Deficit Reduction Act of 2005

DEFICIT REDUCTION ACT OF 2005

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Mr. DURBIN. Mr. President, I rise today to urge my colleagues to support Senator KENNEDY's motion to instruct conferees. The motion instructs Senate conferees to insist on preserving the Senate provisions that increase need-based financial aid in S. 1932. Forty years ago, President Johnson sought to increase accessibility to education by signing into law the Higher Education Act of 1965. In President Johnson's words, ``To thousands of young men and women, this [Act] means the path of knowledge is open to all that have the determination to walk it ..... a high school senior anywhere in this great land of ours can apply to any college or any university in any of the 50 States and not be turned away because his family is poor.''

Access to higher education has long been and remains a great American goal. The good news is that the number of students enrolling in institutions of higher education has nearly doubled over the past 35 years--from 8.5 million in 1970 to approximately 16 million in 2005. The bad news is that, despite the importance of a college education in the 21st century, so many millions of young adults never make it to college. Sadly, many fail to make it to college due to financial constraints.

Never has higher education played such a critical role in closing the gap between the haves and the have-nots. Over the course of their lifetime, college graduates earn over $1 million more than those without college degrees. Today, 6 out of every 10 jobs require some postsecondary education and training. By 2010, the number of jobs requiring advanced skills will grow at twice the rate of those requiring only basic skills.

In addition to the individual benefits of earning a college degree, investing in and producing more college-educated Americans is vital to our Nation's growth. Economists estimate that the increases in the education level of the U.S. labor force between 1915 and 1999 directly resulted in at least 23 percent of the overall growth in U.S. productivity.

Unfortunately, the cost of a college education is far out of reach for many American students and is hitting poor families the hardest--not just those from poverty-stricken areas but those who come from family farms and those who may be new immigrants. According to the College Board, the inflation-adjusted, real increase in tuition, fees, and room and board at public colleges over the last 5 years has been 2 percent. At 4-year private schools, the same costs have increased by 17 percent.

Federal financial assistance is simply not keeping pace with rising college costs. In the 1970s, the maximum Pell grant for low-income and working class families covered about 40 percent of the average cost of attending a 4-year college. Now it only covers about 15 percent. Smart, hardworking kids from low-income backgrounds deserve a chance to go as far as their talents will take them. According to Postsecondary Education Opportunity, a higher education research group, the percentage of the Nation's poorest students who earned a bachelor's degree by age 24 increased only from 7.1 percent in 1975 to 8.6 percent 2003. The students left behind represent a huge untapped resource for our country.

Recently, many reports have sounded the alarm that America is losing its edge as the world's technological innovator to countries such as China and India. These countries are moving from being the world's supplier of low-wage, high-labor work to becoming the world's technological leaders by investing in their talent pool. In recent years, Americans have felt the effects of the impact of education as newly educated workers from China and India compete for prime jobs once held in the United States. According to the National Academies, in 2004, China graduated 600,000 engineers and India 350,000, while the United States produced only 70,000 engineers. To keep America's edge, we must recognize the value of investing in higher education and provide our young adults with the assistance they need so that they can compete in the global economy.

The Senate provisions included in S. 1932 that increase need-based financial aid--Pell grants and new need-based aid programs such as ProGap and SMART grants--will help many deserving students reach their educational potential. In contrast, the House fails to seize an opportunity to expand Pell grants and other need-based aid. Instead, the House bill includes provisions that would make college more expensive for families. These provisions include: No. 1, a temporary increase in origination fees for direct loan borrowers; No. 2, repeal of a scheduled reduction in the maximum student loan interest rate--from 8.25 percent to 6.8 percent for students and from 9 percent to 7.9 percent for parents; No. 3, imposing a new 1 percent borrower origination fee that will make it more expensive to consolidate loans; and No. 4, requiring lenders to charge student and parent borrowers a 1 percent insurance fee on student loans.

By insisting on the Senate provisions, we will boost need-based aid and in turn help the United States maintain its competitive edge. But most importantly, we will be a step closer to living up to the promise that President Johnson made to America's youth 40 years ago: providing access to higher education for those determined to realize the American dream.

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