Madam Chair, I yield myself 5 minutes. Madam Chair and Members of the House, we are now considering legislation that would significantly compromise the Department of Education's ability to oversee and safeguard our Federal investment in…
Madam Chair, I yield myself 5 minutes.
Madam Chair and Members of the House, we are now considering legislation that would significantly compromise the Department of Education's ability to oversee and safeguard our Federal investment in higher education and safeguard and protect the taxpayers who are paying for that investment in higher education.
This legislation couldn't be more ill-timed. In this tough budget environment, we should be concerned with how the Federal Government spends the limited resources we dedicate to Federal student aid. During the 2009 2010 school year, students relied on nearly $200 billion in Federal student aid to prepare for jobs for today and jobs for tomorrow. That's the money that they borrowed, and that's the money that was given to them in grants. If that money is not spent in a responsible way, and if it's not protected, it goes down the drain. It's lost forever, and the students are left with the debt.
Two years ago, the Department of Education's inspector general exposed a loophole that allowed a higher education institution to award more credits to get more student financial aid than was appropriate. They were charging for nine units a day that they said was graduate work. It turned out when the accreditors went through and looked at it, they deemed it was really the equivalent of 3 hours of credit work, and the level of work was at the undergraduate level. But they were able to charge the students, students had to borrow money, and at the end of the day they ended up with units that were worth nothing. Students attending this institution, many of whom were relying on Federal aid programs, were paying double the price because the school inflated the number of credits charged.
In response to the inspector general's findings and recommendations, the Department of Education promulgated rules defining a credit hour and providing other protections for students, including ensuring students have access to a complaint process if there's fraud involved. What the Department of Education did was necessary and narrowly targeted to address a very costly problem.
However, the bill before us today seeks to prevent the Department from protecting taxpayers and students. It would blow open the loophole that the inspector general concluded led to the inappropriate Federal spending. In other words, Mr. Chairman, the bill before us today explicitly increases the risk of fraud, waste, and abuse in our Federal student aid programs.
At a time when the higher education market is in so much flux, with new kinds of programs popping up around the country and online, this is the wrong time to open this loophole against the taxpayers' best interest.
The Department of Education should have tools to ensure that students who are eligible to receive Federal student aid are receiving it, and that the institutions that serve these students are upholding the integrity of the programs. This seems like a simple proposition: making sure taxpayers and students aren't getting ripped off.
This legislation eliminates those important consumer protections, and it does so under the banner of academic freedom. But the Department's protections do not interfere with academic freedom. Colleges and universities will continue to be free under the Department's rule to set whatever higher standards they see fit for their students as long as the accreditors agree. In this economy, millions of students rely on Federal student aid programs to make the college dream a reality. This is exactly why the Department of Education has moved to ensure greater accountability and taxpayer protection. And it's exactly why the legislation is misguided.
Now more than ever, we need accountability in higher education that works in the best interests of students who use Federal aid programs.
In the last Congress, Democrats worked to make sure that our student aid programs worked in the best interest of students, families, and taxpayers. We also worked hard to make higher education more accessible for families for whom degrees may have been out of reach.
One way we helped to make higher education more accessible and affordable and financially manageable for students and families was to lower the interest rates on loans. Specifically, we lowered the interest rate on need-based student loans to 3.4 percent, almost cutting the cost to those borrowers in half. The interest rate reduction is scheduled to end this summer. It will bounce back to where it was before the Democrats acted to reduce it. For the sake of our students, low rates should be extended. If Congress fails to act, interest rates on need-based student loans for more than 7 million students will double this July. This increase will cost an average borrower almost $2,800 in additional interest payments.
At a time when our economy is on fragile footing, we shouldn't be building more hurdles for young people to get the education and the skills they need to succeed. When interest rates are at historic lows, we should not be asking students to pay more on their student loan debt just because Congress failed to act.
Earlier this month, Mr. Hinojosa and I asked the committee's majority to take immediate action on this important issue. The President has called for action as well. But just like with other economic issues that are vitally important to the American people, those requests have been met with silence.
So today, instead of saving students from interest rate hikes, we are here debating a bill that will take away the tools the Department of Education needs to oversee and protect our investment in higher education, to protect those students who are borrowing money to go to college.
I urge my colleagues to vote against this legislation. I urge the majority to take up a bill to make sure that interest rates don't double come July.
I reserve the balance of my time.
Madam Chair, I yield 3 minutes to the gentleman from Texas (Mr. Hinojosa), the senior Democrat on the Higher Education Subcommittee.
I yield 2 minutes to the gentleman from New Jersey (Mr. Andrews).
(Mr. ANDREWS asked and was given permission to revise and extend his remarks.)
I yield 2 minutes to the gentleman from New Jersey (Mr. Holt).
I yield the gentleman an additional 30 seconds.
I yield 3 minutes to the gentleman from New York (Mr. Bishop).
I yield 2 minutes to the gentlewoman from California (Ms. Woolsey).
Madam Chair, I yield 2 minutes to the gentleman from Ohio (Mr. Kucinich).
Madam Chairman, I yield 2 minutes to the gentlewoman from Connecticut (Ms. DeLauro).
Madam Chair, I yield 2 minutes to the gentlewoman from California (Ms. Waters).
I yield the gentlewoman an additional 30 seconds.
We have no further speakers, Madam Chair, and I yield myself such time as I may consume.
Madam Chairman, I would just conclude that I think, when you consider the $200 billion that the taxpayers of this country provide through the Federal Government student aid programs to the institutions of higher education all across the country, all of different dynamics, that before we throw out what modest accounting system we have for trying to make sure that we buy value for each and every student who spends their money, the money that they borrow, the money that their parents borrow to try to provide them the educational opportunities so that they can participate in the greater American opportunity all across this country, we ought not to be throwing this system out.
As Mr. Bishop pointed out, this is a minimum requirement. It's a requirement that many people will recognize. When you sign up for a three-unit course, very often you find you spend 3 hours a week in that class. If you sign up for a five-unit course, you're spending more time.
The question really becomes--now as we see a lot of different institutions mixing into this space and receiving and living off almost 85 to 90 percent of their revenues that come from the Federal taxpayers--do these courses really have value? Are they giving the student the value for which they're signing up?
The record is replete that in many instances that's not the case, that in many instances the students have been defrauded. In many instances, it was represented that this was all transferable to the State colleges and to the university systems when, in fact, it turned out not to be true.
I think that we ought to make sure that we don't throw out that current accounting system to make sure that taxpayers and students are getting value for the money that they spend and the money that they work hard to pay back at a time when we have nothing to take its place.
The idea now that in the future you need no accreditation in a State to start up an institution and then you have access to all of the revenues you can grab from the Federal Government makes no sense to me at all. We ought to have accountability in this system, and that accountability runs to the students and it runs to the taxpayers in this country. I would hope that we would reject this legislation.
I yield back the balance of my time.
I thank the gentleman for yielding.
Just quickly, you can't have it both ways. You can't say, well, a lot of States are already doing this, but now we don't want to add a burden. This simply says the State has to have a process. If the State has a process, it's over, it's done. So why would we take away that voice in those States that don't have a process?
Let's make sure that students have a place to go. As we know, many of these financial scandals have been brought to us by students because they can't get redress anywhere else. I urge an ``aye'' vote on this amendment.
I rise in opposition to the amendment.
I thank the Chair.
This amendment is absolutely consistent with this legislation. What it does is just simply make it easier for any institution to maximize the amount of Federal aid they get.
Under this amendment, they would be able to choose whether or not they want to be a clock-hour or a credit-hour institution, and that would depend really on how they could game the reimbursement that's available to them again without checking whether or not this provision allows for the student to receive value for that money which they borrow to pay for their education. I oppose this amendment.
I yield back the balance of my time.