Buck McKeon

Mr. McKEON

Mr. McKEON. Mr. Chairman, I move to strike the last word. Mr. Chairman, I want to commend the gentleman from Texas. He is not a member of the committee, but he has great appreciation for education, and he has put a lot of thought in this amendment, and I think it really strengthens the bill. I would be happy to accept it.

Mr. McKEON. Mr. Chairman, I rise in opposition to the gentleman's amendment. Mr. Chairman, the gentleman's heart is in the right place, he is trying to do what is right, and I think has some very good things that he is trying to do in this amendment. This is a bipartisan bill and we worked together on a lot of these areas, but it was one amendment that we were not able to accept. Mr. Chairman, we just cannot do everything with a Federal program. According to the Department of Education, more than 550,000 students were enrolled in computer science programs in the 1995-96 academic year. The current student aid program provides millions of individuals with the opportunity to pursue any field they choose as workforce demands change for different occupations. Students can choose programs as short as 6 months or as long as a Ph.D. States that have shortages in finding employees to fill technical jobs can use funds they match under the State Student Incentive Program which is currently authorized and appropriated for providing student financial aid programs targeted to those fields. Or, as a last resort, we can do it without the Federal Government. We can do a program like is being done in my district. We have a community college that joined with a city that joined with several industries and put together a program on their own to train employees. I agree wholeheartedly with the gentleman from New York (Mr. Owens) that we should not be importing employees. We should be doing a better job of training them. I think that there are just better ways to do it than in this new amendment, and I would urge a ``no'' vote on the gentleman's amendment.

Mr. McKEON. Mr. Chairman, I rise in support of the amendment. We thank the gentleman from Vermont (Mr. Sanders) for his efforts to improve the bill, and we gladly accept his amendment.

Mr. McKEON. Mr. Chairman, I rise in opposition to the gentleman's amendment. Mr. Chairman, I agree with many of the things that the gentleman from Texas (Mr. Paul) has said, and I agree that we have to be alert and vigilant in seeing how the government can impose itself in our lives, but this use of a Social Security number is not new, it has been used for identifying student loan applications since the inception of the program. I would like to make just a couple of points as to why it is important to have it. It is good to know who we are giving the money out to, especially when we want to collect on the loans. Information provided by students and families in order to receive Federal aid is based on income information which is verified against IRS records to prevent fraud and abuse in the student aid programs. I think while there are concerns about the intrusiveness of government, there are also a great many concerns as to fraud in programs. It is important that we protect against fraud and abuse in these programs. This is very important to use the Social Security number to do that. Applications are also matched with the Social Security records to make sure the person applying for aid has a valid Social Security number. I know the gentleman has made point of the fact that we put a Social Security number on death certificates. That is so that when people die, we make sure that they do not apply for student aid. I think that is an important thing to do. This check is also done to ensure that the correct person is using his or her correct Social Security number and not a fraudulent number. Social Security numbers are also used for skip tracing in tracking down the current addresses of student who are delinquent or who default on their loans so that they can be contacted to repay the debt. This practice saves taxpayers millions of dollars. I think it is incumbent upon us to be very diligent in the use of taxpayer dollars. The safeguards afforded the student loan program and the taxpayer by allowing the use of Social Security numbers should not be done away with until such time as another viable alternative exists for matching records and verifying information, which is critical to preventing fraud and abuse in the Federal student aid programs. While I agree with some of the gentleman's concerns, I think it is very important that we defeat his amendment and use the Social Security number to make this program viable.

Mr. McKEON. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Nebraska (Mr. Barrett), an important gentleman on the committee.

Mr. McKEON. Mr. Chairman, I thank the gentleman from Pennsylvania (Mr. Goodling) for yielding me this time. Mr. Chairman, I rise today in support of H.R. 6, the Higher Education Amendments of 1998. Today we are assembled to consider the reauthorization of the Higher Education Act of 1965. I want to thank my fellow members of the Committee on Education and the Workforce for the bipartisan way in which they have worked to get us to this point. I especially want to thank the gentleman from Pennsylvania (Mr. Goodling), chairman of the committee, for his support and leadership on this important legislation. Mr. Chairman, throughout the process he has kept us focused on the goal of improving our financial aid system for students and parents. Whenever a particularly difficult problem would arise he would not give up. To the contrary, he would confront it head on and forge a consensus. The gentleman from Missouri (Mr. Clay), the ranking member of the committee, and the gentleman from Michigan (Mr. Kildee), the ranking member of the subcommittee, also deserve a great deal of thanks for all of their dedication and hard work. For more than a year, we have worked closely together gathering representations from around the country to improve the way we provide support for higher education. The result is the legislation before us today. I want to begin by noting that this legislation, including the interest rate fix that is contained in it, is paid for. In fact, without the interest rate fix, H.R. 6 saves roughly $70 million in mandatory spending. However, due to the emergency nature of the interest rate problem, it became clear that an immediate fix is needed and that any fix would cost money. Under H.R. 6, the interest rate fix was paid for in a plan developed by the leadership which required half of the savings to come from the committee and the rest to be made up in offsets supplied by the Committee on the Budget. I want to personally thank Speaker Gingrich, the gentleman from Texas (Mr. Armey), the majority leader, and the gentleman from Ohio (Mr. Kasich), chairman of the Committee on the Budget for their hard work and support for making this solution possible. The legislation we are considering will be one of the most important things Congress will do for students and families this year. It will bring us closer to my goal of ensuring that every American who wants a quality education at an affordable price will be able to get it. As my colleagues know, the committee began this process with no predetermined changes in mind. We requested and received recommendations for change from individuals across the country and from more than 70 organizations representing schools, students, and other participants in our financial aid programs. We spent the better part of last year traveling around the country, holding hearings to fully understand what changes are needed to better serve our Nation's college students. We have developed this legislation through open and bipartisan discussions with the higher education community, students, parents, and our colleagues in the 105th Congress. Throughout this process, three compelling principles have guided us: making college affordable, simplifying the student aid system, and stressing academic quality for students. We have kept true to these three principles throughout the process. If we continue to do so as we move forward, the end result will be a new and improved Higher Education Act establishing quality Federal student aid policy for the years ahead. I want to focus my remarks today on a few very important areas. First, the legislation before us today will simplify the student aid system. H.R. 6 will eliminate 45 unfunded programs, including the State Postsecondary Review Entities, or SPREs, and terminate 11 studies and commissions. It will bring our student financial aid delivery system into the next century. It will create a performance-based organization within the Department of Education focused on providing quality service to students and parents. For the first time, the day-to-day management of our student aid programs will be in the hands of someone with real-world experience and financial services. This individual will be given the hiring and contracting flexibility necessary to get results and will be paid based on performance. For the first time, the Department's student financial aid systems will be run like a business, adopting the best practices from the private sector and focusing on bottom-line results. This performance- based organization will manage the Department's computer systems and ensure that the Department of Education does not waste money due to poor contract management or duplication. The chief operating officer hired to manage this organization will simplify the process of applying for financial aid for students and their families and integrate student financial aid systems to improve efficiency, save money, and prevent fraud and abuse in the programs. This bill also requires the Secretary to work with the higher education community to adopt common and open electronic data standards for important parts of the delivery system. By adopting these common standards, we can greatly simplify the student aid system by eliminating paper forms and unnecessary steps in the process. Students and their families deserve a modern student aid system that meets their needs. This legislation will give the Secretary the tools he needs to provide it. Additionally, the legislation before us rationalizes the guaranty agency system and makes important changes to the incentives we give guaranty agencies. It will change the guaranty agency financing structure to give these entities the flexibility they need if we expect them to use the largest private sector business practices, operate more efficiently, and ensure program integrity. These changes will increase guaranty agencies incentives to become more efficient in their operations by designating payments for services as the property of the guaranty agency; increase their financial risk with respect to defaults in order to encourage stronger default prevention efforts; restructure the payments made to guaranty agencies in order to maintain a strong guaranteed loan program; and, most importantly, provide real savings to the Federal Government. Some will say that we should have gone further in our restructuring initiative. These are the same individuals who would have us dismantle the guaranty agencies and turn them into contractors for the Federal Government. It is clear to me that this would be a mistake. Throughout the history of the FFEL program, guaranty agencies have played a vital role in protecting the Federal fiscal interest while ensuring that billions of dollars in private capital remained available to needy students. Given the shortfalls we have seen in the Department's contracting abilities, shortfalls which have caused unacceptable delays in the processing of student financial aid forms and a complete shutdown of the direct loan consolidation process, it is clear that the approach taken in H.R. 6 is the right one. Second, this legislation continues and strengthens those programs that have served students well, making college more affordable. One of the biggest challenges we faced during this process was saving the student loan program. As my colleagues know, the scheduled change in the interest rate for student loans jeopardized access to private capital for students. Committee members faced the challenge of finding a solution that would ensure that student loans remain available to all students and their families, while also ensuring that students receive a real reduction in their interest rates. This was no easy task. After working extensively with all parties involved, the student groups, the higher education and lending communities and Republican and Democratic members of the committee, it became clear that there was a consensus in three key areas. First, everyone agreed that tying the interest rate to a long-term instrument like the 10-year Treasury bond would not work. Second, no one had any faith that the direct loan program could provide a viable alternative in the event that private loan capital became unavailable. Third, as our subcommittee hearing on March 5 showed, the interest rates for lenders proposed by the administration were too low to ensure lender participation. In the end, we found a solution that I hope fixes the interest rate problem. The solution contained in this legislation will ensure that student loans will remain available for all students and that students will receive the lowest interest rates in 17 years. While no one may be completely happy with this solution, I believe it will ensure that every student will continue to have access to student loans at the most affordable rate possible. Finally, H.R. 6 contains provisions offered in the committee by myself and the gentleman from Delaware (Mr. Castle) that implements a number of the recommendations of the National Commission on the Cost of Higher Education. Specifically, this legislation will provide students and parents with better information to keep colleges accountable and higher education affordable by requiring the Secretary of Education to work with institutions to develop a clear set of standards for reporting college costs and prices. Under our bill, the Secretary of Education will redesign the collection of Federal base information on college costs and prices to make it more useful and timely to the public. This legislation will allow students to make more informed choices about the level of education they pursue by requiring the Secretary of Education to collect separate data on the cost and price of both undergraduate and graduate education. It will help parents and students make informed decisions about the school they choose by requiring the Secretary of Education to make available for all schools on a yearly basis information on tuition, price, and the relationship between tuition increases and increases in institutional costs. It will also allow us to keep track of any progress made in reducing tuitions by requiring the United States General Accounting Office to issue a yearly report on college cost and tuition increases. H.R. 6 will reduce the costs imposed on colleges through unnecessary or overly burdensome Federal regulation by requiring the Secretary of Education to undertake a thorough review of regulations regarding student financial assistance every 2 years and, where possible, repeal, consolidate or simplify those regulations. The Secretary will also report to Congress any recommendations he has with regard to legislative changes which would allow increased regulatory simplification. This legislation will require the General Accounting Office to report to Congress on the extent to which unnecessary costs are being imposed on colleges and universities as a result of holding them to the same Federal regulations that are applied in industrial settings. I expect colleges and universities to pass on these savings to students. H.R. 6 will stress our commitment to keeping college affordable by strengthening our support for innovative projects addressing issues of productivity, efficiency, quality improvement, and cost control at postsecondary institutions. In addition, H.R. 6 allows colleges and universities to offer voluntary early retirement incentives to tenured professors. This will allow professors, at their choosing, to receive additional retirement benefits beyond what they otherwise would have, while allowing colleges to approve their academic programs while reducing costs. I urge my colleagues to support these provisions as well. Mr. Chairman, ensuring that a quality postsecondary education remains affordable is one of the most important things we can do for our children and for American families everywhere. If we are truly interested in making sure that all Americans can afford a quality postsecondary education and if we are truly interested in reducing the debt burden placed on our students, then the single most important thing we can do is to get colleges to lower their prices. These provisions will be a needed first step in that direction. Once again, I want to thank my colleagues for the bipartisan way in which we have been able to work, and I look forward to our continued efforts to improve the Nation's higher education programs. I urge my colleagues to support H.R. 6 and to vote yes on final passage. Mr. Chairman, I reserve the balance of my time.

Mr. McKEON. Mr. Speaker, I thank the gentleman for yielding me this time. I rise in strong support of this rule and the bill H.R. 6, the Higher Education Amendments. First I would like to thank the gentleman from New York (Mr. Solomon), chairman of the Committee on Rules, for his help in crafting this rule. Through his efforts and those on the committee, we have been able to bring this bill to the floor in a timely and expeditious manner. He definitely will be missed when he retires. This rule will govern floor consideration of H.R. 6, which is one of the most important education bills that this Congress will consider this year. As many of my colleagues know, we are facing a July 1 deadline that creates a crisis in the student loan program. H.R. 6 contains a bipartisan compromise that fixes the problem, maintains the viability of the private loan program, and provides students with the lowest interest rate in 17 years. So through the swift adoption of this rule and passage of H.R. 6, we will move one step closer to meeting that deadline. Therefore, I urge all of my colleagues to support the rule and vote in favor of H.R. 6, the Higher Education Amendments of 1998.

Mr. McKEON. Mr. Chairman, it has been an interesting process and it is good to be together on this part of it as we are moving this far along on the issue. And it has been a real pleasure working with the gentleman from Tennessee. I want to thank the gentleman for his efforts to find the most efficient index for student loan interest rates. I think it is clear to everyone that indexing interest rates for these loans to the 10- or 20- year bond rate just does not work. I believe we need to ensure access to loans while reducing interest rates to students basing those loans on the most efficient index. As we move towards conference, I am committed to working towards the inclusion of the most efficient index and examining commercial paper within that context as part of the conference report.

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

Mr. McKEON. Mr. Chairman, currently a student must begin repayment of his or her student loan six months after he or she ceases to take classes on at least a half-time basis. But a college student serving as a reservist may be called to active duty for more than six months, forcing him or her to begin repayment. Mr. Chairman, it does not seem fair that a student called to serve his or her country should be forced to begin repayment, especially when they did not leave school by choice. This goes against the whole purpose of the repayment and of the six-month grace period. The amendment which I offer, along with the gentleman from Wisconsin (Mr. Klug) would allow those student reservists to forgo prepayment while serving on active duty. I urge all Members to support this amendment.

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

Mr. McKEON. Mr. Chairman, I want to thank the gentleman for presenting his amendment, and withdrawing it, and we will continue to work on that issue.

Mr. McKEON. Mr. Chairman, if the gentleman will yield, I would be happy to discuss this just shortly with the gentleman from New Jersey. I wish we had the wisdom of Solomon.

Mr. McKEON. Yes, that is exactly who I was speaking about. Mr. Chairman, I wish I could say this is a perfect number, but we talk about banks and we talk about lending institutions, and each of them has a different profit margin. Some of them this will drive out. Some of them will be able to stay in. Some we could go to a lower number and still keep some in and drive some out. I think what we really need to look at is where is the risk. I guess the driving pitfall for me has been we need to protect the students. My concern is, as we drive banks out of the system, the ones that will get hurt first will be the students that need the help the most. I looked at weighing the risk. If you put the risk here, if we put the number a little bit too high, the risk is that some banks will make a little bit extra profit and pay a little bit more taxes; whereas if we put the number too low and drive banks out, some of those students that rely heavily on this, that are maybe not the 18 or 19-year-old students, but there are some that come back that have been out in the workplace and now come back, they are going to community colleges or going to proprietary schools or going to night school, they really need that loan or they really need that help. They are the ones I am most concerned about in this process.

Mr. McKEON. Mr. Chairman, I gave my speech last time, and I would just like to thank the gentleman for his presentation and for withdrawing his amendment.

Mr. McKEON. My colleague heard me. I thank the gentleman for withdrawing the amendment.

Mr. McKEON. Mr. Chairman, I appreciate the opportunity to engage in this colloquy, and I was thinking back many months ago when the gentleman from Tennessee (Mr. Gordon) and the gentleman from Michigan (Mr. Kildee) and I drew many of these people together to begin the process on this. Does the gentleman remember that meeting?

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

Mr. McKEON. Mr. Chairman, I want to thank the gentleman again for his amendment. We have been working hard to avoid a disaster, and I am hopeful that our bill will be passed and signed into law before we hit the wall. But I think this makes good sense to make sure that in the event that there is a disaster, we do have this money there available for these lenders of last resort. So I am happy to support the amendment.

Mr. McKEON. Mr. Chairman, I want to thank the gentleman from New Jersey, Mr. Andrews, for this amendment. I think it does strengthen the bill, as others do, and I would be happy to support it.

Mr. McKEON. Mr. Chairman, I move to strike the requisite number of words. I want to commend the gentleman from New York (Mr. Lazio), classmate, subcommittee chairman on another committee, for a well thought out and good amendment. I want to support his amendment. This program was patterned after the loan forgiveness for teachers already included in H.R. 6. Students cannot receive loan forgiveness until after they have completed their second year of employment, at which time 20 percent of their loans may be forgiven, 20 percent after the third year, and 30 percent after the fourth and fifth years of employment, which guarantees that people will continue to work in the program for a period of time, which is very beneficial. Loan forgiveness programs structured in this manner serve as good incentives to attract and retain qualified teachers, especially in low paying professions or areas. I urge a ``yes'' vote on the amendment.

Mr. McKEON. Mr. Chairman, I move to strike the last word. Again, the gentleman from Maine (Mr. Allen) is not a member of the committee, but has added a good, thoughtful amendment, and I would support that amendment.

Mr. McKEON. Mr. Chairman, I move to strike the requisite number of words. I want to congratulate the gentlewoman from New York (Mrs. Kelly) for her amendment. It is very commendable to want to provide assistance to the sons and daughters of public safety officers who died as a result of the performance of their official duties. The awards made under this program will be need-based, so the money will be going to a student who has financial need as determined under the Higher Education Act. I would support this amendment.

Mr. McKEON. Mr. Chairman, I know the gentleman from Wisconsin has worked very hard for many years in efforts to improve the student loan program. I commend him for his effort on his amendment. In fact, I agree with its general thrust. The gentleman is correct that up to now we have tried to figure out how much to pay the lenders for providing student loans in a political negotiation and we in Congress really have no way of knowing what the right price is. It would be much better if we had market process to determine that. I am interested in working in that direction. That is why we have a provision in the bill to study this whole issue. In fact, I understand there also is interest in this subject in the other body, and it could even come up in the conference on this bill. However, I believe that the gentleman's amendment is simply too much, too fast. It was not offered in committee, and we simply are not ready at this point to adopt one particular full-blown market process from among the many alternatives in the manner the gentleman's amendment provides. Therefore, I would urge the gentleman to withdraw his amendment, and I will be happy to work with him to move toward incorporating a market mechanism in this program in the future.

Buck McKeon

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