College Cost Reduction and Access Act-Conference Report

Floor Speech

COLLEGE COST REDUCTION AND ACCESS ACT--CONFERENCE REPORT

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Mr. KENNEDY. Mr. President, for those who have been watching this debate and discussion, we just want to underline one fundamental and very important concept and principle: that the $20 billion which is included in this legislation--which is going to be used in the ways we have described earlier today, with the Pell grants, with the loan forgiveness for students who want to go into public service careers, for some relief for the middle class--not a nickel of that is taxpayers' money. That comes out of the lenders' pot of resources, which many of us believe is overly generous to the lenders. That is another issue. When we have time after the vote at 10:15, we will have some opportunity to develop that issue. But this is a transfer of $20 billion from the lenders for help and assistance to the students. There is no question about any of that. That is No. 1.

Importantly, as we are coming close now to the time where we are going to be voting on this issue, I am very mindful of those magnificent words of Nelson Mandela, one of the great heroes of the century, certainly of our generation. On the occasion he was asked about education, he said the most important weapon for change in the world is education. That is something those of us who are strong supporters of this proposal believe in. It was said, in my time, by President Kennedy, and also by President Lyndon Johnson, that no American, no qualified student should be denied--should be denied--a college education because of cost.

That is a concept. That is a value. I would think all of us on this side of the aisle believe that very deeply, and many on the other side of the aisle. We would not have made the progress we have made over recent years unless we had that kind of a commitment.

We have drifted from that kind of commitment, that ideal that was set by Mandela, that was understood by John Adams when he wrote of the importance of educating the common citizenry in the Constitution of Massachusetts. No state constitution has a more detailed ideal established in its constitution about educating the public than the Massachusetts Constitution, written by one of the greatest of our Founding Fathers.

It was understood by Horace Mann when he established the public school system--the importance of education, the importance of education in terms of opportunity and promise and hope. It was understood by Abraham Lincoln in the height of the Civil War when he established the land-grant colleges to help and assist the education of citizens all over this Nation. It was understood by Abraham Lincoln, understood by Dwight Eisenhower, when this Nation was challenged by Sputnik in the late 1950s and the development of the National Defense Education Act, understood by Franklin Roosevelt with the GI bill that has been available for more than 60 years starting with a generation that fought in World War II.

If you take the total cost of that GI bill that was expended--and as most economists have pointed out, there was a $7 return for every $1 invested in education, $7 returned for the cost of education. Talk about expending resources, talk about national priorities, this was the program that built the middle class in this country. This was the program that made America great.

Now we have the opportunity again to follow the wise counsel and judgment of some of the great philosophers--Nelson Mandela and John Adams--in our time and in our generation to renew that commitment. This bill is a downpayment for it.

I agree with my friend from Wyoming, we have to go ahead and do the reauthorization. We will do it. We are strongly committed to doing it. We have passed a bill here in the Senate, and the chairman of the House committee has committed that the House committee will do it, and then we will finish it together.

But this is an opportunity. This is the downpayment. This is not going to be the only action that is going to be taken by us in our continued march toward progress in terms of the education and hope for young people. Not all the problems are going to be resolved. Not all the problems are going to be solved. This is a downpayment.

When we look at the priorities of education at other times, we have to wonder why we are even having a debate on this issue--and why we are just talking about $20 billion. If you take what was expended on education, on investing in the GI bill over the period of the GI bill, it was a third of the total budget. If we spent now on education what we spent then, we would be spending 130 billion dollars--not $20 billion. Imagine that. $130 billion it would be, and we are only talking about $20 billion. We were spending at that time all of that--for what?--for educating the young people. Is there anyone in here who would say that was a mistake? Find the Members of the Congress or the Senate who said we have spent too much in terms of investing in the education of the children in our country.

The ACTING PRESIDENT pro tempore. The Senator has 3 minutes remaining.

Mr. KENNEDY. Find me that person. I remember being on the floor of the Senate when we had strong voices in opposition to the Pell grants, to Stafford loans back in the early 1960s. I do not hear those voices today. I do not hear those voices today. Why? Because we know when it is done well, and it is done right--and it has not always been, but in this case it is, in terms of the Pell grants, in terms of the loan forgiveness, in terms of some help and assistance and relief for middle-class families--it will make an important difference.

When we hear the eloquence of some of our colleagues and about the difference it has made for their education--whether it is DICK DURBIN, whether it is MARIA CANTWELL, who talks about the difference it has made in her family, whether it is PATTY MURRAY, who said all seven members of her family had help and assistance in terms of student loans, and all of those people are professional people today, paying taxes, repaying whatever those kinds of loans are.

Let's think about what this issue is about. This is about hope. This is about our future. This is about progress in America.

Finally, this is the kind of investment we need if we are going to deal with the challenges and problems of global competition. We will have a chance to go into this in greater detail after the vote this morning, but we need these kinds of investments, and the kind of investments we have in the reauthorization bill in terms of teachers and the kinds of investments we had in the COMPETE Act that was passed in a bipartisan way earlier this year. We need this in order to stay competitive in the global economy, to make sure America's economy is the strongest. We need this investment in terms of our national security to make sure we are going to have the men and women who are going to be able to defend this Nation and use the various kinds of technologies that are developed.

Finally, we need this investment in order to have a well-trained and educated citizenry who are going to be able to breathe life into the institutions our Framers established. That is what we are talking about. We are not going to achieve all of that with this legislation, but it is going to be a meaningful and ongoing and continuing commitment, and one that all of us who are supporting this proposal recognize as something that must be followed up on and strengthened and shaped as we move forward.

Mr. President, I withhold the remainder of my time.

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Mr. KENNEDY. Mr. President, I wish to take a few moments, first, to thank all of our colleagues for the overwhelming, bipartisan support for the conference report. This exceeded the vote we had earlier on our education measures, and we also had a number of absentees today who indicated favorable support for the legislation. This is a very important statement about where we are as a country in terms of the education issue. This ought to be reassuring for the students, parents, and families of our country.

Again, I am immensely grateful to my colleague and friend, Senator Enzi. Without his strong support in the shaping of both the reauthorization legislation and this legislation, we certainly would not be here. He spoke very eloquently and well about the importance of the reauthorization. It is a viewpoint which I share for the reasons he has outlined. The simplicity of the financial aid application is key. We have 400,000 young people who are qualified for college but who do not go to college. Many do not go to college because they cannot work their way through those ten pages of an extremely complex, difficult questionnaire, and they do not have the support systems to assist them. This reauthorization will assist not only in the simplification of the FAFSA that Senator Enzi personally took a great deal of time with, as well as Senator Reed, but also with regard to teachers in underserved areas and the transparency provisions that will help parents understand the costs of various universities.

The legislation has a number of noteworthy features that the Senator outlined in his statement. With this strong vote, we want to give assurance that we look forward to working eagerly with the House to make sure we have a successful passage; doing so will maximize the impact of this legislation we just passed.

We will certainly work on the issue of college cost reduction and higher education access. And we have a number of other education issues we are working on as well. We understand the importance of the reauthorization of the Head Start Act and the provisions dealing with early education. We understand the importance of reforms of K-12, the importance of tying in kindergarten into the early grades. We understand the importance of getting well-trained teachers in underserved areas, the importance of parental involvement, the challenges out there with regard to disabled students, the challenges so many students are facing in terms of limited English-speaking capabilities, and the issues around accountability and growth models. There are a lot of complex issues, but we certainly want to wrestle with those and eventually have, as a result of working together in our committee, a seamless web of progress in the education systems in our country. That is certainly our intention. We are well down the road with the actions that have been taken today.

I wish to mention a few of these items we have in the legislation. Before I do, I wish to personally mention the individuals who worked long and hard on this measure. I failed to do it during the earlier presentation when we were under more limited time, but, as I think Senator Enzi knows very well, we have been blessed with an extraordinary group of individuals who work long and hard. Much of the legislation--the authorization and also the general format of a good deal of what we have done today--has been in the works for a number of years. It did not just happen this year. The authorization legislation we passed basically had the name of Senator Enzi on it before the changes that took place in the elections. We have been working very hard. We have been enormously blessed by an extraordinary group of men and women who have worked with us. These are complex, difficult issues with incredible implications.

We have on our Education Committee a membership that is very involved and engaged on education issues. All of them have ideas. One of the things that makes that committee so interesting is that we have an enormous number of ideas and suggestions, and it has taken a good deal of time to try to work with our colleagues on both sides of the aisle and then with the House. That was achieved.

I will certainly mention some of those who have done such an extraordinary job, and we are very much in their debt. Obviously, we are all honored to serve as Members of this institution, but those who have worked on this legislation should take a great deal of satisfaction in the difference they have made though shaping this legislation, because they have played an indispensable role, and we value very much their continued contribution.

On my staff I would like to thank Michael Myers, who has been the chief of staff of our HELP Committee, Carey Parker, a longtime friend and legislative assistant, Carmel Martin, Missy Rohrbach, Erin Renner, and J.D. LaRock. We have Emma Vadehra, Nick Bath, David Johns, Raquel Alvarenga, Liz Maher, Lily Clark, Jennifer Fay, Ches Garrison, Scott Fay, Melissa Wagoner, Dave Ryan, and Jay McCarthy.

This has been a bipartisan process all the way. I would also like to thank Senator Enzi's wonderful staff, specifically Katherine McGuire, Ilyse Schuman, Greg Dean, Beth Buehlmann, Ann Clough, Adam Briddell, Amy Shank, and Kelly Hastings.

I also thank MaryEllen McGuire, Taneisha Woods, and Jeremy Sharp of Senator Dodd's staff; Rob Barron, Ellen Murray, and Mark Laisch of Senator Harkin's staff; Robin Juliano and Chris Fick of Senator Mikulski's staff; Michael Yudin of Senator Bingaman's staff; Kathryn Young of Senator Murray's staff; Seth Gerson of Senator Reed's staff; Mildred Otero and LaToya Johnson of Senator Clinton's staff; Steve Robinson of Senator Obama's staff; Huck Gutman of Senator Sander's staff; and Will Jawando of Senator Brown's staff.

I would also like to thank Senator Reid's staff, Randy DeValk, Gary Myrick, and Jason Unger, and his outstanding floor staff without whom none of us could do our jobs, Marty Paone, Lula Davis, Tim Mitchell, and Trisha Engle.

I thank especially Senator Conrad and his staff. Without them, there is no way we could have completed this bill. So thank you, Mary Naylor, Joan Huffer, Lisa Konwinski, and Robin Hiestand.

And I would like to thank Liz Engel of the Democratic Policy Committee.

I would also like to thank David Cleary of Senator Alexander's staff; Allison Dembeck of Senator Gregg's staff; Celia Sims of Senator Burr's staff; Glee Smith of Senator Isakson's staff; Karen McCarthy of Senator Murkowski's staff; Juliann Andreen of Senator Hatch's staff; Suzanne Singleterry of Senator Allard's staff; Alison Anway of Senator Roberts' staff; and Matt Blackburn of Senator Coburn's staff, all of whom put in many hours to make this bill a reality.

As always, we worked closely with Chairman Miller's staff, and I would like to thank them as well. Mark Zuckerman, Alex Nock, Gaby Gomez, Julie Radocchia, Jeff Appel, and Stephanie Moore all worked tremendously hard, and Chairman Miller is lucky to have them.

I would also like to thank the Parliamentarian, Alan Frumin, and Assistant Parliamentarians Elizabeth MacDonough, Peter Robinson, and Leigh Hildebrand for their assistance throughout the process.

More than most, this bill has required significant help and assistance from the Congressional Budget Office, and I would like to give them a special thanks. Paul Cullinan, Deborah Kalcevic, and Justin Humphrey have put in tremendous work--nights and weekends and everything in between--to model and estimate the budgetary effects of the complex provisions in this bill, and all the many iterations and changes that the committee considered. I don't know what we would do without them. We certainly wouldn't have been able to move this legislation as expeditiously as we did.

I would also like to thank Mark Koster, Kristin Romero, and Amy Gaynor in the Senate Legislative Counsel's Office, as well as Steve Cope and Molly Lothamer in the House Legislative Counsel's Office, who also worked nights and weekends to assist in drafting the language and working out technical issues in the bill.

Finally, I would like to thank members of the education team at the Congressional Research Service--Adam Stoll, Charmaine Mercer, Jeff Kuenzi, and Dave Smole, whose expertise was invaluable throughout this process.

I wish to take a few moments to highlight briefly, once again, in greater detail, what the conference report will do. I outlined in the earlier presentation the highlights and the reasons for the legislation, but for a few minutes I wish to once again remind those who are interested in the benefits the legislation provides for all the borrowers.

It is a historic increase in the need-based grant aid--the greatest increase since the GI bill. That helps the neediest students. We talked earlier about how we should set as a goal not to let a single qualified student lose the opportunity to get a college education because of cost. We still have a long way to go. We recognized earlier in the debate that the cost of college has gone up extraordinarily. But at the same time, grant assistance has basically stabilized or gone down in real terms, and the earning power of the middle class has been level or has fallen slightly over the period of recent years.

So in this legislation we have tried to provide real assistance on the issue of burden in the percentage of repayment. We have done, I think, a first-rate job in setting better repayment options that cap a borrower's monthly payment at 15 percent of their monthly discretionary income. We have included loan forgiveness for borrowers in public service jobs, and protection for working students by not penalizing their earnings. So many of these students go out and work, and work hard, to earn a little money, and yet then they are outside the eligibility to benefit from some of important grants in terms of assistance. So we have addressed that issue. And we have provided matching grants to States to improve college access.

We cut interest rates--I was referring to that earlier--on new undergraduate subsidized loans from 6.8 to 3.4 percent by 2011.

We provide for scholarships of $4,000 per year for high-achieving students who commit to teaching high-need subjects in high-need schools. We didn't emphasize or stress that during the early presentation. This is one of the great and important provisions in this legislation. I think we all understand we need a well-trained teacher in every classroom in America, and we need well-trained teachers in particular in inner-city schools and also in rural and underserved communities. We need them to have the skills to serve, so we provide some important assistance to that end.

Senator Enzi mentioned in the reauthorization that we provide other kinds of incentives for schools and colleges to also move in that direction.

We support the Historic Black Colleges and other minority-serving institutions, such as Hispanic serving institutions and tribal colleges and universities. We increase funding for the Upward Bound Program to provide tutoring and other support to help disadvantaged students prepare for, apply to, and succeed in college. I will show why that measure is so important in a moment.

And we provide these benefits--all of these benefits--at no cost to the taxpayer by reforming the student loan industry so that it works for students and not the banks. That is the basic concept.

As we mentioned during the course of the earlier discussion, we provide loan forgiveness to graduates in public service. This chart mentions the various professions in which individuals can be involved to gain that kind of opportunity. They can be in public safety, law enforcement, public education, early childhood education, child care, public health--with all the Public Health Service agencies; or they can be working with special needs children and the disabled community, which is enormously important; the elderly, and the frail elderly--increasingly a challenge for our country; public interest law--these are all the public defenders and legal services attorneys, as well as prosecutors; public libraries; nonprofit organizations; or teaching full time at a tribal college or university.

I mentioned earlier the article in Time magazine this week that talks about the attitudes of students in colleges all over this country, and that it is the desire of so many of these young people to be involved in public service and to help respond to the needs in their communities. They want to be part of the solution, not part of the problem. So often, because of their indebtedness, they have to choose careers in order to deal with the indebtedness. So this legislation will open up or help us take advantage of that idealism that is out there. We are giving them a pathway to making a difference in terms of the future of our country, and I think that is enormously important. That is one of the most important parts of this legislation. We have tried to work on it, and I think it will be very important.

I might give a quick example of how the loan forgiveness works. A starting teacher in my State, making a salary of $35,400, has an average debt of about $18,100. Under the loan forgiveness plan, where he or she would not pay more than 15 percent of their disposable income, they will save $730. If they continue to work as a public educator, more than half of their indebtedness will be forgiven after the required period of their service.

If you take a similar situation, this is a police sergeant with a child in Arkansas, making an annual salary of $28,200, with a debt of $17,000. This will help save him or her $1,100 a year in terms of repayment. At the end, if he or she stays in law enforcement for ten years, $14,800 of the $17,000 debt will be forgiven. $14,800 of the $17,000 debt if they stay working in law enforcement.

So this gives you a good illustration about the loan forgiveness.

As was mentioned earlier, the higher education reauthorization bill, which Senator Enzi referred to, addresses rising costs by requiring colleges to publicize college cost information. This is a real problem. Parents have a difficult time understanding what the real costs are. There are fees and more fees--tuition, room and board. I was absolutely startled when the daughter of a very good friend of mine, attending one of our finest colleges, indicated to me the cost of the schoolbooks for going on to college--over $100 for a freshman schoolbook in a rather general subject matter. These are surprises that you are faced with; the several hundred dollars additionally that people are unaware of.

I know some of our colleagues have talked about this and we are certainly aware of this challenge and so we are going to try to see what we can do to help provide some assistance there.

Reforms to the student loan system will ensure that colleges are recommending lenders based on the best interest of their students. Those are the ethical provisions we have added as a result of the investigations received broad support in this from the colleges and universities. Many of them were stunned by what has been happening, and they have been enormously cooperative and helpful.

And I want to talk about simplifying the financial aid form. I give great credit to Senator Enzi and Senator Reed on this. They have simplified this form from an enormously complicated ten pages of questions to just two pages of essential questions. That will make a big difference.

This strengthens GEAR-UP and TRIO to improve preparation for higher education. The record of these programs has been extraordinary in terms of providing the bridge for many of those who come from disadvantaged backgrounds to get them started into college, and in terms of giving them the assistance and the followup so they will need complete their higher education.

Then, also, the reauthorization reforms and improves our teacher preparation programs. Teachers are the backbones of our schools, and the bill will promote high-quality teacher preparation programs, and recruit good teachers to teach in high-need schools--where they are needed most.

So those are some of the essential elements in the reauthorization.

As we said earlier, we are investing more here in the Pell grant. Here, I have the chart of what has happened in terms of the failure to increase the Pell grant to keep up with the cost of college. This demonstrates where we are going with one very important aspect, and that is the assistance in the Pell program. It has remained flat in the past. You can look from 2002 all the way to 2006, and now we will go to $5,400 by 2012.

There has been talk that there had been some increase in Pell, all of which is true, but that was because there was an increasing number of poor students who were eligible for the Pell grant. We have nearly 5 million more people living in poverty today than in 2000. So we put more money into Pell to cover more students, but that did not keep up with the growth needs for the grant amount. The point being, this is a very important increase in terms of the cost. As the Chair, Senator Brown, pointed out, an increase in the cost of universities, a failure to provide an increase in grants, and the leveling of salaries of people have made it very difficult for many to pay for college.

In my full statement, I point out in a more dramatic form, what is happening in terms of the need for many of these students and that what we are seeing currently in our education system is the increasing divide of America. I think all of us believe, or should believe, that if we are going to be one country, with one history and one destiny, we don't want education adding to the separation of a divided nation. It ought to be bringing the country together--based upon ability, based upon hard work and enterprise and a willingness to work and to achieve and accomplish. What we have found in our education system now, for a number of reasons, though unintended, it is working to divide the country. It should not be. That is a very important issue that we have tried to address in a number of different ways in this legislation. I believe it is very important to do so. We have not emphasized it, stressed it that much in our earlier comments, but it is an underlying commitment we have.

In my more complete statement, I have reviewed the different ways we tried to do this. We are going to continue to work at it.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

As I said when we began our debate this morning, our Nation has always looked to education as the pathway to progress and prosperity. After John Adams recognized education as a fundamental right in the Massachusetts constitution, we embraced this view in my home state by creating the first college and first public school in the nation. A few decades later, legendary reformers such as Horace Mann, first recognized that public schools would be the ``great equalizer'' that delivers opportunity for all to fulfill their potential.

At the height of the Civil War, Abraham Lincoln signed the legislation creating the land-grant colleges and made a commitment on behalf of the nation to the education of the children of our country. During the Industrial Revolution, we rose to the challenge once again. We established free public schools. At the turn of the last century, we founded public high schools to enable the nation to move forward. And after the Second World War, we passed the GI Bill to enable those who served in war to rebuild their lives at home. For every dollar we invested, the Greatest Generation returned $7 for our economic growth.

The landmark success of the GI Bill shows us what a difference higher education makes. The bill granted World War II veterans up to $500 each term--the equivalent of $5,600 today. It swung the gates to college wide open--and half of all veterans went through those gates determined to create a new life for themselves and their families. More than five million veterans received vocational education or job training, and more than two million attended college.

In 1940, the average GI was just 26 years old and had attended only one year of high school. The bill even enabled many of these GIs, who had served the country so magnificently, to become professionals. In 1957, we were called to action once again. The Soviet Union began a new Space Age with the launch of Sputnik. We rose to the challenge by passing the National Defense Education Act, and by inspiring the nation to land on the moon. We doubled the Federal investment in education.

Today, we need a similar bold new commitment to enable the current generation of Americans to rise to the global challenges we face. The Higher Education Conference Report we consider today makes that commitment. Today, we'll help millions of students achieve the American dream by providing $20 billion in new college aid--the biggest increase in student aid since the GI Bill.

Just a few weeks ago, the Senate overwhelmingly voted to approve this bill. Let's look at what the Senate bill did:

It provided a historic increase in need-based grant aid, by raising the maximum Pell Grant by almost $1,100 over the next 5 years, to $5,400 from $4,310 today.

It provided new student loan repayment options that allow borrowers to cap their loan payments at 15 percent of their monthly discretionary income.

It offered loan forgiveness to borrowers who work for 10 years in a variety of public service jobs. This includes public school teachers, law enforcement and emergency management professionals, social workers, librarians, prosecutors and public defenders, public health doctors and nurses, and child care workers.

It protected working students by not penalizing their earnings, by raising the ``income protection allowance'' from $3,000 to $6,000 for dependent students, and increasing it by 50 percent for independent students.

It initiated a new program that provides matching grants to states so they can provide more college access activities to students.

Our Senate bill provided all these benefits at no cost to the taxpayer--by cutting the outrageous subsidies the government gives to lenders. We gave that money to the students, where it belongs. The Conference Report we consider today maintains all these benefits to students. But it does even more for students. In addition to the benefits I've just described, the College Cost Reduction and Access Act:

Cuts interest rates on new subsidized Stafford loans for undergraduates from 6.8 percent to 3.4 percent by 2011--a step which will help millions of students manage their student loan debt more effectively.

It provides scholarships of $4,000 per year to high-achieving college students who commit to teaching high-need subjects like math and science in high-need schools.

It provides more than $500 million to support Historically Black Colleges and Universities, Hispanic Serving Institutions, and other colleges that serve minority students.

It increases funding for the Upward Bound program by more than $200 million, which will help provide tutoring and other support services to help disadvantaged high school students prepare for, apply to, and succeed in college.

This is the bold commitment that our students and families deserve, and it couldn't come at a better time. We all know that a college education is more important than ever, but it's never been more expensive. The cost of college has tripled in the last 20 years. Yet, family incomes are not keeping up with rapidly-rising college prices. Last week, the Census Bureau released new data showing that median household income in America increased just seven-tenths of one percent last year. Meanwhile, the cost of college increased 6 percent.

In fact, over the last twenty years, the cost of college has increased more than twice as fast as median household income. Since 1986, costs have increased by 216 percent at public colleges, and 208 percent at private colleges. But median household income has gone up just 93 percent over that same time. During the same period, grant aid has not kept up pace with increasing costs.

Twenty years ago, the maximum Pell Grant covered 55 percent of costs at a public 4-year college. Today, it covers only a third of those costs. The gap between the maximum Pell grant and the cost of attendance at 4-year public colleges has increased almost $3,500 since 2001-2002. Today the gap is $8,746. For years, under Republican control of Congress, the maximum Pell Grant was stuck near $4,000. Earlier this year, Democrats increased the maximum grant to $4,310. But that's far from enough.

Increasing costs and stagnant grant aid are closing the doors to college for many middle-income and low-income students and families.

The lowest income students on average have an unmet need of $5,800. Each year, 400,000 students don't attend a 4-year college because they can't afford to do so. It's shameful that low-income students--even those who have worked hard and done well in high school--are less likely to attend and complete college than high-income students. Just one fifth of low-income eighth graders will graduate from college. But 68 percent of high-income students will do so.

That's unacceptable.

By providing the biggest increase in student aid since the passage of the G.I. Bill, our bill will help close these gaps. Of the $20 billion in college aid that our bill provides overall, $11.4 billion is allocated for additional grant aid. Our bill immediately increases the maximum Pell grant by $500 next year, to $4,800 from $4,310. By 2012, the maximum Pell Grant will increase to $5,400.

Who will be helped by this bill? It will help students like Sara, who was a first-generation college student. She graduated from Norfolk State University and earned her Master's degree with the help of the Pell Grant and other aid programs. Sara says that the Pell program helped her family know that a better day was coming for them. This bill will help students like Natalie, from Massachusetts, who's a single mother enrolled in college for the first time. She says that without Pell grants, she ``would be stuck in this way of life, with no `light' to look forward to ..... knowledge is power and education is key.'' More than 5 million students rely on the Pell grant--5 million.

This bill provides the help and assistance that millions of Americans need in order to access and afford a college education. This increase in aid is long overdue. But we cannot stop there. Students and families also need our help to manage the crushing burden of student loan debt. As the cost of college continues to rise, the crisis of student loan debt is growing worse. In 1993, fewer than half of all students took out loans to finance their education. But today, more than two-thirds of students borrow for college. Today, the average student leaves college with more than $19,000 in student debt.

This mountain of debt is distorting the basic life choices of countless Americans. It's forcing them to delay getting married, delay buying a home, and delay starting a family. It's discouraging many young people from choosing careers in fields such as teaching, social work and law enforcement--the low-paying but vital jobs that bring large benefits to our society. No student should have to mortgage their future in order to pay for higher education. That is why our bill also cuts interest rates in half--to 3.4 percent from 6.8 percent--on new subsidized Stafford Loans for undergraduates, which goes to the neediest students.

By cutting the rates in half, we reduce the interest rate on these loans to some of the lowest levels ever in the history of the federal student loan program. These reductions will provide much-needed help to the 5.5 million students who take out subsidized student loans each year. Reducing interest rates will clearly help students. Under a standard 10-year repayment plan, a borrower with $18,000 in subsidized loans will have their interest payments reduced by 35 percent, from almost $6,900 to less than $4,500. That student will save almost $2,400 in interest payments. Borrowers who consolidate their subsidized loans will save even more. For example, a borrower with $13,800 in subsidized student loan debt--the average amount--will save $4,400 over the life of their loan.

Our income-based repayment plan--which gives borrowers the option of capping their loan payments at 15 percent of their monthly discretionary income--will help save borrowers even more. And when it's combined with our public service loan forgiveness plan, the help we'll provide to students will be truly remarkable. Teachers, emergency management technicians, law enforcement professionals, public health doctors, nurses, social workers, librarians, public interest lawyers, early childhood teachers--and many others--will be eligible for loan forgiveness. Take, for example a starting teacher in Massachusetts who makes a salary of $35,421:

If that teacher graduated with the average loan debt for the State--$18,169--he or she will have a monthly payment of $209.

Under the income-based repayment plan, that monthly payment would be reduced to $148 instead--$61 less.

Over the course of the year, that teacher would pay $732 less than under the standard repayment plan.

If the teacher stays in the job for 10 years, the remaining debt would be cancelled altogether--in this case, a benefit of over $10,000. Or let's consider a starting legal services attorney, who makes $36,000 a year:

If that student graduated with the average loan debt for lawyers for the State--$51,056--he or she will have a monthly loan payment of $588.

Under the income-based repayment plan, those monthly payments would be $259--that's $329 less.

Over the course of the year, that legal aid attorney would pay $3,948 less than he or she would have paid under the standard repayment plan.

And if the legal aid lawyer stayed in the job for 10 years, the remaining debt would be cancelled--in this case, a benefit of over $50,000. Or let's consider the example of a police sergeant with a child in Arkansas, who makes $28,289 a year:

If that sergeant graduated with the average loan debt for students for the Arkansas--$17,000--he or she will have a monthly loan payment of $196.

Under the income-based repayment plan, because the sergeant is supporting a child, those monthly payments would be reduced to $97.

Over the course of the year, the sergeant would pay $1,185 less than he or she would have paid under the standard repayment plan. And if he or she stayed in law enforcement for 10 years, the remaining debt would be cancelled--in this case, a benefit of over $14,800.

Our bill pays for these valuable measures, not by increasing the burden on taxpayers, but by reducing unnecessary subsidies for lenders who take part in the federal student loan programs.

Today, thousands of lenders offer college loans. The largest, Sallie Mae, is so profitable that a group of investors recently offered to buy it for $25 billion--more than 40 percent above the value of its stock.

The lenders claim that if Congress reduces their subsidies, it won't be profitable for them to make student loans anymore, and they'll leave the business. But when Congress has reduced subsidies in the past, the lenders' profits have still gone up, not down. Here's a chart that Sallie Mae itself produced. It shows that even though Congress has reduced subsidies several times in the past, the company's profits have continued to go up and up. In 2006, Sallie Mae made $1.1 billion in overall profits. Obviously, there's still plenty of room to reduce lender subsidies further.

Lenders also claim that if we reduce their subsidies, they'll be forced to reduce the benefits they offer to borrowers on student loans. But what they don't tell you is that many of the benefits they offer are phantom benefits that few borrowers ever receive. According to an independent analysis by Finaid.org, the average borrower saves only $118 through borrower benefits offered by private lenders.

By contrast, the Pell grant increase in our bill will provide an additional $2,360 in grant aid over the next four years, which translates to $3,260 in lower loan payments. When fully phased in, the increase will provide an additional $4,360 per student, which means over $6,000 less in loan payments over the life of the loan. If lenders wanted to offer a comparable benefit, they would have to provide over 40 times the level of benefits they now provide.

Finally, lenders claim that if we cut their subsidies, small lenders will be forced out of the FFEL program, restricting borrower choice and leaving only the big banks in business. Smaller lenders have made this argument before. But when Congress has made sensible cuts in the past, the number of lenders has risen, not fallen. Right now, more than 3,500 lenders make federal student loans--the highest number ever in the history of the student loan program. Let's be clear about what smaller lenders typically do. Most of them simply sell the loans to the larger lenders, soon after the loans are made. That's why the biggest lenders hold so many loans.

Lenders will no doubt continue to complain that the cuts in this bill are too deep, but the reality is that our bill restores the balance to this grossly unfair student loan system by directing funds to the students, not to the banks. It will also encourage long-term reform of the student loan system by creating a pilot program in which an auction will be used to see what subsidies are necessary to keep banks involved in the student loan program.

For years, the federal government has used auctions to determine prices on everything from broadcast spectrum rights, timber-cutting rights, oil and gas drilling rights--even the price of infant formula delivered through the WIC program. There's no doubt we can use auctions to operate the student loan programs more efficiently. The money we save through this pilot program will be sent back to where it is needed most--to increase access to college for students through a state matching grant program.

I also want to reiterate my commitment to the Higher Education Reauthorization bill. Just a few weeks ago the Senate voted unanimously for this bill. It's critical that we complete work on it this year.

The reauthorization bill takes steps to ensure that the student loan system is working in the best interest of students, by pursuing needed ethics reforms in the student loan industry.

It simplifies the federal financial aid application and delivery process, to ensure that this complex system does not work as a barrier to access for low-income students.

It demands that colleges do their part to keep college costs down. If we do our part to provide needed student aid, they must do their part to keep their tuition and fees reasonable.

And it reforms and improves our teacher preparation system. Teachers are the backbone of our schools. The reauthorization bill promotes high-quality teacher preparation programs, and helps recruit and retain high-quality teachers in high-need schools.

The Higher Education Reauthorization bill goes hand in hand with the legislation before us today. Senator ENZI and I look forward to working with our colleagues in the House to ensure that it is also enacted before the end of this session. For many years, Congress was guided by one clear principle with respect to higher education--that no qualified student should be denied the opportunity to attend college because of the cost. I know how important that principle was for President Kennedy. My brother believed very strongly that if you work hard, study hard, and are accepted to college, you should be able to attend the college of your choice--without regard to cost. That view resonated powerfully with students and families, and it helped create the groundswell that led to the creation of the Higher Education Act of 1965.

We've lost sight of that principle in recent years, but with this bill, we will renew it once again. I'm grateful to my colleague Senator ENZI, and to all the Members of our Committee who helped shape this important legislation. Because of their able work, the Senate approved the legislation earlier this summer with a resounding bipartisan vote, and I look forward to final passage of this bill by a similar strong bipartisan majority.

I again thank all of our colleagues and staff and yield the floor.

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