REPEALING SECTION 403 OF THE BIPARTISAN BUDGET ACT OF 2013--Motion to Proceed
Madam President, I thank the Senator from Connecticut for his partnership on this legislation. He has been a real friend and a true partner. We are happy to have the support of Senator Murray from Washington as well as Senator Sanders.…
Madam President, I thank the Senator from Connecticut for his partnership on this legislation. He has been a real friend and a true partner. We are happy to have the support of Senator Murray from Washington as well as Senator Sanders. They have been working on this issue for a long time.
This is the middle class issue of our time. It doesn't just belong to college-aged students; it belongs to all of us. Senator Murphy spoke about how important it is for those of us who have young children and are beginning the process of trying to save for our children's college education, but it also belongs to the grandparents' generation. So many people are thinking about whether they can help their kids to ameliorate their existing student loans or their grandkids to be able to afford college.
As Senator Murphy mentioned, we spend almost $150 billion in some form or fashion on Federal financial aid for institutions of higher learning, and that is good. That is a matter of national strategy. That is about the American dream. That is about the premise that the President talked about in his State of the Union Address, which is that if people work hard and play by the rules, they can move up the economic ladder. Higher education is one of the best ways to do that. It always has been in the United States of America. But here is the problem. The Senator from Connecticut talked about an individual example, but let me give the aggregate data.
Over the last 10 years, we have spent 20 percent more and we have gotten 25 percent less. We are spending 20 percent more and we are getting 25 percent less. That means that although our investment in higher education and theoretically in college affordability has increased, the net cost for students has gone up by 25 percent. We now have more than $1 trillion in student loan debt. It is the second largest source of debt, to mortgage interest, and it has now outpaced credit card debt.
This is a real crisis not just on the consumer level but as a matter of economic strategy for our Nation, because to the degree and extent that young people or people who want retraining or people who want to get a culinary degree or become a master carpenter or who want to become an architect or a doctor start to evaluate higher education and decide it is not a good value anymore, that doesn't just impact their individual family or their individual community but it impacts our national economic strategy.
College is no longer affordable to many people, and that is despite the fact that we are spending more in raw dollars and in inflation- adjusted dollars than ever before.
Senator Murphy talked about the innovation portion of this legislation. We also have an accountability portion of this legislation. Here is the basic premise: As an institution of higher education, if you are a for-profit, if you are a not-for-profit, or even if you are a public institution, it is not the Federal Government's job to determine what your mission may be. And certainly if you are a private for-profit, we are not here to dictate your organization's mission. But a for-profit institution has no special right to Federal funding. If you are going to receive billions of dollars in Federal subsidies, we think it is reasonable, as we endeavor to reauthorize the Higher Education Act, that we tie some reasonable public policy strings to those dollars.
All we are saying is that we want institutions of higher learning-- and especially their leadership--to wake up every morning and not think first about profits, not think first about how they are going to market to find more customers, but to think about access and affordability. And what we are saying is that different institutions may have different missions. A community college has a different mission than a
training institute, and a 4-year institution has a different mission than a graduate institution. That is all fine, and that is why we have established in this legislation an independent commission, comprised of experts, to determine what matrix of incentives and possible penalties would be appropriate for each institution.
But here is the bottom line: We are spending more and getting less, and we are spending $150 billion. This system is not working, and we are pleased to have the support of several of our colleagues. We are going to be enlisting the support of many others.
I am looking forward to continuing the conversation with the Senator from Connecticut.
I think the Senator is exactly right about that one. Let me give you some data. In 2011 only 38 percent of undergraduate students in a 4-year institution graduated on time. So when you think about the cost of college, you think about the per-year cost. But if it is taking 6 or 7 years, then the per-year cost is not as important as how realistic it is for you to finish on time. Just to be clear, those data could be skewed by the fact that there are part-time students and all the rest of it. That is not what we are talking about here. It is simply hard to finish on time.
But there is hope on the horizon. For instance, the University of Hawaii has undertaken a program called 15 to Finish. The basic idea is that students, especially in their freshman year, need to know that they need those 15 credits. They need to get help from their counselors so that by the time they are in their sophomore year, they are well on their way to completing their major of choice in the 4-year period of time.
The challenge now is that given that legislatures have cut funding to institutions of higher learning--and as a result you have fewer counselors and fewer people to assist in the student services office-- oftentimes you do not get real counseling with respect to what you need until it is too late, and then you find that you are on a 5- or 6-year plan. Your family may not have made the financial arrangement that puts you in a position to be on the 5-year plan.
From a revenue standpoint, if your mission as an institution--for- profit or not-for-profit--is just to fill those seats and to generate those dollars, then that does not matter to you. But the challenge we have right now is that the institutions--the publicly traded ones--have pressures to generate profits. But even the not-for-profits and even the public institutions--the Universities of Hawaii and the Universities of Connecticut--have had their funding reduced by the legislatures. So their CFOs are trying to figure out new revenue streams, and as long as they can keep enrollment up, that enables them to go back to their legislature and say: We are in the black.
What we are saying is that is not good enough. We are not asking you to be in the black. We certainly understand the need to be fiscally responsible. We certainly understand the need to generate tuition revenue. But here is the thing: The point of higher education is for students to be able to move up that economic ladder, and to the extent that not only is it not accomplishing that goal, but it is actually doing the opposite for some of our students, they end up with a mountain of debt and either no degree or a degree that they find does not make them employable in the marketplace. That is a national shame. That is why we have to address this issue.
The good news is we believe we are spending a sufficient amount of money on the Federal level so we can effectuate these changes just by saying: If you want to receive Federal dollars for your institution of higher learning, then we are asking you to focus on access and affordability.
I want to give one last piece of data because it actually shocked me, even as much as I have been working on this issue. The for-profit institutions comprise about 12 percent of the students and 30 percent of the Federal dollars. Madam President, 12 percent of the students and 30 percent of the Federal dollars.
So while there are institutions that are for-profit that are doing great work and there are not-for-profits and public institutions that have to do a lot better, let's call it like it is.
One of the major challenges here is we have to wrap our arms around undue profits and publicly traded companies that are generating profits and spending Federal dollars on marketing to students and not providing very much in the way of value.
I think the Senator is exactly right. We had the Senator from Indiana talking about debt and deficits and making sure we spend every Federal dollar intelligently. Right now, we are simply not spending this money in the most efficient and efficacious way possible. That is what this legislation is about.
Senator Murphy and I talked about how it might have been a little more
politically satisfying in the short run to put hard caps on college tuition and precipitous goals that would have been very easy for us to articulate. But the fact is, given that you have different institutions with different missions and you have great work being done at the community college level, at the certificate level, and at the 4-year and at the graduate level, we wanted to account for the different missions, and we wanted to make sure we did not create the kind of incentive program that, for instance, would prevent an institution from wanting to take a kid in who is from a lower income area and maybe, statistically speaking, is more likely to default on his or her loan.
We really want, as a matter of policy, to focus on access. So it is access; it is affordability; it is the consistency with the mission. But here we are spending $150 billion--more than we ever have--on this national priority, and our results are worse than ever. So the status quo cannot stand, and I am really looking forward to working with my colleague on this important issue.