Conference Report on H.R. 2669, College Cost Reduction and Access Act

CONFERENCE REPORT ON H.R. 2669, COLLEGE COST REDUCTION AND ACCESS ACT -- (House of Representatives - September 07, 2007)

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Mr. SOUDER. Madam Speaker, I thank the distinguished ranking member, and I stand up in opposition to this bill, not because I don't want to control tuition costs. This bill doesn't control tuition costs. This is a fundamental disagreement about the direction of our government.

Do we believe in markets or do we believe in the Federal Government? This is a remnant of the battle where we moved from direct lending over to free-market lending, that this bill, in fact, does nothing to control costs. Inevitably it will lead to the government taking over in direct lending and government having to try to fix costs of lending and then to fix the tuition costs, because there's nothing in here that balances tuition costs.

Previously, students and parents, if they had to factor in rising tuition costs and they couldn't get affordable loans, the pressure of the market would come on universities and colleges and alternative forums, and the market would respond, but this bill releases the market pressure.

Furthermore, in this bill there are other things that, instead of putting the money for those students who are highest risk and have the least income in Pell Grants, we've expanded into the middle class where the only hopeful pressure for tuition costs would come from. Students who could achieve academic scholarship in most universities can get into the highest universities if they can achieve the scholarship level. Let's look at this debate where it really is. It's in the middle class. It's about does the private sector manage loans better than the public sector and how does that triangle work with the universities.

For example, under private sector lending, bad debts have gone down. Why? Because you get financial counseling. There's a private sector incentive to make a profit that results in counseling of saying, will your degree match up your ability to repay or we won't give you the loan. They also put the pressure on the institutions, even with a small portion of the student loan being actual private sector.

But there's a provision in this bill, and I don't use this in a pejorative term, I use it in actual dictionary term, is the most socialist provision that I have seen in a bill, and it's the income-based repayment plan. It says that you only take 15 percent of your discretionary income to repay the interest, which then gets capitalized into the capital. Let me use my own personal example.

My father, we came from a nice middle-class family but middle class at best, in retailing. My dad told me he would either pay my way through grad school or undergrad. If I wanted to go to grad school, the college of my choice, he had saved a certain amount of money. I would have to live at home and go undergraduate. I got a great education at Indiana Purdue University in Fort Wayne, and then went to the University of Notre Dame. My father would have had no incentive under this bill to do so because in furniture retailing, followed by being a congressional staffer, I did not make enough money that I could have repaid my loan to Notre Dame or my undergraduate loan, and I would have had that loan excused at 25 years. I would have never paid, probably based on my salary, based on inflation adjustment, not a dime on the principal. There would have been no market management on my dad to save the money or on me.

This bill, by undermining both the lending premise of the private sector and the personal responsibility of parents and students to balance this, is a purist government takeover of a project that will not reduce the cost of student loans but will expand the power of government and the inefficiencies of government and ultimately damage students of America.

No matter how good and tempting it sounds, no matter what the campaign commercials sound like, it is a terrible, terrible bill.

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