Deficit Reduction Act of 2005
DEFICIT REDUCTION ACT OF 2005 -- (House of Representatives - November 09, 2005)
BREAK IN TRANSCRIPT
Ms. FOXX. Mr. Speaker, I want to thank the gentlewoman from Tennessee (Mrs. Blackburn) for organizing this Special Order again and for helping us bring the facts to the people of this country.
She used a very nice word, ``myths.'' Some people could use much stronger words about the things that are being said about this Deficit Reduction Act. So I think she is being very kind. We need to set the record straight about what is being said about this bill and about what we are actually doing.
The Education and Workforce Committee was given the task to find $18.1 billion in net savings. Of that $18.1 billion, we generated $14.5 billion by making the Federal programs dealing with higher education more efficient and effective.
I did serve many years in higher education. I was a community college president, a university administrator, dealt with higher education programs, with financial aid. So I understand these programs a great deal. And let me tell the Members just in summary what we did. We are helping the students and the families of this country tremendously by what we are doing. We are going to continue to increase student financial aid as college enrollment increases. We are going to see financial aid going up through increases in loan limits and reductions in origination fees. That is going to help students and families. We are going to end the practice that allowed some lenders to collect the minimum of 9.5 percent rate of return on some student loans.
And yet the Democrats have fought these tooth and nail. They all voted against these measures. They do not want to help make access to higher education better for low- and middle-income students like we do. And that is what this is going to do. It is going to generate savings for taxpayers by eliminating waste and inefficiency, trimming subsidies paid to lenders, and place the aid programs on a stable financial foundation. We are going to put a complete and permanent end to practices that have allowed some lenders to collect the minimum 9.5 percent rate of return on some student loans. That is just simply unfair to the students who are having to borrow money.
It will also reduce student loan fees by 75 percent over 5 years. Student loan borrowers today pay up to 4 percent in loan fees and a 3 percent origination fee. We are going to reduce that origination fee to 1 percent. It also is going to expand student loan borrowing by increasing the amounts for first- and second-year college students. This is going to be a tremendous boon to those students.
It is also going to protect borrowers' credit by requiring lenders to report to all national credit bureaus to ensure students and graduates will be able to take full advantage of the good credit history they have earned through repayment of their Federal student loans. They cannot do that now, and it is a shame because they cannot build a good credit history.
We also, through this bill, improve consumer protection and awareness by eliminating unfair rules that limit options for consolidation borrowers and providing borrowers more information about their loans. We want students to be responsible. We are going to help them be responsible.
The Democrats are opposed to that. It is really mind-boggling to understand why they would oppose all these reforms that we are putting in. One would think they would want to help moderate- and low-income people get a higher education, but they keep throwing stumbling blocks up and saying we are reducing money; we are increasing the amount of money. We make it easier for the neediest students to participate in these programs by simplifying eligibility.
I know when I conducted programs with financial aid, it took a college degree to fill out the forms. So it was a real problem. We are going to improve that.
Taken as a whole, CBO estimates these reforms will save $14.5 billion over 5 years. That is money going into the pockets of the students and the families that we want to help and other taxpayers.
Spending is out of control, Mr. Speaker. We cannot afford to keep increasing Federal spending at astronomical and unreasonable rates. Contrary to what our colleagues on the other side of the aisle are purporting, we are not finding these savings on the backs of college students. We are going to help college students. These reforms will strengthen student aid programs and expand student benefits.
Everybody needs to support this bill and know that they can go home and say to students trying to get an education, We are helping you with this.
BREAK IN TRANSCRIPT
http://thomas.loc.gov