Mr. President, I rise today with Senator Smith to introduce the Greater Access To Education, or GATE Act, of 2007. This legislation would amend the Internal Revenue Code of 1986 in order to make…
Mr. President, I rise today with Senator Smith to introduce the Greater Access To Education, or GATE Act, of 2007. This legislation would amend the Internal Revenue Code of 1986 in order to make college more affordable, and thus provide greater access to postsecondary education for lower income students and working families. Simply put, this bill would expand expenses which qualify for the Hope Scholarship Credit, prevent aid for needy students from reducing the credit, and make the Hope Scholarship and Lifetime Learning Credits refundable.
The cost of attending college in the U.S. has grown by 44 percent since 2000, far outpacing the median growth in income. We've seen a 35 percent jump in inflation-adjusted average tuition and fees for in- state students at public colleges and universities since 2001-02. The cost of going to college is 6.3 percent higher than just last year, averaging $12,796 including room and board.
Unfortunately, year after year, Congress has failed to raise Pell Grant Scholarships for needy students. This critical student aid has been frozen at just over $4000 for four years. Ten years ago, the maximum Pell Grant covered more than 50 percent of the cost of tuition, fees, room and board at a public four-year college. Last year, it covered only 35 percent of those costs.
At the same time, we're seeing increasing competition among colleges and universities for the highest scoring students. And these students command higher tuition discounts, particularly in the form of merit scholarships. As a result, there's a smaller proportion of the financial aid budget available for low income students at colleges with rising tuitions.
A recent report by Education Trust found that many of the flagship and research-extensive public universities have reallocated financial aid resources away from the low income students who need help to go to college--mostly to compete for high income students who would enroll in college regardless of the amount of aid they receive. Between 1995 and 2003, flagship and other research-extensive public universities actually decreased grant aid by 13 percent for students from families with an annual income of $20,000 or less while they increased aid to students from families who make more than $100,000 by 406 percent. In 2003, these institutions spent a combined $257 million to subsidize the tuition of students from families with annual incomes over $100,000--a staggering increase from the $50 million they spent in 1995.
In addition, many colleges and universities are now using ``enrollment and revenue management'' firms to help manage admissions and financial aid. I am concerned that too many schools are trying to leverage their financial aid to entice wealthier and high scoring students to attend their schools, at the expense of aid to lower
income students. In essence, they're directing financial aid dollars to students who will increase a school's revenues and rankings.
As a result, low income students are disproportionately bearing the brunt of increased college tuition and fees. In turn, more and more students increasingly rely on loans to finance their education. And, we've seen a significant increase in the amount of student debt in this country. In New Mexico, the average student now graduates from 4 years of college with more than $16,000 in debt.
And, last year, Congress cut $12 billion out of the Federal student aid programs, pushing college further out of reach for American families. It is the largest single cut the Federal Government has made to student aid programs, and it is expected to increase the debt burden of students and their families as many borrowers of student loans will face higher interest payments.
Congress, simply, has moved in the wrong direction, and failed to help make college more affordable for students from low income and working families.
Full time students receive about $3,100 per year in aid in the form of grants and tax benefits at 4-year public institutions. In 2003-04, however, only 56 percent of 4-year public institution students from families with incomes below $30,000 received sufficient grant aid and tax benefits to cover tuition and fees.
Even worse, we know that each year there are hundreds of thousands of students who are prepared to attend a 4-year college but do not do so because of financial barriers.
We must reverse this course and make college more affordable for students from low-income and working families.
The first priority for this Congress should be to increase student aid for needy students. We must increase the amount of Pell grants to at least $5,100.
The next thing we should do is make sure that the existing education tax credits work effectively for the families that need them most. The Hope Scholarship and Lifetime Learning tax credits have helped millions of Americans finance their college education. For this tax year, the credits allow eligible tax filers to reduce their tax liability by receiving a credit of up to $1,650 for the Hope program or up to $2,000 for the Lifetime Learning credit for tuition and course-related fees paid for a single student.
Unfortunately, research shows that these tax credits are not working as effectively as they could be. They do not support students who are currently enrolled in college to any significant degree, and they do not induce greater numbers of students, including working adults who need to upgrade their education and skills, to earn a postsecondary degree.
Many students and their families are unable to take advantage of the maximum amount of the credit because it is limited to covering ``tuition and related expenses.'' Students who attend colleges with lower tuition costs, such as those attending community colleges, are not entitled to the maximum amount of the credit.
For college students attending institutions with relatively high tuition rates, the maximum credit will be available to cover the higher tuition. This is not the case, however, for many students, particularly the vast majority of community college students, as well as hundreds of thousands of students attending public four-year colleges, who attend college where the tuition is lower. These students are not able to access the full credit because tuition at these institutions is lower than the maximum credit, and the scope of the credit is limited to tuition and related expenses. College students must pay for much more than just tuition, however, including room and board, books, supplies, equipment and fees.
Further, a student's eligibility for the Hope tax credit is actually reduced by any grants the student receives--Federal, State, or private. The impact of this limitation is felt particularly by the by the low income students that receive Pell Grants or other Federal or State assistance. Often, the assistance received fully offsets the amount of the credit.
This legislation is simple and straightforward, and is crafted to address these shortcomings. First, in addition to tuition, it allows the Hope credit to cover room and board, required fees, books, supplies, and equipment. It is important to note that the IRS Code commonly recognizes non-tuition expenses, including substantial living expenses, in programs such as Section 529 plans and tax-exempt, pre- paid tuition plans.
As we all know, tuition is just one of the many expenses associated with going to college. Room and board, books, supplies, equipment and fees can be prohibitively expensive for those who attend colleges that have reasonable tuition charges. The cost for books and supplies alone can be as high as $1000 per year.
In addition, the legislation changes the IRS Code so that any Federal Pell Grants and Supplemental Educational Opportunity Grants students receive are not counted against their eligible expenses when Hope eligibility is calculated. This change will provide some assistance to needier students, especially those attending four-year public colleges.
But these fixes only get to a part of the problem. Because the education tax credits are not refundable, a family of four must earn above $30,000 to get the maximum credit. A student or working family must have a positive tax liability to receive the credit. Nearly half of all families with college students do not get the full credit because their income is too low.
In fact, only 36 percent of filers claiming the credits at all had incomes under $30,000; less than 10 percent of filers claiming the credits had incomes under $15,000. By contrast, 36 percent of filers claiming the credits earned $50,000 or more.
Making the credits refundable would ensure that families in lower tax brackets are eligible for the maximum benefits and would thus make college more affordable to those students and families who need the most assistance.
I believe we all can agree that maintaining a skilled and educated workforce should rank as one of our highest priorities. The National Academy of Sciences projected that while the U.S. economy is doing well today, current trends indicate that the U.S. may not fare as well in the future, particularly in the areas of science and technology, where innovation is spurred and high-wage jobs follow.
This Congress should do everything in its power to ensure that every capable student who wants to go to college should be able to, which will in turn ensure that we have workers to fill the high-quality, high-wage jobs we are working so hard to create. I urge my colleagues to support this critical legislation.
I ask unanimous consent that the text of this bill be printed in the Record.
Mr. President, I rise today with my colleague Senator Domenici to introduce a bill to designate the United States Courthouse in Santa Fe, NM as the ``Honorable Santiago E. Campos United States Courthouse.'' Santiago Campos was appointed to the Federal bench in 1978 by President Jimmy Carter and was the first Hispanic Federal judge in New Mexico. He held the title of Chief U.S. District Judge from February 5, 1987 to December 31, 1989 and took senior status in 1992.
Judge Campos was a dedicated and passionate public servant who spent most of his life committed to working for the people of New Mexico and our Nation. He served as a seaman first class in the United States Navy from 1944 to 1946, as the Assistant Attorney General and then First Assistant Attorney General of New Mexico from 1954 to 1957, and as a district court judge from 1971 to 1978 in the First Judicial District in the State of New Mexico. He was the prime mover in reestablishing Federal court judicial activity in Santa Fe and had his chambers in the courthouse there for over 22 years. For his dedication to the State, Judge Campos received distinguished achievement awards in 1993 from both the State Bar of New Mexico and the University of New Mexico.
Sadly, Judge Campos passed away January 20, 2001 after a long battle with cancer. Judge Campos was an extraordinary jurist and served as a role model and mentor to others in New Mexico. He was admired and respected by all that knew him. I believe that it would be an appropriate tribute to Judge Campos to have the courthouse in Santa Fe bear his name.
The Senate passed a bill in the 108th Congress to name the same courthouse for Judge Campos by unanimous consent. Unfortunately, the House was unable to take up the measure and it failed to be signed into law. I rise again to ask the Senate to pass the bill and honor the work and dedication of Judge Santiago Campos.
I ask unanimous consent that the text of the bill be printed in the Record.