Rob Andrews

Mr. ANDREWS

Mr. ANDREWS. Mr. Chairman, I offer an amendment.

Mr. ANDREWS. Mr. Chairman, I thank the gentleman for his cooperation.

Mr. ANDREWS. Mr. Chairman, this amendment is an important priority of the Department of Education and the administration, and I believe all of us on both sides of the aisle want to clarify the status of the Lender of Last Resort program. I would like to first of all thank the gentleman from Pennsylvania (Mr. Goodling), the chairman of the committee, and the gentleman from California (Mr. McKeon) and their staffs for their cooperation, and of course the gentleman from Missouri (Mr. Clay), and the gentleman from Michigan (Mr. Kildee) and their staffs for their cooperation. The purpose of this amendment is to make it clear that under the law, when a student is unable to secure a bank-based loan or does not attend a direct lending institution, that that student has the right under law and under this bill to go to a guarantee agency or other credit facilitators named in the bill as a lender of last resort. Put simply, this is the safety net when all of the other mechanisms fail to students not at a direct lending school. If there is a problem obtaining a bank loan, this is the safety net that assures that man or woman that a student loan is available under the terms and conditions of this law. It is my understanding that both sides of the aisle are in accord with this objective, and I would be happy to yield to the gentleman from California (Mr. McKeon), the subcommittee chairman at this time.

Mr. ANDREWS. Mr. Chairman, I offer an amendment No. 15.

Mr. ANDREWS. Mr. Chairman, I would like to thank my friend from Pennsylvania for his support. I also wanted to make special note of the cosponsorship of the gentleman from Wisconsin (Mr. Petri) of this amendment and thank him for his help on it.

Mr. ANDREWS. Mr. Chairman, will the gentleman yield?

Mr. ANDREWS. Mr. Chairman, I thank the gentleman.

Mr. ANDREWS. Mr. Chairman, the purpose of this amendment is to help deal with the very real problem of people who graduate from school with a significant student loan debt. I think we widely agree that the best solution is to try to find a way to moderate the cost of higher education. I think there are many things we have in this bill that begin to do that. The second best solution is more scholarship aid so more people are able to earn and win scholarships, whether based on merit or need. We are still faced with the reality, though, that many students are required to borrow in order to finance their education. I believe that it is therefore imperative that we try to find ways that make that borrowing easier for students and their families to deal with. One such way is to encourage the use of income-contingent or income- sensitive loans. In short, this concept means that one's obligation to pay one's loan back is based in large part upon their income, upon their ability to pay. So the less one makes, the less of an obligation one has to pay, but as their income rises, so does their obligation to pay. This is the first of 2 amendments I am going to offer on this subject. This one makes it clear that whether students are under the direct loan program or the bank-based guarantee loan program, they are fully aware of their right to have all of their loans consolidated into the Department of Education and then converted through the income- sensitive option. What this means is that a young man or a young woman who graduates with a significant debt, with a $20,000 or $30,000 or $40,000 debt, who chooses to go into a job or profession, or must go into a job or profession that earns a lower salary will have the opportunity to make that choice, will not be compelled to choose between pursuing the highest and best education they can get or accepting a job that they do not wish to pursue. I think this is a sensible amendment. I believe it will encourage people to borrow prudently, but give them an opportunity to repay their loan on a fair and reasonable basis. It is a way to deal with the burgeoning problem of too much debt upon graduation. Mr. Chairman, I yield to my friend, the gentleman from New Jersey (Mr. Pascrell), who has proposed legislation that is very similar in concept to this. He accomplishes this goal by extending the period of time that people can pay back their loans, and I believe it is very much in sync with this idea.

Mr. ANDREWS. Mr. Chairman, I offer an amendment numbered 16.

Mr. ANDREWS. I yield to the gentlewoman from Texas.

Mr. ANDREWS. Mr. Chairman, I move to strike the requisite number of words. I also rise in support of the amendment offered by the gentleman from New York (Mr. Lazio), the gentleman from New York (Mr. Gilman) and the gentlewoman from California (Mrs. Tauscher). I think it is important that we understand how much of a sacrifice people make when they go to work in the child care field. The gentleman from New York (Mr. Lazio) and the gentlewoman from California (Mrs. Tauscher) have spoken very clearly and eloquently about that, but I think there are some numbers that were in the newspaper, in the New York Times today, which dramatically illustrate the economic priority we put on taking care of our children as opposed to the rhetoric that we talk about taking care of our children. There was a study done which indicates that the median hourly wage of animal caretakers, people who take care of our pets, is $6.90 an hour; the median hourly wage of parking lot attendants, people who watch our cars, is $6.38 an hour; and the median wage of child care workers, who care for and watch our children, was $6.12 an hour. So we literally pay people more to watch our pets and our cars than we do our children. One of the ways that we begin to redress that grievance, and it is a grievance, is this proposal which suggests that a limited number of child care workers will be able to finance their education by working in quality, affordable child care. This is an example, and I know that both the gentlewoman from California (Mrs. Tauscher) and the gentleman from New York (Mr. Lazio) are the parents of young children, as am I, so they know this issue very personally. It is an example of how the two sides of the aisle can come together on a very practical idea. I commend the authors and heartily support the amendment.

Mr. ANDREWS. Reclaiming my time, I again understand that this is designed to keep the same level playing field we have always had on that basis, and with that reservation, I will be happy to support the amendment of the gentleman.

Mr. ANDREWS. I yield to the gentleman from Maine.

Mr. ANDREWS. Mr. Chairman, I move to strike the requisite number of words. I rise in support of the amendment of the gentleman from Maine. I would like to make a couple comments about it. First of all, I thank him for his modification. I think it is very important that we continue the custom and tradition in this bill of treating all schools on a level playing field, not singling out any category of higher education for special favored or disfavored treatment. I think the gentleman has remained consistent with that tradition by making the modification to this amendment. I appreciate that. I would like to point out one concern that I have, for the Record, which I would hope that we would address at conference with the gentleman's participation, and that is clearing up any ambiguity about the definition of the word ``person'' in what is subparagraph 6 of his amendment, where it says, ``Any person required to pay, on behalf of a student or borrower, a refund shall, in addition to other penalties provided by law, be liable to the Secretary for the amount of the refund not paid.'' I think it is very important that we be clear as to who the person is, for the following reasons: If the institution that is on the hook for this is a community college, let us say we want to be very clear that the comptroller of the community college will not be personally liable for this obligation unless he or she committed some kind of crime. I am sure that is not the intent of the gentleman. The same would be true of a for-profit school if an individual is not financially involved, but the corporation for which the individual is. And I would hope that we would have the cooperation of the gentleman in resolving those matters as we proceed.

Mr. ANDREWS. If the gentleman will continue to yield, Mr. Chairman, I would like to commend my coauthor of this amendment. I also commend the subcommittee chairman and ranking member for their willingness to work together with us on this. I believe that the right answer to this conundrum, as to whether it is too much or too little, is to turn to the marketplace and let the marketplace answer that question for us.

Mr. ANDREWS. Mr. Chairman, I thank the gentleman; and I was proud to coauthor this amendment with my friend from Wisconsin, who I would like to acknowledge as, I think, the most knowledgeable person in the House on the issue of student loans. I am also pleased that the subcommittee chairman and the ranking member have agreed they will continue to discuss with us and negotiate with us this issue beyond conference and up through conference. I happen to think that the debate of the last number of months proves the validity of the underlying idea here. Some of us believe that the subsidy of the guaranteed student loan program is too high. Others believe it is too low. I think that what this amendment says is that it is not a judgment that we should make in this body as to whether the subsidy rate is too high or too low. Instead, we should turn to the marketplace and let interested lenders step forward and bid for the right to receive these government guaranteed franchises. This is not a new idea. It is an idea that, frankly, works in the FHA mortgage context in much larger quantities of dollars with great success.

Mr. ANDREWS. Mr. Chairman, will the gentleman yield?

Mr. ANDREWS. Mr. Chairman, I would like to thank the ranking member for yielding this time to me, and I rise in support of the manager's amendment. I would like to thank the chairman and the subcommittee chairman and the ranking members for their cooperation in solving what I believe is a significant problem with respect to the age discrimination law by including in the manager's amendment an excellent provision which will permit institutions around the country to offer early retirement incentive packages to members of the faculty at those universities. I think this is an excellent piece of legislation that accomplishes three important objectives. First of all, it is very fair and balanced and treats the members of the faculty in a very fair and evenhanded way. It is very important to note that everyone under this plan will receive full health benefits, and it is purely voluntary with respect to participation. Second, this is an important cost-saving mechanism for universities and institutions around the country. I believe it is a very solid first step toward the goal of the gentleman from California (Mr. McKeon) of trying to make college more affordable by addressing the issue of college cost inflation. Third, I believe that this is an important mechanism for the recruitment of new young faculty. Particularly, I believe this will open the tenure track to many women and minority faculty who have not had the opportunity to advance up through the ranks in prior years. In summation, Mr. Chairman, I would like to thank those who have worked with us on making this provision a reality, and I urge support of this amendment in its entirety.

Mr. ANDREWS. Mr. Chairman, I thank my friend from Michigan for yielding me this time, and I again want to say to the gentleman from Pennsylvania (Mr. Goodling) and the gentleman from California (Mr. McKeon), our chair people, and to the gentleman from Missouri (Mr. Clay) and the gentleman from Michigan (Mr. Kildee), our ranking members, that I am proud to be associated with their accomplishment that they have worked so hard on. This bill is the second installment in a two-part process that began last year to make higher education more affordable for more Americans. Last year, as part of the historic balanced budget agreement, this Congress gave people a tax cut to help people pay for college tuition. This Congress made it easier for people to save some money in IRA-type accounts for college and career school tuition. We finish that job or continue that job with this bill. This bill dramatically increases Pell Grants to a level of about $4,500 at the beginning. This bill makes more loans more affordable to more students and, in response to legislation I have introduced, makes those loans more affordable and more repayable. This bill expands work study programs and makes it more fair and reasonable as to how we calculate what a family must contribute to the education of a person in that family. What is most important about this bill, however, is why it does what it does. This bill is about honoring a commitment to the people of this country that says if they are willing to work hard and make sacrifices that they can go as high and as far as their ability and desire will take them. I am proud, Mr. Chairman, to stand before you tonight as the son of a father who did not graduate from high school, as the son of a mother who graduated from high school but had no further opportunities. Education has been very important in our family. My father-in-law was a lifelong career educator, my mother-in-law is someone who cares deeply about education, and I am just so proud to be a part of an effort that says to all of America's children and all of America's adults that the promise of a higher education is much closer to being a reality once we enact this legislation. I urge my colleagues to support it.

Mr. ANDREWS. Mr. Speaker, I thank the gentleman from Ohio (Mr. Hall) for yielding me this time. Mr. Speaker, I rise in support of the rule, and at a time when the people who cover politics are obsessed with what is scandalous and divisive, we have before us tonight something that is solid and unifying. Mr. Speaker, I want to commend the leaders of our committee, the gentleman from Pennsylvania (Chairman Goodling), the gentleman from California (Chairman McKeon), the gentleman from Missouri (Mr. Clay) and the gentleman from Michigan (Mr. Kildee) for all the time and effort they have put into this bill and all the very fine work that they have done. I also want to commend the Committee on Rules for putting before us a rule that lets anyone with any idea have the right to come to the floor and express his or her idea. That is why I support the rule. Mr. Speaker, I do want to associate myself, however, with the remarks of the gentleman from South Carolina (Mr. Spratt), the ranking Democratic member of the Committee on the Budget, with respect to the cost and payment mechanism for the interest rate compromise that has been referred to earlier. First of all, we do not really know what the cost is. We have an estimate from the Office of Management and Budget that tells us it will be net in excess of $2 billion. We have another estimate from the Congressional Budget Office which tells us that even with the offsets that have been identified, it is in the neighborhood of half a billion dollars. It is a very serious consideration that we are moving forward on this bill without identifying where the money is going to come from. It is sort of the-check-is-in-the-mail theory of budgeting that got us into this mess in the first place. I agree with those who say that we should move forward this evening, and I will vote with them to do so. But I also want to sound a note of caution that as we move this bill out of the House of Representatives and into the conference committee, I think it is imperative that we lay before the Members of this body and our constituents, the American people, the specifics of how much this compromise will cost the taxpayers and where the money is going to come from to pay for it. I believe it would be a disaster to fatten the profits of the banking industry at the expense of other student aid programs or other mandatory programs. We should be watching that as the time goes on.

Mr. ANDREWS. Mr. Chairman, reclaiming my time, I yield to the gentleman from California (Mr. McKeon), the chairman of the subcommittee on this issue.

Mr. ANDREWS. I appreciate the gentleman's indulgence. Mr. Chairman, I ask unanimous consent to withdraw the amendment.

Mr. ANDREWS. Would the gentleman like to accept the amendment?

Mr. ANDREWS. Mr. Chairman, there is an issue here as to the interest rate that students pay when they consolidate their loans, when they consolidate their direct loans in this case. The question is whether or not the students should pay a blended rate, which is to say the rate of all of the loans that he or she is consolidating, averaged and blended in as a weighted average, or whether the students should pay the interest rate paid on newly issued direct loans. I believe that the students should pay the interest rate on newly issued direct loans. I do not believe there is a significant cost consideration here. I think that this is effectively a benefit to students in this way. If interest rates in the long term continue to moderate or even drop, as we have been fortunate to see in the last 3 or 4 years, I think students should get the benefit of that. I think if rates dropped, then students who consolidate their loan should get the same kind of benefit that homeowners get when they refinance their home mortgage. I understand that there are some issues of parity between the FFEL Program and the direct loan program. I frankly would like to see those issues resolved by giving persons who consolidate an FFEL loan the same low rate that students who consolidate direct loans get. I think this parity matter should be resolved in favor of the students rather than the lenders or the government. Having said that, I understand there are issues respecting the pay- as-you-go rules here. I also understand the desire to promote the continuing parity between the direct loan and guaranty loan programs. With the understanding that this also is an issue that is open to continued discussion among those of us in this House, the Senate, the Department of Education and the administration, it would be my intention to withdraw this amendment. Mr. Chairman, I am happy to yield to the subcommittee chairman or full committee chairman at this time.

Mr. ANDREWS. Mr. Chairman, I offer one more amendment listed as No. 12.