2011, through January 1, 2012, 6 months. On January 2, 2012, the interest rate returns back to the current 6.8 percent making the $4,400 in savings impossible to achieve.
In reality, a college freshman in the fall of 2011, when the rate is at 3.4 percent, would end up saving $6.42 a month. That's right, $6.42 once he or she begins repaying their student loan.
More broadly, H.R. 5 falls woefully short in dealing with what I consider the twin priorities for addressing the college cost crisis. That is, expanding access, which should be the Federal role in higher education, and enhancing affordability. Those are two very important items.
First, on access, as I said, by definition this legislation cannot expand college access because at its core it is not a student aid bill. Would it reduce payments for a limited number of college graduates who would see their interest rate gradually drop over the next 5 years? Yes.
Would it bring a low- or middle-income student any closer to the dream of attending college? Unfortunately not.
Compare this to the record $90 billion we are investing this year, $90 billion Federal investment this year, in student aid programs. That is an amount that has tripled over the last decade.
We have heard today in part of the rule debate about how over the last 12 years we have done nothing. We have tripled the amount of funding available for those who are going to higher education, under the Republican majority in Congress, I might add, and it is difficult to understand why our friends on the other side of the aisle act as if they have a monopoly on the college access debate.
On impacting college affordability, Madam Speaker, once again, this legislation falls short, and I truly did not believe this would have to be the case.
Consider this: On a 4-year public college education the tuition has risen 35 percent over the past 5 years. However, during the past decade, Federal aid for students has increased 300 percent.
Now, I ask my colleagues, if funding alone was the solution to the college cost crisis, wouldn't we have realized it by now? Of course we would have. And that is why institutional accountability is so important. It is at the very heart of the college cost crisis.
Yesterday, I introduced legislation, the College Affordability and Transparency Act, to help parents and students hold institutions more accountable for their role in the college cost crisis. I also submitted it, or tried to submit it, as an amendment to the Rules Committee, because I believed it was a vehicle through which we could have drastically improved the underlying legislation. Unfortunately, however, the closed process has placed the issue of affordability on the back burner, and these proactive commonsense reforms will have to wait for another day.
That is right, giving parents and students more information, in an easy-to-use format, about college costs and outcomes? That will have to wait for another day.
Establishing a system of simply and unmistakably comparing the cost increases of one institution against another? That will have to wait for another day.
And asking colleges that increase their costs the most and most often to identify ways to bring tuition under control on behalf of parents and students? Well, that too will have to wait for another day.
What is most disappointing is that many of these same reforms were passed by the House last year and Members on both sides of the aisle have backed exactly this type of approach. But to see them move forward from here, we will just have to wait for another day.
In countless ways, Madam Speaker, we can do better than H.R. 5. I just wish we had that opportunity. Because although the bill before us, as well-intentioned as it is, is just not what it seems. It is not a student aid bill, it doesn't expand student access, and it doesn't enhance affordability of a college education.
In the weeks and months to come, I hope we can work in a bipartisan way toward all of these things, and I look forward to working with Chairman Miller, Chairman Kildee, and Members on the other side of the aisle to ensure that this happens.
Madam Speaker, I reserve the balance of my time.
Madam Speaker, at this time I yield such time as he may consume to the gentleman from Florida (Mr. Keller), the ranking member on the Higher Education Subcommittee.
Madam Speaker, I yield myself such time as I may consume just to correct the record a little bit.
Last year, when we did the reauthorization of the Higher Education Act, we dealt with over 100 amendments, both Democrat and Republican, through the committee process that we have forgone today. And when we did take that money last year in the Deficit Reduction Act, we put over $9 billion back into students.
What we did with that money for students, and these are students in school, we took the 4 percent loan fees that were being charged to many students and cut all loan fees to 1 percent. For the average borrower, that is, for students in school, it gave them a savings of $525.
One of the problems we find is that students in their first and second years tend to drop out of school because they do not have enough money. So we gave them more of a chance to have their loans up front, and we increased those loan limits by $1,000 per year, from $3,500 to $4,500 for first- and second-year students.
And we did some other things: High-achieving, low-income students in the first and second years are able to obtain additional grant aid. High-achieving, low-income students that major in math, science or certain foreign languages are eligible to obtain an additional $4,000 in grant aid for their third and fourth years of college, and on and on. We put $9 billion of that back directly into student and student aid.
Madam Speaker, I now yield to another ranking member of the committee, the gentleman from Delaware (Mr. Castle), such time as he may consume.
Madam Speaker, I yield myself such time as I may consume.
I appreciate my good friend from New Jersey talking about promises. My opponent during the campaign, and I don't know if this was the full Democratic Party, but what he said was they were going to cut student loan rates immediately in half. I know as we got here in Washington and they assumed the majority, we were told that that would cost about $60 billion. So they had to cut back that promise to what they have done now is a phased in approach that cuts the student loan interest rate ultimately at the end of 5 years to 3.4 percent for subsidized loans, which is considerably smaller than their original promise. I just wanted to correct the record with that.
I am happy now to yield 4 minutes to the gentleman from Pennsylvania (Mr. Platts), a member of the committee.
Madam Speaker, I am happy to yield at this time 3 minutes to the gentlelady from North Carolina (Ms. Foxx), a member of the committee.
Madam Speaker, I yield myself such time as I may consume.
What I would ask of people that are following this debate, if they would take the numbers and then realize that what the bill does, it takes the loan rate, which is 6.8 percent, and reduces it to 6.1 the first year, and then incrementally drops it, and then the last 6 months, this is a 5-year bill, the last 6 months it goes to 3.4 percent.
If you will take those numbers and figure out how much to borrow each year to get to the 14,000 and then pay it off over the 15 years, if they consolidate the loan, pay it off over the whole 15 years, there is no $4,400 of savings. It is more in the neighborhood of a little over $2,000.
Madam Speaker, I would be happy to yield to a new Member of Congress, Mr. Smith from Nebraska, 2 minutes.
If I might inquire of the Speaker, what time is left on each side?
Madam Speaker, at this time I am happy to yield to my good friend from Utah, a member who is returning to the committee, Mr. Bishop, 4 minutes.
Madam Speaker, I am happy to yield 4 minutes to the gentleman from Georgia (Mr. Gingrey).
Mr. Madam Speaker, I am happy to yield such time as he may consume to the gentleman from Florida (Mr. Keller), the ranking member of the subcommittee dealing with higher education, the Pell Grant expert.
Madam Speaker, I yield myself such time as I may consume.
I really want those who are watching this debate to understand how much I
understand the importance of a higher education, how important it is and how necessary for someone to really achieve the American Dream; they need to get as much education as they can.
What we are looking at with this bill, though, really what it does is, if you look at it from July 1, 2007, to July 1, 2008, it cuts the fixed rate of student interest loans from to 6.8 to 6.1. A year later, it cuts it to 5.44; a year later to 4.76; a year later to 4.08. And then ultimately, 5 years from now, January 1, 2011, it cuts for 6 months the rate to 3.4, which is what they are saying is, it cuts the interest rate in half. Well, it does for 6 months of the 5 years that this bill covers.
I think what we need to really look at is the College Advisory Committee on Student Financial Assistance has done a study, and they show that 48 percent of low-income students cannot even get into college, into a 4-year institution. Twenty-two percent cannot even get into a community college because they cannot afford the upfront money.
What I am saying is what we should be looking at, even though we are putting in $90 billion this year, three times more than just 10 years ago, it is still not enough to provide all of the things we would like to do for all of the students that need the opportunity to go to college.
So, if you have to look at just what resources you do have, what we are saying is, why do we not put those resources to those students that are trying to get into college, rather than give a bonus to those that are graduating and are now going to repay a loan; and that is what this bill does.
Those who have been fortunate enough to graduate are going to receive about $1 million more income in their lifetime than those who do not get to go to college. We are saying in the time of limited resources, why do we not try to help those who are trying to get on that economic ladder to realize the American Dream rather than give a bonus to those who have graduated.
Even if you listen to the full debate, we are not even telling them the full facts. We are saying we are cutting your interest in half. For 6 months, we are cutting it in half. The other time, it is a phased-in cut over 5 years, and then it goes back up to the rate of 6.8 percent.
When I was chairman of the subcommittee when we did the last reauthorization in 1998, we came up with an interest rate that was the lowest in the history of the student loan business, and we did that in a bipartisan way, and it was good for students.
Now interest rates have changed, and in a bipartisan way last year, we set the rate at 6.8 percent, which is what it is now, which is a pretty good interest rate. Would I like it to be lower? You bet.
But I really think that we need to focus on helping those students, especially the lower- and middle-class that are just trying to get into school, that it will be 5 years. First they have to get into school, have enough money to pay their tuition and fees and make it through the 5 years to graduate, and then they start reaping some of the benefits of this as they repay their student loans.
Madam Speaker, I reserve the balance of my time.
Madam Speaker, I am happy to yield 3 minutes to my friend from Georgia (Mr. Price).
At this time I am happy to yield 1\1/2\ minutes to my good friend from South Carolina (Mr. Wilson).
Madam Speaker, I am happy to yield 2 minutes to our friend from California (Mr. Campbell).
Madam Speaker, I yield 3 minutes to the gentleman from Iowa (Mr. Latham).
Madam Speaker, I yield myself such time as I may consume to respond to some of the comments of my good friend, Chairman Miller.
He mentioned that Republicans keep coming to the floor and saying this won't help students. Let me get away from Republicans and just read a few comments of people from the press.
The first is in the Chronicle of Higher Education. The quote is: ``The question is, What are you achieving by cutting the interest rate? asked Jamie P. Merisotis, President of the Institute for Higher Education Policy, a Washington-based research group.'' Not Republican. He stated, ``You are not encouraging any more students to go to college because you are cutting the interest rate on loans that students have already taken out.''
Another one, Sandy Baum, a senior policy analyst at the College Board and an economics professor at Skidmore College, said the interest-rate proposals ``costs a ton of money and is not a well-targeted policy.'' That was in Chronicle of Higher Education.
In Congress Daily: ``The much-touted Democratic measure to slash in half student loan interest rates over 5 years has been drafted to offer only temporary relief with the lowest rate of 3.4 percent effective for only the last 6 months of 2011.''
Now since we didn't have the opportunity to debate this bill in committee or explore it to any great extent, I can only guess that the bill was crafted so that the 3.4 percent interest rate is only in effect for half of that last academic year because the Democrats know the interest rate cut is unsustainable in that it would cost $22 billion if it ran for 10 years.
Another thing that was mentioned is that this will cut all student loans by half. I am hopeful that those students that are now in college that will benefit from this at some point out in the future when they become graduates will check to see if they are in a subsidized loan because they are the ones that will be covered. They should also check when they graduate to see what interest rate they will pay because again this just takes effect year by year. It doesn't reach the ultimate half until 5\1/2\ years from now. And also, those who are not on subsidized loans, don't get too excited about this because your loan interest will not be cut.
Another thing that the chairman mentioned was that there was an article, a Wall Street analyst referring to this felt that it was okay, that this wouldn't hurt and you could still buy mutual funds and everybody would get along just fine. I read the same article, and I think he was referring to Sallie Mae, the giant, the largest lender, and he said he felt they would be okay, especially based on the promise that the hit was going to be for $60 billion, and when the bill was finally written last Friday it was $6 billion. He was comparing what they will have to live with versus what the original promise was of the $60 billion cut which would have cut all student loans in half instead of reducing year by year a little amount until we get to only the subsidized loans and only for 6 months that they enjoy that cut before it goes back up to the 6.8 percent.
Madam Speaker, I reserve the balance of my time.
Madam Speaker, I yield myself such time as I may consume just to respond a little to the gentleman.
He talked about the $12 billion in cuts. Yes, we cut $12 billion out of the lenders, and we put $9 billion of it back into students. Not graduates, students.
Madam Speaker, I reserve the balance of my time.
For deficit reduction.
Deficit reduction.
Madam Speaker, since the Republican majority's record on student aid has been one of the things we have focused on today, as well as the Democratic leadership's rhetoric over the past few years, I believe it might be useful to take a few minutes to be perfectly clear about where Members on this side of the aisle stand when it comes to expanding college access.
Now, I was really interested in the gentlewoman from Nevada's discussion about her family, because that is the beautiful thing about this country, that you do have the opportunity to go to college. My dad, during the Depression, didn't have the opportunity and my mother didn't have the opportunity. I was the only one of five sons that was able to graduate from college. It took me 30 years. I graduated with my oldest daughter.
We have six children. Four of them have graduated from college and two are still working on it. We have 28 grandchildren. So I have a big interest in the opportunities of education, and I am hopeful that all of my grandchildren will be able to get an education.
Before Republicans gained control of the House in 1995, there had been no serious congressional effort to address the issue of rising college costs or even discuss it. We have seen the charts. We have seen how from the time Pell Grants were instituted, all the time that the Democrats were in charge, they got the Pell Grants up to $2,000. In the 12 years that we had the majority, we more than doubled that and put much more money into Pell Grant relief and to other student aid projects.
Similarly, there has been very little discussion on whether our colleges or universities were producing graduates who were ready for the job market. In fact, the entire American competitiveness discussion we are having these days was not on the minds of those inside the Beltway at that time. But over the course of the past decade, we have made it a priority, often working in a bipartisan fashion. We gathered facts, talked within the higher education community, and worked to craft legislation that represented a fresh approach to policy.
In fact, as I said earlier, we have been talking about student loan interests. And when we did the reauthorization in 1998, in a bipartisan way, we came up with the lowest interest rate in history, which has afforded many, many more students the opportunity to go to school. But what we came up with was something that was not necessarily revolutionary, but at the same time, it was vitally important.
It was a two-pronged approach. First, we made an unprecedented commitment to student aid, and today our efforts are paying off. Some $90 billion in Federal resources currently fund student aid programs, from loans and grants to work-study programs and education tax benefits. That is nearly triple what it was just a decade ago. And within that $90 billion is a record $13 billion for Pell Grants, a two- thirds increase over the past decade. That is a record we should be proud of.
On top of that, we have also eliminated a troubling shortfall in the Pell
program, placing it on a sound financial foundation for years to come. Beyond that, just last year alone we enacted legislation to increase loan limits to give students access to more financial aid; reduce loan fees so students can keep more of what they borrow, and this is students I am talking about, money they can put in their pockets; established $4.5 billion in new grant aid for low-income students studying math, science, and critical foreign languages, as well as high-achieving Pell eligible high school students; and we permanently expanded loan relief for highly qualified math, science, and special education teachers who commit to teaching in high-need K-12 schools for 5 years. These are things that really help us in K-12 and in higher education.
To pay for these new student loan benefits, which again included $4.5 billion in new grant aid for our Pell students, we reduced the subsidies paid to student loan lenders by more than $20 billion, as the chairman previously stated. We need to be thoughtful about increased cuts to the private sector so that we don't leave students with the poorly run direct loan program as their only option.
In short, Madam Speaker, our commitment to student aid has never been stronger. Anyone who says otherwise simply is not being candid.
The second and equally important part of our two-pronged approach to expand college access gets to the heart of the college cost crisis itself, the actual cost of a college education. This is what we really should be talking a lot more about instead of trying to get a little, small reduction in the interest rate. We should be trying to cut the total cost.
In short, we are aiming to bring greater accountability to an unchecked system so that consumers of a higher education have more information than ever before about the cost of a college education. As a result, we have dramatically shifted the college cost debate. A decade ago, the interest of students and colleges were seen as identical, and the conventional wisdom was that colleges knew what was best for students. A decade ago, the higher education establishment made clear that simply adding more Federal student aid was the solution to the problem of rising costs and that there was no point in questioning why costs rose.
Today, while we maintain an unprecedented commitment to student aid, we have also identified students, parents, taxpayers, community organizations, and employers as legitimate stakeholders in the outcomes produced by our higher education system. We are asking hard questions of colleges, such as why costs are so high, how successful the college is in helping students graduate on time, which helps keep costs down, and whether the college will give them the skills needed to compete successfully in the workplace.
Admittedly, we have gotten some blow-back. Some of these colleges don't want to answer these questions. They want us to just leave them alone, send more money. But you know what? We were and are right to demand such accountability, and we will continue to do so.
I wish we were able, as part of this debate, but the closed process under which we are operating won't allow that possibility. Still, I look forward to working with my colleagues on both sides of the aisle as we do so in the weeks and months to come.
Madam Speaker, I reserve the balance of my time.
Madam Speaker, may I inquire as to the time that we have remaining.
Madam Speaker, I yield myself such time as I may consume.
I agree with much of what the majority leader just said. I think we do have to expand access. We have to give opportunities to students.
My real concern is at the end of this debate, I am hoping that students understand that the 6.8 percent interest right now, tomorrow, doesn't go to 3.4; even if the Senate were to act on this and pass this bill exactly, that it would be almost 5 years, and then it only is cut in half for a 6-month period. So that if you look at how much they really would save over the period of a repayment, the way it works is when they graduate, 6 months later, they have to, or they have the opportunity to consolidate their loans and they can take all the loans because they get one their first year, one the second year, third year, and if they go through in 4 years they probably up end up with four loans. They consolidate those loans and they will take the interest rates, well, anyway, they are 6.8 now, and then they go to 6.1 and then they work their way down to 3.4. They will take how much they borrowed each year. They consolidate those loans. They average those out, and they will probably get a reduction of about like 4\1/2\ percent. And if they borrow the maximum during that period of time, they will end up with a savings of a little over $2,000, not $4,400, as some are saying.
I think it is really important to really have the true facts out there so that we don't give people this idea that tomorrow my interest rate is cut in half.
And also, that only pertains to the 50 percent of students that are borrowing on the subsidized basis. I know the promise during the campaign was, we are going to cut student loans across the board in half for all students. But when you tested that out you found out it cost about $60 billion, and to comply with the PAYGO they had to come back with this reduced offer.
Again, it will help people that have graduated from college, but those people are already well on their way to realizing the American Dream. If we could just take this same amount of money, the savings and try to help those who are trying to get into college, that is probably the major difference in our debate, is how we help people get an opportunity, not those who are now graduating and are benefiting from the college graduation and also benefiting from this reduced student loan rate.
Madam Speaker, I am happy now to yield to my friend from Mississippi (Mr. Wicker) 4 minutes.
Mr. Speaker, maybe if I reserve for a while, you can catch up with us a little bit.
Mr. Speaker, I yield myself such time as I may consume to respond to my good friend from Texas, whom I have worked with in the 1998 reauthorization when we helped the Hispanics, adding the title that helped the Hispanic community. He was one of the strong leaders that really helped his people and community. We worked together then. We worked together last year in bringing the bill to the floor that unfortunately died in the Senate, but it would have reauthorized the Higher Education Act.
I want to congratulate him. I understand he is going to be the chairman of the subcommittee in this Congress, and I am looking forward to working with him.
But I just want to say one thing to straighten the record out, we took $20 billion in the Deficit Reduction Act last year from the student lenders. We put $9 billion of it back into student services to help them; the balance we used in the deficit reduction which resulted in the $71 billion decrease, the deficit right now, versus last year.
Mr. Speaker, I reserve the balance of my time.
Madam Speaker, I yield myself such time as I may consume just to respond to the words that we just heard.
If a student in 5 years takes out a loan, they will not save $4,000, because this ends at the end of 5 years and the 3.4 percent is only good for that 6 months, the last 6 months of the bill. Then the loan goes back up to 6.8 percent. So at the end of 5 years, the student will be paying the same as they are now.
We just have to keep the facts correct. The rhetoric is good, but we should try to keep the facts correct.
Madam Speaker, I would be happy to yield 6 minutes to my friend the gentleman from Georgia (Mr. Kingston).
Madam Speaker, I am happy to yield such time as he may consume to the gentleman from Texas (Mr. Carter).
Madam Speaker, I yield myself such time as I may consume.
Let me remark again, as I said earlier, the Advisory Committee on Student Financial Assistance issued a report saying that 48 percent of our low-income high school students are not able to enter a 4-year university, and 22 percent of them cannot even get into a community college. I think we are in total agreement that we want to do what we can to help them get into school, and the numbers are not much different for the middle-income students.
The one thing that we are not really talking about too much is the cost of the education. I am concerned that the young people are graduating from college with a mortgage and no home. This debate we are hearing is all about the interest rate on that mortgage, on that loan, but what we should really be addressing is the cost of higher education.
I would like to just mention a few things that are driving that cost of education, some examples of some extravagant spending on college campuses, that if we had held hearings, we could have talked about a little bit. We have done this over the past when I was a chairman. We did have some hearings about this, but let me get some of these in the Record.
Cornell is investing $259 million in what it calls student life and residential facilities alone.
Ohio State University is spending $140 million to build what its peers enviously refer to as the Taj Mahal, a 657,000-square foot complex featuring kayaks and canoes, indoor batting cages and ropes courses, massages and a climbing wall big enough for 50 students to scale simultaneously.
The University of Cincinnati is spending $250 million on a Main Street of sorts, with everything from outdoor cafes to what is called a mall-style student center.
The University of Houston spent $53 million on a wellness center, including hot tubs, waterfalls and pool slides. The school has a 5- story climbing wall, while boulders and palm trees frame the leisure pools outside.
The University of Vermont plans to spend $70 million on a new student center, a colossal complex with a pub, a ballroom, theater, an artificial pond for wintertime skating and views of the mountains and Lake Champlain.
Now, we are not going to be able probably to talk about extravagant spending by the schools because we are not talking about the cost of college. We are talking about the cost of student loans that, because of this extravagant spending, students are having to take out to go to college.
Makes me want to go back to school. Some of these things sound pretty enticing. Some are pretty nice.
But what about the kids that are trying to get an education? They don't really, some of them, have time to use these hot tubs, anyway. They are working to put their way through school. Why don't we focus some of that stuff on the cost of an education rather than on just trying to save a few students who have already graduated, who are already on the ladder to receiving the American Dream.
Madam Speaker, I reserve the balance of my time.
Would the gentleman yield?
I yield 1 minute so we could talk about that.
I introduced a bill that really would have addressed some of these issues. In fact, in the last Congress we passed a bill out of this body. It stalled on the other side of the Capitol, but we passed a bill out of this body that would have addressed some of those issues, and we did it in a bipartisan way. I appreciate those who voted for it on that side of the aisle.
I yield myself such time as I may consume.
Madam Speaker, once again, we just heard that 5 years from now somebody that takes out a loan will save $4,400. Five years from now, there will be no savings based on current interest rates which are 6.8 percent because that is what the rate will go back to. There will be a 6-month window; if somebody takes a loan out at that point, that particular loan they will repay at 3.4 percent. The rest of the time it goes back.
Madam Speaker, let me be clear. Had this debate been held in the Education and Labor Committee, I believe the bill we are slated to vote on in a few minutes would have been substantially better.
What could we have done in committee to improve upon this badly flawed legislation?
For starters, we would have been able to change the fact that college students won't even feel the slightest impact from this plan until they begin repaying their loans when they aren't even students anymore. In other words, we would have made clear that this proposal does nothing to expand college access. And, as a result, we could have done better.
Had we done our work through regular order, rather than providing 5 years of gradually increasing benefits to college graduates, we could have crafted a reform measure that continues our commitment to real student aid, a reform measure, while ensuring a sharper focus on institutional accountability. And, as a result, we could have done better.
And, had this bill gone through committee we also would have been able to work to ensure this proposal included language that improves college affordability. We would have discussed the fact that we are spending some $90 billion this year on Federal student aid, triple what it was just a decade ago, and we also would have reminded one another that even in spite of this dramatic increase in aid, tuition continues to skyrocket. And, as a result, we could have done better.
In committee, Madam Speaker, we also would have more quickly exposed those who were playing fast and loose with the facts. For example, when some on the other side of the aisle say that a typical borrower would save about $4,400 over the life of his or her loan because of H.R. 5, we would have made clear that this simply is not possible. We would have explained to our committee colleagues that for a borrower to receive the complete $4,400 in savings, the 3.4 percent rate must stay in effect for years at a time rather than the 6-month window, and they must consolidate their loans and stretch out repayment over 15 years.
In reality, Madam Speaker, for a college freshman who receives a loan at 3.4 percent in the fall of 2011, the only semester during which such loan rate will be available, he or she would save a whopping $6.42 a month in repayment. That is right, $6.42, thanks to the bait and switch tactic disguised as a sunset in this flawed legislation.
Consider this: If we were to put the same savings into Pell Grants, for example, that H.R. 5 earmarks for these gradually reduced interest rates for college graduates, we could increase Pell by about $500.
I only wish we were afforded that opportunity. However, we weren't, and the legislation before us is little more than a reflection of the broken process by which it was cobbled together.
