Statement on the 21st Century Competitiveness Subcommittee Mark-up of the Higher Education Act (H.R. 609)

By:  Dale Kildee
Date: July 13, 2005
Location: Washington, DC

Statement of the Honorable Dale E. Kildee
21st Century Competitiveness Subcommittee Mark-up of the Higher Education Act (H.R. 609)

Good morning Mr. Chairman, I am pleased to join you today to rewrite the laws governing student aid and higher education.

We believe that the cuts in this bill, if enacted, would represent the single largest cuts to the student aid programs ever.

This isn't the kind of legacy that this committee should leave to our children, students and families.

As you know, I have long advocated for expanding college opportunities for all students.

Every five years, congress has the opportunity to rewrite the higher education laws to boost college opportunities and to make college more affordable for low and middle-income students.

Unfortunately, we are reauthorizing the higher education act with a giant elephant in the room—reconciliation.

The Republican budget resolution forces this committee to make huge cuts to the student aid programs—which could total as much as $12 billion over the next five years.

While this bill saves the government some money by cutting excessive subsidies, it also cuts billions in vital student aid benefits.

It is more important now, than ever before, for congress to expand affordable college opportunities to students in order to ensure economic success, national security and to meet our national priority needs.

Yet, last year the maximum Pell grant scholarship was worth nearly $800 less, in real terms, than the maximum grant 30 years ago.

The typical student debt nearly doubled to $17,500 over the past decade and two-fifths of all student borrowers have unmanagable debt burdens.

At the same time more and more students are working long hours to make ends meet.

While there are positive provisions in this bill—such as ending the 9.5 percent loan loophole and reducing origination fees—this bill does more harm than good for college students and their families.

I am troubled that H.R. 609 raises the interest rate cap on students—despite a recent law that congress enacted to lower the cap to 6.8 percent in 2006.

H.R. 609 goes back on Congress' promise to students to significantly lower the cost of borrowing and raises the student loan interest rate cap to 8.25 percent.

As a result of this change, the typical student borrower could be forced to pay $2,600 more for his or her college loans.

In addition, this bill will force low- and middle-income students to pay thousands of dollars more for college by:

· Capping the maximum Pell grant through 2013;

· Eliminating the low fixed consolidation rate benefit—which according to CRS, will force the typical student borrower to pay $3,300 more for his or her loans; and,

· Forcing a tax on student borrowers that will charge them $3.6 billion in additional taxes over the 10 years.

I am also concerned the repeal of key student aid safeguards—absent new protections—will expose students to increase fraud and abuse.

It is imperative that we refocus on the original intent of the higher education act:

That no college qualified student should be denied a higher education because he or she lacks the financial resources.

Just at the time that millions of students and their families continue to struggle to pay for college, we should not be balancing a budget crisis on their backs.

This committee has a long history of rewriting the higher education laws in a bipartisan fashion—including the last reauthorization, in which Chairman McKeon and I worked very closely together.

Mr. Chairman, as we proceed I hope that as we work in a bipartisan manner to make some key changes to this bill to better expand affordable college opportunities.

Thank you.

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