College Cost Reduction Act Of 2007

Floor Speech

COLLEGE COST REDUCTION ACT OF 2007 -- (Senate - July 19, 2007)

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Mr. KENNEDY. Mr. President, I yield myself such time as I might use.

We continue the debate and discussion on the legislation that has been reported out of our Education Committee, which has strong bipartisan support. This legislation is being considered under a time limit, but certainly there is sufficient time to debate any of the kinds of issues or questions dealing with education this morning. We will have the two votes, as the leader has pointed out, at noontime. Senator Enzi and I are both here ready to discuss, debate, and work with any of our colleagues on this legislation. But we are very strong believers in this legislation.

This is the largest assistance to middle-income and working families that we have had since the end of World War II and the GI Bill. This is very substantial help and assistance. I think all of us, when we go home to our States, hear from families who talk about the increased cost of school, the increased cost of tuition, and the increased cost and burden associated with going to college.

We are also very much aware of the necessity of providing additional educational opportunities that are so essential for families, so essential for communities, so essential for States, countries, and the United States in a world economy.

Education is the equivalent, effectively, of hope and opportunity for the young people of this country. We are making a strong downpayment to help and assist the sons and daughters of working families.

My State of Massachusetts is blessed with many fine schools and colleges. About 80 percent of all those who go on to college get some kind of help and assistance over the course of their time they are in college, whether they go to one of our community colleges, one of our fine public colleges, or one of our fine private colleges.

So when we say we are providing help and assistance, through scholarships or through Pell grants, we are making a difference in the opportunities for our fellow citizens.

Our future depends on education. The future of our economy depends upon having educational opportunities. We are building on excellent legislation that was completed in the Congress earlier this year.

The COMPETE Act came through our committee, with the great leadership of Senator Bingaman and Senator Alexander. Our bipartisan effort gave additional focus and attention to enhancing the opportunities for young students to study math, science, engineering, and other areas that are particular needs for our country in the future.

This legislation builds upon that legislation in a very important way in terms of opportunity. That is what we wish to talk about briefly again this morning. By enhancing educational opportunities, we are going to strengthen our economy, we are going to be more effective in dealing with globalization, we are going to be more effective in terms of our national security because we are going to have better trained, better equipped personnel and better technology for those who serve in our military forces.

We also will equip the next generation with the ability to ensure that our democratic institutions at the local, State, and Federal levels work more effectively.

So education is the key. We are proud of this legislation and the difference it will make.

This legislation will provide a historic increase in the need-based grant aid. That is the enhanced help and assistance in the Pell program.

We will have better repayment options that cap a borrower's monthly payment at 15 percent of their discretionary income. That means all those who are going to be out there working are never going to pay more than 15 percent of their discretionary income on their student loans. That is particularly important in terms of what we call the public-sector jobs, where there is an enormous need in this country--enormous need. Our society needs more teachers, more emergency management and law enforcement professionals, more public health doctors and nurses, more social workers, more librarians, more public interest lawyers, and more early childhood teachers.

This bill also offers loan forgiveness program for borrowers in public service jobs: After they work as a schoolteacher for 10 years, paying no more than 15 percent of their discretionary income during that time, all their debt--all their debt--will be forgiven.

These are the key elements of this legislation.

We want to show what how we have tried to ensure that educational opportunity will be available to all of our fellow citizens here in America--including middle income and particularly the low income families. We know from experience the challenges that are out there.

This chart gives an idea about the increases in tuition at public and private colleges. There have been enormous increases in tuition. We have tried to address that with our increase in Pell grant funds.

I want to take a few moments this morning, though, to talk about the focus we have given to the Pell program. Over 5 million Americans--5 million Americans--all across this country participate in the Pell program. With the commitment we had back in 1965 when we passed the Higher Education Act, we wanted to make education available to all Americans--all Americans and we understood that those who had particular financial needs were from working families. We developed this under the leadership of Senator Pell of Rhode Island, our leader and then-chairman of the Education Committee. His name will be associated with this program for as long as it exists, along with other very worthwhile programs, including the National Endowment for the Humanities programs, the National Endowment for the Arts, and others.

This chart shows the help and assistance in the Pell area. The program targets families who are generally making $50,000 or less. Individuals with moderate income still can gain some benefit, but they are not the target.

Let's look at this chart here. What does it show us? It shows that too few low-income students are prepared to attend college. This shows low income, moderate income, middle income, and high income. You see that those who are completing high school in the higher numbers, they are dependent on income. You see the higher income students are prepared to attend college,
and 47 percent of the lower income students are projected to be college-qualified high school students in 2004. I know these statistics are from 2000 and 2004, but we know the result is still the same. These are the figures as a result of publications last year. This shows we can have well-qualified, low-income students, but only 47 percent of them are going to be college qualified, to be able to go on to college.

Once these students graduate from high school, we see what happens. Only 20 percent of them are going to be able to earn a bachelor's degree. Why is it 20 percent? The reason it is 20 percent is because of, by and large, the financial burden. So we have the lower income, moderate income, middle income, and high income. If we are going to be one country with one history and one destiny, one Nation, we have to have at least the opportunity in the areas of education; which is so basic. I think we need it in health care and other areas of public policy as well, but education is key. If we are starting off with a model where income largely determines who will be able to get the education and who will not, we have a divided Nation. If we say we want to give equal opportunity to the citizens of this Nation, we cannot have this kind of disparity.

What have we done now with the proposal? We have said, for those individuals who would be eligible, as I mentioned on those first two charts, we have increased the Pell grant. This will directly help those individuals who are going to be unable to complete their education because of the funding levels. The Higher Education Access Act will build on what we started by increasing the maximum Pell grant to $5,100 next year--a $790 increase--and to $5,400 in 2011. We know that Pell grants have opened the door of opportunity for countless young students over the years. It is imperative for Federal and State legislatures to continue offering financial aid programs to colleges and universities across the county in order to even the playing field for the underserved and disadvantaged. It is an important targeting of resources to those children who are the neediest and need the greatest help, but also individuals who have competency and are able to gain admission to these schools and colleges. They have ability, but they don't have the financial ability. This is targeted to try and help and assist them.

Now, what else are we doing for those individuals? We are going to have the loan forgiveness provisions. How does that work? You have an individual, for example, who has gotten into the grant program and then they borrow some money to complete their education. That individual wants to go on and be a schoolteacher. The annual salary in my State of Massachusetts for a teacher is $35,241. The average loan debt is $18,169. That is about the national average, and it has doubled in the last decade.

So we say we are targeting these resources. Of the $18 billion we have taken from the lenders, we have close to $1 billion, that will go for deficit reduction, and we have taken the other $17 billion, a major portion of which will be used to help and assist those students who are individuals of ability, but who lack the financial help and assistance to go on to fine schools and colleges. We are giving them the bulk of the resources to help and assist them to go to the schools and the colleges.

Then we say--when they graduate, they are going to have a rather sizable debt. These individuals want to give something back to the community, and we find out they want to be a schoolteacher. So if they are $18,000 in debt, how are they going to be able to pay that off?

We say they are going to be starting in what is a public sector area. This is a schoolteacher in this case. They are $18,000 in debt. When we put the cap on the amounts they are going to have to repay of their debt, it is going to save them $732 a year from what they would otherwise have paid--$732

a year--if they go into public service. That is the amount, because of the 15-percent cap that we put on their annual salary. That is a big chunk of change; $732 is a big chunk of change for students just out of college.

Then we say if they did this for 10 years, if they teach for 10 years, then we forgive the remainder of their debt, which is over $8,000. That debt will be forgiven. We reduce their annual yearly payment by $700 and forgive their debt by $8,000. These are individuals who are going into a profession where there is an enormous need. We need to have tens of thousands of teachers within the next decade.

Now this is the chart for a teacher. I can give an example of another public service provider, and I will do that in a minute or two. But this is illustrative of what this legislation does. It is heavy in terms of the targeting, in terms of the Pell programs, and in terms of the loan forgiveness. We also have the provisions, as was brought out during the debate and the discussion, to permit these younger people to earn more when they are in various work-study programs, or working even as they are going to the universities. It used to be if they earned too much, they would lose their need-based aid because they no longer qualified. We give greater flexibility, which will encourage younger people to earn something in addition, that will maybe help them buy more books or help them buy computers. We increase the eligibility for auto-zero from $20,000 to $30,000. It doesn't sound like a great deal, but there will be further opportunities for those who are in working families to be able to participate in this Pell program.

I use this example of a student who will be a public defender. I will put up the list of all of the examples. I am using the example a teacher, but the bill forgives the direct loan graduates of their debt who work for 10 years in any form of public service, including emergency management, public safety, public law enforcement and government, education, early education, and childcare. The need we have now is for teachers. This bill incentivizes people to pursue jobs in early childhood education, among others. That is a key element. If you read the great book ``From Neurons To Neighborhoods'' by Jack Shonkoff from my State of Massachusetts, it brings together all of the National Academy of Sciences evaluations for the support of children in the earliest months of their lives, let alone the earliest years, and how that helps stimulate the synapses in the child's brain, helps develop the sense of confidence, the sense of inquisitiveness, the sense of capacity for learning, for early childhood education. We have expanded those opportunities in another piece of legislation Senator Enzi and I worked on; the reauthorization of the Head Start Program.

The work of public servants is so important. We have public education, early childhood education, childcare, and all the public services working with the disabled and the elderly. We know the increasing requirements so many of our parents have, in terms of being able to live independently and to live with dignity. So this bill will encourage those who want to work with the disabled and the elderly, or in public interest legal services as prosecutors of the public defense. We want our judicial system to work and to work fairly for people, to give them the kinds of protections but also give them the kinds of defense. Public school libraries, library sciences, and other public school-based service providers. Also, teaching full time at tribal colleges or universities.

We find, as I am sure other Members do, when you go to the fine schools and colleges across this country--I find it in my State of Massachusetts--the amount of volunteerism that is out there among the young people. Many of them go, in my State, into the City Year program, one of the great programs of volunteerism we have had. The program has spread in this country and around the world in many respects. They go into public service programs to help and assist and volunteer at the schools and colleges in the communities. We have a wonderful small college, Stonehill College, and one of their defining aspects as a college is to help young people start nonprofit agencies. They give them help and assistance in how to start nonprofit groups. They, for example, started eight nonprofit groups to try and relieve the problems of hunger in southeastern Massachusetts.

Young people want to get involved. Young people want to make a difference in people's lives. Young people want to provide service. This legislation will do more to give them the opportunity when we have areas of critical need than anything we have done in recent times. This is an area that says, look: You want to work and work in the public--you want to give something back to your community, local community, or State, if you want to do that, we are going to give you help and assistance. We are going to recognize it, and we are going to make it manageable for you to do it. We have the constant illustrations, particularly in medical schools, where the great majority of young medical students in their first year want to become general practitioners--the overwhelming majority. Then by the second year or the third year, that group is down to a handful. Why? Primarily because of student debt. They know when they get out of medical school, they too often are making decisions about their areas of specialty based on the profession that is going to permit them to pay off that student debt, rather than be able to go into a neighborhood health center and to provide help to those who need it.

So we have made this as wide as we could in terms of trying to respond to that sense that is out there in our schools and colleges, in all parts of our country, urban areas and rural areas, to say: Look, if you want to give something back, we are going to make it possible. We are going to give you a greater opportunity for you to go to college, particularly if you are from working families and low-income. We are going to give you a better opportunity to do that. With the amendment of our friend from Alaska, Senator Murkowski, it is going to help and assist States to take many of the younger people who need help and try to give them focus and get them on the pathway to school and colleges. We are going to give that encouragement and help the States.

Many States have established these kinds of nonprofit agencies that do a superb job. We have some in my own State of Massachusetts. They do a breathtaking job in encouraging people to do it. And then we have, in our authorization, the extraordinary work of Senators ENZI and JACK REED to simplify the student loan application and permit people who don't have a lot of student advisers and extra help to be able to use a more simplified form so they can understand what it is to be able to begin to make the application for school and college. We give greater assistance there.

This is all part of the efforts we have been making in our committee in terms of early education. We are going to make the changes to No Child Left Behind, and we are going to try to tie in kindergarten programs. We are going to have a seamless web so that will work more effectively, and those who go to college are going to be able to have met the initial college requirements. We want to try to do that more effectively. All that for another time. But in this legislation, we have gone in this direction.

Mr. President, this is just a brief survey of what I think are the compelling aspects. We decided initially that on higher education, we had to bring in lenders. We were not sure, going back over the years, how much incentives we could provide to the lenders to make sure the system would work. We found out they have made it work, and there are sufficient resources that we are going to continue to give to these lenders to make them profitable. But we can take the resources we have here and target those resources to the students who need it the most. We believe very deeply that educational opportunity is key to individuals' future and our country's future.

If we are going to be one country, as I think all of us believe we should be, we do not want to have the kinds of divisions that are increasingly putting pressure on the young people of this country at the present time. This legislation is doing a very important job in trying to address that situation and, again, I thank all of our colleagues because we have been able to, as Senator Enzi realizes, on the committee, in the areas of education, we have been able to rise above the issues of partisanship. We have had wonderful chairmen, including Senator Stafford from Vermont, and we had Senator Pell from Rhode Island, and we had our colleague, Senator Gregg, and Senator Enzi has been chairman of those committees. We have areas where we have our differences, although I must say I think on our committee we try to find common ground in areas of difference.

In the area of education, which is so important across the board, we have worked very closely together. I think this legislation represents a splendid opportunity to make a real difference for families in this country.

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Mr. KENNEDY. I thank the good Senator from Iowa for all his work on our education proposal. He has been a key member of our Committee on Education, and he has not only worked on it in terms of our committee but also as one of the important leaders on the Appropriations Committee to make sure that what we have authorized actually gets funded. I hope the young people in Iowa understand that, because we certainly understand it, and we are very appreciative of it.

Quickly, though, the Senator has outlined in careful detail how we have put the greatest amount of the savings of $18 billion, $17 billion to provide relief for the students in the Pell grants. But I want to underline one other aspect of the program which says that if young people are going to volunteer in terms of public service, they will pay no more than 15 percent of their income in return. Therefore, they will save a good deal of the amount that otherwise they would have to save, and then they will get the loan forgiveness at the end of the day.

I just list here the various areas of public service. His particular interest would be about halfway down, since the Senator from Iowa has also been our great leader dealing with the challenges of disabilities, and also with the elderly--public services for individuals who work with the disabled, also with the elderly, also with independent living issues as our population grows older.

So we have public health and social work in public service agencies, education, early education, childcare, our legal system, public defenders and libraries--working, even in the tribal areas.

As the Senator from Iowa found in his travels around Iowa in many of the schools and colleges, young people welcome the opportunity to be a part of giving something back to the local community, giving something as a teacher or helping the disabled. They are glad to do that. In too many instances, they can't afford to do it because they have too big a debt, but under this bill they will be able to do that, and at the end of the day, a grateful nation will say: If you do it for 10 years, your debt is forgiven.

I ask if the Senator will not agree with me that this is really one of the important provisions in this legislation, one of the compelling provisions? We have tried to provide help and assistance to those in the Pell program, but we are also trying to incentivize and give opportunity to young people who want to give something back to their communities by showing a grateful nation will forgive their debt.

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Mr. KENNEDY. If the Senator will just look at this chart. You mentioned about the public defender--annual salary, this will be a public defender in Indiana. Here is the average loan debt, probably as a public defender. The average is $19,000 but probably $51,000 if that person has gone to law school. We save them $2,800 a year in loan payments. If we do this for 10 years, I show the Senator from Iowa, if we do it for 10 years, their loan forgiveness is $33,000--$33,000 is forgiven.

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Mr. KENNEDY. I yield myself 5 minutes.

First, I thank our friends, Senators Burr and Nelson, for their interest in this issue. Senator Burr is a strong member of our committee and much involved in educational issues. We always profit from his suggestions and ideas, as well as Senator Nelson. As much as we profit generally, there are times when we do not. This happens to be that one time.

I have in my hand the pending legislation, which is Kennedy-Enzi, and the Nelson-Burr amendment. All one has to do is look on page 1 of both and they will see what the difference is. On Kennedy-Enzi, paragraph (A) is $2.6 billion; on Nelson-Burr, it is $1.6 billion. Paragraph (B) is $3 billion on Kennedy-Enzi; $2 billion on Nelson-Burr. Paragraph (C) is $3 billion according to Kennedy-Enzi; $2 billion on Nelson-Burr. Paragraph (D) is $3.9 billion; on theirs it is $2.8 billion. The point I am making is, it is $4.2 billion less in student aid. That is the basic point.

Is there a question about the economic stability of primarily Sallie Mae? This chart may be difficult to see, but if you look at the bottom, right here on the bottom right are Sallie Mae's own projections. All during the 1990s, at the time we made some modifications in giving the students more help, and Sallie Mae had always indicated that they were going to have more and more trouble. If you look at the end here in the blue, this is their projections in terms of their revenues and profits going out to 2006. This is their document, not ours. They are going to be financially secure in terms of the future.

The debate really is, do we want to do more for students or more for banks?

The final point I will make is, if you look at what the cuts are going to be, this chart represents for every State the effect of the Nelson-Burr amendment in reducing assistance for students. My State is $59 million. The State of the Senator from Rhode Island is some $16 million. But for every State in the country, this chart represents a reduction in student assistance.

The economic and financial advisers have indicated that these financial institutions are going to have ample profits. My concern is whether we have done enough in terms of the students, not have we done too little. That is why I believe students will be best served by resisting the Nelson-Burr amendment. They will benefit the most under our proposal.

If we are going to say we will leave it up to the appropriators, what are they going to do? They make certain assumptions that the appropriators are going to appropriate more money and, therefore, there really won't be a loss. If the appropriators appropriate more money, it will go to the benefit under our proposal. So Pell grants will go up and students will benefit even further. We provide effectively $800 in terms of Pell grants. They provide $500.

I hope this amendment will not be agreed to.

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Mr. KENNEDY. Mr. President, the point raised is, with these kinds of cuts, will it somehow eliminate the competition? CBO said we could actually have a three-quarters of 1 percent cut and there would still be profitability in the system. We didn't take three-quarters of this. We have taken 50 percent of one and 35 percent in the other. We haven't reached the three-quarters. So under the CBO, there is going to be competition. If you take Sallie Mae's own future projections, there is going to be competition. We have included in this legislation something that is enormously important, a trial program to have real competition out there to see who will compete for the lowest possible additional payments and ensure that we are going to get the benefits for the students rather than for the lenders. That would be enormous. That would be real competition. We are not there yet. We have a trial program in this legislation. Even under the administration's own figures, we haven't really threatened any of the potential lenders.

As the chart just showed, Sally Mae, the principal figure in this, is going to have ample profit over future years. I hope every Member takes a look at the charts and recognizes what is going to happen in terms of students in their particular States because under their program, there will be important reductions in terms of that assistance, particularly in the Pell Grant Program.

Do I have any further time?

The PRESIDING OFFICER. The Senator from Massachusetts has 45 seconds.

Mr. KENNEDY. As I understand now we are going to have three votes. The last vote will be on the Nelson-Burr amendment. I believe I am correct. The effect of that will be a reduction of some $4 billion that is provided in student aid. I hope that amendment will not be successful, and we will stay with the bipartisan recommendation that came out of our committee with an overwhelmingly bipartisan majority.

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Mr. KENNEDY. Mr. President, I thank the good Senator from Alaska for her efforts for not only the State of Alaska but for all our States and for the initiation she has provided for this amendment.

As she has quite correctly stated, one of the great challenges is that we have many qualified students, but they do not have the knowledge or support to be able to find the educational opportunities that are out there. There are nonprofit agencies in the respective States. This will help the States reach out to various groups and individuals in their State to assist them in finding the path toward education--the provisions that are included in this legislation.

This amendment is very much needed, and it will make an important difference. We have more than 400,000 students now who are not in college who are qualified to go.

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Mr. KENNEDY. Mr. President, all you have to do is pick up the Nelson-Burr proposal and the one recommended by the committee and you will see that there is $4 billion in cuts. Those are benefits that are going to go to students.

The question is, Are my colleagues going to support the students or are they going to support the banks? That is the issue. That is the question. Every State will see a reduction in the funding for students under this proposal. CBO has indicated, in evaluating our proposal, that the lenders, talking about the industry, are going to have profits--I will include their report--large and small alike. This is a question of whether we are going to support the students who need that help, need that assistance who are the future of our economy and of our national security or whether we are going to support the banks. That is the issue. This is the time.

I hope this amendment will be defeated.

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Mr. KENNEDY. Mr. President, I have heard the Senator speak very eloquently today about the elements of the legislation and his outline of his strong, continuing, ongoing support for the DREAM Act which I welcome the opportunity to support and will work very closely with him to try to achieve this very important legislation.

I have listened to him also talk about the division that is in America--whether we are growing as one country or whether we are finding out that we are really growing as different nations.

The Senator remembers very well, in the postwar period, if you look back at the economics, the lowest income, the medium income, the highest income families--all of them moved along together. They all improved together. We had the GI Bill which, over a 6-year period, invested the equivalent of a third of the total Federal budget for the year 1951. That is the kind of priority we had as a nation in terms of education, and many believe it is the principal cause of the creation of the great middle class in our country, the backbone and the strength of our democracy, our economy, and our national security.

I listened to the Senator talk about the DREAM Act, but I have also listened to him talk about the divisions that exist in our country. This is a chart here, which is really self-explanatory, which shows that low-income students are far less likely to graduate from college. This is what is happening today. As one who is committed to seeing that we are going to be one country with one history and one destiny, does it not underline the point that we have important responsibilities to try to ensure that all students, regardless of family income, can earn a college degree?

I am interested in, if we are really talking about the divisions that exist in our country--we see them so dramatically in the area of education--whether we have some real responsibility to try to equalize those disparities, and would he not agree with me that if we don't do that, we are going to be a nation that is going to continue to be a divided country with all of the implications that it has in terms of fairness and equality and opportunity for the future?

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Mr. KENNEDY. Mr. President, the Senator may remember the extraordinary work that was done in this area of education by a former mentor of his and a very close personal friend of ours, Senator Simon of Illinois. Whenever we had the debate on higher education, he always reminded me of the great debate we had in this country in 1960.

One of the principal issues that divided the two political parties at that time was the issue of education. At that time, Senator Kennedy believed that what we ought to have in higher education is a program that is going to give assurance to every young person in this country that if they have the ability to gain entrance into any college, that regardless of their resources, they were going to be able to put together a student aid package that would permit them to go where their talent leads them. He believed the country was a lesser country unless we were going to have that opportunity. Talent was going to be lost in terms of our Nation and our people. That was basically the philosophy behind the Higher Education Act.

As my colleague knows, two years ago the maximum Pell grant covered 55 percent of the costs at a public four-year college. Of course, that has completely been reversed in recent years, with the resulting disparity we see here. The maximum Pell grant covers just one third of the costs today.

Does the Senator not agree with me that we ought to at least set the goal that ideal we had at the time of the passage of the act; that is, any young person who has the ability and wants to work, can put together whatever their family can contribute and receive the aid they need to attend college. But we ought to, as an ideal and as a nation, move toward that particular goal where we are going to give assurance to every young person that if they work hard, they can afford a higher education. This is a matter of national priority; our belief in young people, our belief in their families, and our belief in the future of this country demands it.

I was always impressed by Congressman Silvio Conte, who is a Republican, and like so many people in this body--we heard from Senator Murray who talked about members of her family who are all professionals now who got the Pell grants, and Senator Cantwell, a very successful entrepreneur before she entered the Senate.

Does the Senator agree with me that this is an investment we should be involved in as a matter of national priorities, and that we ought to be, as a country and as a people, really leading the way toward having a goal of providing that kind of help and assistance to our country as well as to the individuals?

Mr. DURBIN. I certainly agree. When someone like Bill Gates of Microsoft comes and says: You have to give me visas so I can bring in foreign-trained engineers for my expanding information technology company, it really is a challenge to us. Why aren't we producing engineers here at home?

It comes to this point: Will there be the kind of support, financial support for those promising students to get into math and science and engineering

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or will they be discouraged at an early age and give up on it?

The same thing is true--and I know the Senator from Massachusetts is well aware of it--when it comes to the field of nursing. We are just a few years away from being 1 million nurses short of what we need in America. As the baby boomer generation reaches a point where it needs more medical help, there will be fewer medical professionals available. We don't want to see that happen. It compromises the quality of care and also puts pressure on the United States to poach--to go after medical professionals in developing countries to attract them to the United States.

So when we talk about this investment in education, it means a lot to the high-tech industry. It means a lot to every American in terms of basic health care. It means a great deal when it comes to the teachers we need.

I had the university presidents, several of them from Illinois, in my office just a few weeks ago, and they talked about math and science skills, how that is the one thing that troubles them as they look ahead, that our students aren't keeping up in the world in terms of developing their math and science skills. How do they reach that point? Better classroom teachers, which means more young people graduating college, going into the teaching profession, who can make that call because they are not worried about paying back their debt.

It all works together. If we start cutting back in terms of higher education, arguing we can't afford it, we will pay for it for decades to come.

Mr. KENNEDY. Mr. President, finally, the Senator remembers that this body passed the COMPETE Act, which was legislation that came out of our committee--Senator Bingaman from New Mexico, Senator Alexander from Tennessee were leaders on that bill--which had very strong, virtually universal support here, which gave focus in terms of encouragement in the areas of math and science and engineering. This is something, I know the Senator agrees, we ought to make sure we are going to invest in.

When we passed the GI bill, over those 6 years, we produced 450,000 engineers--450,000. We had three Presidents of the United States who used the GI bill, three Justices who served on the Supreme Court of the United States, and several Senators who were educated under the GI bill. This is investing in education.

We know what to do. The question is whether we have the will and whether the American people are going to be responding to this challenge.

I thank the Senator. I think we have work to do in this area. We have been able to find additional resources for the downpayment toward closing these gaps, and I give the assurance to the Senator that we will work closely with him to make sure we get the DREAM Act achieved and passed and we will also continue to eliminate the disparities in these charts.

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Mr. KENNEDY. If the Senator will be kind enough to let me examine it. That is dealing with the alternative minimum tax and deductibles that, quite frankly, as I was thinking about it, the Finance Committee deals with, and they would probably be the most valuable to try to address this. If we could deal with this first issue first, and then, if I might, try and get some member on the Finance Committee to come over and respond to the Senator's question because I think it deals with the alternative minimum tax.

I am not trying to delay, but I see the Senator from Maryland is here and would like to speak. I will be glad to respond to the Senator's presentation and move ahead in a timely way.

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Mr. KENNEDY. So the Senator understands, if you go on to medical school, more often than not you are probably closer to $100,000, by and large, by the time you finish medical school. But let's take the average college graduate, someone who might have gone through community college and then gone on to finish 4 years of college. They are ending up with about $19,000 in debt.

Is the Senator familiar with the fact that here in Massachusetts, a starting teacher gets paid $35,000 a year? Let's take a social worker in Tennessee. He or she earns $33,000. A public defender earns $43,000. They obviously have to borrow more because they need the additional professional training. This example here is of a public defender in Indiana. Their debt is $51,000.

Now, as I heard the Senator from Maryland, and we could go on across the line in terms of some of the areas of public need in this country, but if we take a school teacher, if we take a public defender, the size of their debt and the size of their income, is there any question in the Senator's mind those individuals, with that kind of debt and that kind of salary, that virtually that kind of obligation to repay at the present time is going to effectively make it impossible for those individuals who might want to go into those professions to do so?

Ms. MIKULSKI. I would be happy to respond, if the Senator would allow me to focus on the allied health professions of which I am quite familiar, that it affects, first of all, when you look at what you could owe, it affects your major. So if I want to major in nursing, or where there is another shortage, x-ray technology, and you look at what you are going to earn, and what you are going to owe, well, you will take perhaps an easier path, and something that will be more lucrative at the end of graduation.

So it starts in the freshman year when they are looking at that. Second, let's go to another issue in nursing. As the Senator knows, we have a problem with having enough people to teach nursing. That requires graduate training, master's, plus doctoral. Well, if you come out and you owe this bucket of bucks, and you are trying to pay off your undergraduate loan, working the terrific shifts the nurses work, and you are thinking about graduate school, you are not going to go get a master's or a doctorate to teach nursing, and we have little in the way of helping you. So we are, No. 1, affecting the shortages we have in these areas, and we are also exacerbating the people who would then have to go on to graduate school to teach the very people we need to teach.

Mr. KENNEDY. Well, let me ask the Senator something.

Ms. MIKULSKI. Does that help?

Mr. KENNEDY. That is certainly both understandable and expressing the reality of today. Say we are trying to attract a math teacher or a science teacher. We understand that if we are going to be competitive in the world, it is going to be in the new industries, the innovative industries. I do not know what it is in Baltimore, but I can tell you in Boston, it is difficult to get good math teachers to teach in our public school systems. It is very difficult to get good science teachers in there and good chemistry teachers to teach in there.

In the sciences, it is extremely difficult, because if someone is going to have the ability to be a good teacher, understanding their course structure, they are going to have to graduate from college, and then they may even have to go on to earn an advanced degree.

Now if they are still going to be paid a very modest salary, what do you think that math or science teacher is going to do? Do you think they are going to go to work in the private sector for $100,000 a year or go and teach the citizens in Baltimore or the citizens in Boston at a very modest salary?

What do you think is in the best interest of our Nation in terms of its competitiveness?

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Mr. KENNEDY. Finally, to the Senator, in this legislation, we have provided individuals in public service professions with loan forgiveness. We are talking about those working in public safety; we are talking about law enforcement; we are talking about public education, early child education, and child care.

We are talking about individuals who are going to work with the disabled and the elderly. The Senator has spoken so eloquently about the changing demographics in the country, and increasing concerns for our elderly to make sure that there are going to be alternative choices for those elderly people such as independent living. This bill also provides loan forgiveness for those in public legal services, library sciences, school-based service providers, and those who work at tribal colleges.

These are areas where there are critical shortages. Would not the Senator agree with me that these represent--represent--professions which are making a difference for other people, for other individuals? If we are able to have dedicated, competent, able, gifted people who work in those years, we are going to be a better Nation for doing it.

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Mr. KENNEDY. I wish to thank the good Senator from Maryland. She has a way of speaking and taking complicated issues and simplifying them and getting to the core and the root of them. She has done so in a very important way, which addresses an underlying aspect of the Sessions amendment; that is, the value of work in the public sector, the value of work in the public sector as differentiated from the private sector, because of the value it makes and the difference it makes to other people.

That is what we have tried to do in this legislation, in providing the loan forgiveness.

I wish to thank the Senator for her eloquence, and I wish to thank her for helping on this particular amendment. Effectively, the Sessions amendment would eliminate the provisions in this legislation that say that after 10 years, after 10 years of working in the public sector, the remainder of your loan would be canceled.

Now, that is the provision he has made. Now, a couple points I wish to address in terms of the Senator's representation. The fact is, in the legislation there is what we call an income cap. The earnings have to be less than $65,000. So if you go to work in a public service place and somehow you earn in excess of $65,000, you do not have your loans forgiven.

So this is targeted to the kind of individuals whom Senator Mikulski has talked of, the examples we have given out here, those who are in law enforcement, those who are teachers, those who are working in the nursing professions, those who are working in special needs; those provisions on page 30 of the legislation.

We feel strongly that this loan forgiveness is a critical part of this bill, and this is the distinction we draw from the Sessions amendment, and it has been stated so eloquently by the Senator from Maryland, the distinction between the public and the private sector and the great needs we have in terms of the public sector. That is very important.

I wish to remind my friend from Alabama, according to this legislation, he is one of the fortunate Senators in higher education, the increased grant aid for students for the State of Alabama is going to increase to $442 million over the period of the next 5 years. My own State of Massachusetts is $319 million. Alabama has come out very well, one of the most favored States in terms of the totality. We always try to look out after the Senator from Alabama and Alabama. I thought the Senator would be interested in that.

Mr. SESSIONS. Would you yield for a question?

Mr. KENNEDY. I would be glad to.

Mr. SESSIONS. I have supported the loan programs and the Pell grants. I like the Pell Grant Program. That is focused on a person of lower income. We probably do have lower income students in Alabama, and we probably benefitted nicely under the Pell Grant Program compared to more blessed States such as Massachusetts.

I simply would ask the question, the question I raise is: If you have two persons in nursing school and one is maybe already a nurse but trying to get a higher degree and she works and keeps her debt down, the one who does not do that gets more benefit than the other. It does only favor those in the public sector and not in the private sector.

I believe this bill continues the emphasis, which I support, on maybe having better Pell grant provisions for those who do math and science and some of the areas in which we have shortages. I believe it goes further than that, does it not? I know we did that last year. I think that was a good step in trying to help deal with shortage areas.

Mr. KENNEDY. I thank the Senator. I am a very strong believer in the nursing profession, and have been. I think they are the backbone of our whole health care system. We provide relief for nurses in this bill, whether they are in the public or private sector. For those in public health, there is loan forgiveness after 10 years in the profession. And for all graduates, we provide income-based repayment, which caps their monthly loan payments at 15 percent of their discretionary income. If a nurse works in the private sector, works at Mass General Hospital, gets a good salary there, or works out in the community in terms of trying to work with foster children or otherwise, they would both get some kind of student loan debt relief under this bill.

But on the loan forgiveness, the Senator is quite correct. We have targeted those individuals who are going to be working in what we consider to be the public sector, for the common good, for a larger sense of purpose for the country, as expressed so eloquently by the Senator from Maryland, to be eligible for the forgiveness. That is the point the Senator has made.

For example, under this bill, as I understand, a public school teacher in Alabama who earns $31,000 and the average loan debt in Alabama is $17,559, they could have the loan payments capped at 15 percent so it reduces his or her monthly payment by $59, from $203 to $104. That is about a 30-percent reduction which is not insignificant. Then after 10 years of teaching, under our legislation, all the remaining debt would be forgiven. In this case, a benefit of some $10,000, which is very significant. But they would have to teach for 10 years to be eligible for this. We think this is a better investment, a better trade, than continuing to give so much in Federal subsidies to the banks. We have taken it effectively from the profits of these lending institutions, and we see they are going to survive. We have the CBO figures that show that they are. We have their own figures, for example, from Sallie Mae, that show even with this legislation the profits they are going to make over the next several years. We think this is a good trade. This is a good policy matter.

I saw the Senator from Alabama leave the Chamber. I haven't talked with my friend and colleague, but we will be ready to move ahead and vote on that at the appropriate time. We will talk with our colleague and see if we can't figure out the best time to address this issue.

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Mr. KENNEDY. Madam President, we have moved along on the issues in this bill and have heard from many of our colleagues. We've had a good debate and discussion. Most of the members of our Education Committee and Human Resources Committee have spoken about this measure with very considerable knowledge and understanding and awareness and made a very strong and convincing case.

I think we have had very good opportunity to talk in considerable length and detail about this proposal. I am going to do a brief summary of this legislation in a moment and then we will hopefully have our leader come to the floor with a unanimous consent request so that we may find a pathway to move toward the reauthorization bill, which is very important.

The bill we're debating now--the reconciliation bill--deals with a key part of our education system; that is, the funding that is the lifeblood of our higher education system. But the authorization provisions are enormously important. We have worked very carefully together on the committee and we stand in strong support of those proposals. They deal with some very important matters.

One is the simplification of the FAFSA, the free application for federal student aid. That might not sound like a very important undertaking, but it is extraordinarily important. When you try and go through the older application, as many students have, or families have, they find it virtually impossible to understand.

We give great credit to my friend and colleague, Senator Enzi and Senator Reed for their work. We also have provisions that deal with the issue of rising college costs. We deal with the funding of students, we deal with addressing the needs of the neediest students in this country. We have also provided opportunity for the elimination or the forgiveness of indebtedness for those who are going to work in public service areas for 10 years. That is very important.

In the authorization legislation, we have provisions we think can be useful and helpful in terms of the overall cost of education. We support and encourage colleges to publish their tuition and fees, so that there is greater transparency and so that students and families have the knowledge to weigh their options. So that is enormously important. The other part of the authorization, which is absolutely called for, are what we call the sunshine provisions, the ethical provisions. We reform the student loan industry, so that it works better for students--not banks.

What we have seen over the course of our hearings and investigations are instance after instance where those who were involved in the lending aspect of the student loan programs at colleges and universities, and also in the programs themselves, have abused the system. We've seen instances where lenders give gifts, such as trips and performance tickets, in order to gain preferential treatment. That's unacceptable, and we're working to stop those kinds of abuses.

We have recommendations in this proposal to deal with that very serious problem. The members of our committee are very strong in terms of their support for the reauthorization. There are other provisions in the bill as well, but the most important are the ones I have identified. There is strong bipartisan support for those.

We know there are members who wish to address some of those issues in some way. We are glad to have debate and discussion on those matters. But it is our desire, certainly my desire, I know Senator Enzi's desire, that we try and move that authorization proposal in a short period of time. We will have a consent agreement on this shortly. Hopefully, with that consent agreement, we will be able to conclude the debate on the reconciliation provisions and yield back the time we have, and start the process of considering any of the outstanding amendments.

Certainly, the Senator from Alabama's amendment is a pending amendment and other members have talked about other amendments. I will address that issue in a few moments.

To give a very quick summary of what we have tried to do over the period of these past weeks in the area of higher education, we have effectively taken $17 billion from lender subsidies in order to give it to students, and we have deficit reduction distribution of close to $1 billion.

This chart gives a pretty good summation about what this legislation is all about. People who are watching this program, certainly the Members, now, after we have had a good discussion and debate about the program, have an awareness of what this program is about. It is a historic increase in need-based grant aid, the most important increase in need-based grant aid since the GI bill in World War II. This Nation reached out to so many of the young service men and women after World War II, and provided them an opportunity to go on to college and earn a bachelor's degree. What a difference it made for this country in terms of building the middle class, and in giving hope and opportunity to an entire generation. As we have pointed out time and time again, most economists believe for every dollar that was invested in that GI Bill, the World War II GI bill, $7 was returned to the Federal Treasury. We believe that to be true.

This is something the American people ought to keep in mind. In this legislation, the $17 billion is not coming from the taxpayers. It is money that is recovered from the lenders in the student loan program. So we have a historic increase in the need-based grant aid in this bill--an increase of over $700 next year alone for the maximum Pell grant.

We have better repayment options that cap the borrowers' monthly loan payments to 15 percent of

their discretionary income, discretionary income, I underline, because that is sensitive to individuals, size of their family, and we are responsive to that.

This takes into consideration the size of their family, which we think is enormously important. We have loan forgiveness for borrowers in public service jobs. We had an excellent debate and discussion earlier in the afternoon with the Senator from Maryland on that program, who told us enormously moving stories about her own life and others that she knew about.

This is a very important provision, the loan forgiveness, for borrowers in public service jobs. We have great need for more professionals in public service areas, and we have scores of young people who are interested in entering these fields. Visit any college, as I have, and talk to the young people, and the interest of the young people being involved in local community service programs, State programs or Federal programs in public service is extraordinary. I think it is the highest level of interest and involvement I have seen, that I can remember in memory.

The loan forgiveness provision in this bill helps address the enormous explosion of student loan debt we've seen recently, which closes out opportunities to attend college for far too many Americans.

We have gone through this in some detail during the course of the debate. We provided some protection for working students by not penalizing their earnings. So often individuals are trying to go out and work, they are hard pressed in terms of their resources that are available to them and to their families. They go out and earn some extra money. What happens, in a number of instances, is they exceed the provisions of existing law and work themselves out of some need-based aid.

We address that issue. The students are going to go out and work and work hard to be able to buy their books, to be able to afford their living expenses. We make sure they are not going to be penalized for their hard work. We offer longer deferment periods for borrowers in economic hardship. We also have additional consideration for those who have served in the Armed Forces of this country.

We had a good review of that program with Senator Murray late yesterday afternoon, a very important additional kind of protection for our servicemen, particularly those who are on active duty and find out, as we know, there are increasing extensions of their duty. We wish to make sure those individuals who are involved in defending this country are not bothered or harassed by those who are trying to collect their debt.

So this provides these benefits at no cost to the taxpayer by reforming the student loan industry so it works for students, not banks. This is not additional money from taxpayers for these programs. This comes from the lenders, from the banks, changing the way that this whole program works to benefit the students in a very important way, and in a way, quite frankly, that actually isn't going to cost the lending agencies that much profit.

Even with this particular proposal, we have seen the various CBO reviews, we have these financial officer statements we have reviewed. These lending agencies, they are going to do very well. We reviewed some of the documents of Sallie Mae itself, which pointed out the size of their earnings, which are going to be substantial, even with the inclusion of this legislation. So we do not need to have crocodile tears for the lending agencies. We ought to even strengthen those programs for the students of this country.

So this is the broad form and the broad shape of the legislation. When we talk about the need based aid, what we are talking about basically are the lowest-income families.

Pell grants assist 5 million of the neediest students, 5 million of them who are attending our universities. This is very important help and assistance. What we see is, as they take advantage of this program, it means they may be able to borrow less. By borrowing less, they have less monthly payments and this frees them to be able to focus on school, so that students during their breaks and during their free hours are going to be talking about their subject matter and about the books they have read, and their classes and teachers, rather than constantly worrying about the payment of their debt.

So this is a very major aspect of how we have allocated a major part of the $17 billion. We have, as every person knows who is in this Chamber, and every family knows who is watching this, an explosion of costs both at private colleges and public colleges.

We know many students who go to these public colleges and the private colleges are young men and women of extraordinary ability and talent; and many of them are also hard pressed financially. What we have tried to do, although we have not done it up to now, is to keep grant aid up with the incredible increase we have seen in the cost. We made a downpayment on that with our increase in the Pell grant maximum to $4,310 earlier this year. This bill goes even further, and raises the maximum Pell grant to $5,100 next year and to $5,400 by 2011.

As I mentioned earlier, we have made some recommendations in the education authorization bill to try and deal with costs in the future.

We have seen those costs go up.

This is a very important chart. Each year, nearly half of the lowest-income students, who are talented students, cannot go to a 4-year college because of cost. We know that 400,000 students don't attend a 4-year college each year because of cost. These are young people who could effectively gain entrance into college but cannot go because of the limitations of income. This is a great loss for this Nation, a great loss for those individuals. It is an incredible loss in terms of our Nation.

We tried, with the need-based aid and assistance in this bill, to provide help. We tried through Senator Murkowski's amendment to provide the mechanisms in the States to reach out to these students to assist them, to motivate them so they will go on to college, and explain to students the complicated financial aid process. That is enormously important.

With the work of Senator Enzi and Senator Reed, we have simplified the form for application for federal aid into two pages compared to the current form's eight or nine pages, which are hardly understandable for many parents and students.

This is what is happening. This is why we are seeing one of our candidates, Senator Edwards, talking about the two Americas. It is right here at the breaking point where we find out that half of the college-ready students, which means that they have the academic capability to go on to college, do not do so because of the cost.

These are the facts. This is the need. This is another way of expressing a similar point; that is, more students must take out loans to finance their education. In 1993, less than half of all graduates had to take out loans. But in 2004, nearly two-thirds had to take out loans to finance their education--an enormous increase. Students are borrowing more, and this is the indebtedness.

I see our leader on the floor. Knowing his responsibility, I would be glad to withhold and make whatever comments I might have after any comments he would want to make.

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Mr. KENNEDY. Madam President, I want to indicate to the leader that we have a pending amendment, the Sessions amendment. But we have effectively ended the debate on education. The students of this country and the parents of this country ought to know that we have done our duty, our responsibility. It is going to be those who are going to be offering amendments that have nothing to do with educating the children of this country who are going to be delaying what is a vital interest to the students and working families. We have been here, ready to deal with the amendments. We have a pending amendment with the Sessions amendment. But it ought to be very clear to every student who is watching this program and every parent who is watching that Senator Enzi, myself, and our committee--we have done our work. We are ready to have final passage. The House of Representatives has acted on this proposal. We are ready to go ahead and get to conference and get these benefits to students. If Members of this body have other issues, they ought to consider those at another time, or in another place. But every parent of every child ought to know, when we start having these dilatory amendments that are being offered, who is offering them and who is delaying the most important education program we have had here in the Senate since the GI bill in World War II. That is what this is about.

I thank the leader for both scheduling this and his willingness to stick with it. We are fine. It is 6 o'clock on a Thursday evening. We are glad to work, and we are glad to work through tomorrow, Monday, whatever it is. But the American people ought to know, when these amendments that have nothing to do with education are offered, who is on the side of the students and who is on the side of working families, who is on the side of middle-income families. We have been out here ready to deal with education amendments. We have one that is pending. But the idea that they are going to use this as some kind of vehicle to tack on every single amendment to cause what they consider to be difficult political votes, they are basically insulting the families of this country who know how important this issue is.

Make no mistake about it, we will know very soon who is on the side of the students and who is not.

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