College Cost REduction Act Of 2007

Floor Speech

COLLEGE COST REDUCTION ACT OF 2007 -- (Extensions of Remarks - July 17, 2007)

* Ms. FOXX. Mr. Speaker, much of the $18 billion in new spending in the College Cost Reduction Act doesn't reduce the cost of college, but instead consists of new entitlements targeted at people who aren't even students. The bill cuts loan interest rates for those who have graduated from college--to the tune of $6.2 billion. This is less than the amount the bill allocates towards Pell Grants--a form of aid that actually goes to students.

* With so many new entitlements in this bill, I am concerned about the direction we are headed. Most of these new entitlements are given to institutions and to college graduates. The bill creates new TEACH Grants at a cost to taxpayers of $375 million. This new entitlement gives grants to colleges and universities. It doesn't cut the cost of college for students--instead it moves towards creating a system that discourages personal responsibility and has no congressional accountability.

* For instance, this bill expands a government program to repay the education loans of public sector employees. Public sector jobs include those in emergency management, government, public safety, law enforcement, public health, education, public social work, and public interest legal work. The current program repays loans remaining after 25 years of payment, but the expanded program grants loan forgiveness after 10 years of repayment, dramatically decreasing borrowers' incentive to pay off their loans.

* Take for example a college graduate working in the public sector and making $35,000 a year. If he or she has $20,000 in debt upon graduation, this debt would be paid off within 25 years and the Federal Government would not have to pay off any remaining balance. But under the new terms the federal loan forgiveness comes at 10 years, which in this case means a payoff of more than $10,000.

* This is a new $10,000 entitlement that creates incentives which directly discourage people in public service jobs from investing their own money in college debt. Why would someone pay off his debt at a rate any faster than the absolute minimum if he or she knows that in 10 years the Federal Government will come along and erase the remaining balance?

* I want Americans to have access to education, but I don't want this access to come at the cost of a new entitlement mentality and increased dependence on the Federal Government for meeting the cost of education. At a time when we face massive increases in the cost of entitlement programs, I question the responsibility of constructing a whole new set of entitlements that will saddle future generations with new layers of government spending and the higher taxes needed to fund these entitlements.

* Education is important for the success of this nation, but giving entitlements to institutions and college graduates is not the way to lower the cost of college. In fact, heaping helpings of new entitlements will do much to undermine our national success as we face an impending entitlement crisis in the coming decades.

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