Washington, D.C. - Mr. Speaker, today I am pleased to join the Ranking Member of the Education and Workforce Committee, Mr. Miller, and the Ranking Member of the 21st Century Competitiveness Subcommittee, Mr. Kildee, in introducing the Emergency Loan Abuse Prevention Act of 2004.
Two weeks ago, this body voted 413-3 to stop the Department of Education from spending any of its FY 2005 Appropriation to perpetuate the so-called “9.5% loophole” in the federal student loan program. This antiquated and indefensible subsidy guarantees lenders a whopping 9.5% return on garden variety student loans while costing taxpayers nearly $1 billion this year. That’s $1 billion that should be going to students and families trying to afford college – not to already profitable financial institutions.
The Emergency Loan Abuse Prevention Act of 2004 picks up where the Kildee-Van Hollen Labor-HHS Appropriations amendment left off by putting an end to the 9.5% loophole – permanently. Moreover, it directs the savings from this needed reform to the woefully underfunded Pell Grant program, which has lost half its purchasing power over the last twenty years. It’s a win for taxpayers who expect us to spend their money wisely, and it’s a win for students who – in this era of double digit tuition increases -- deserve all the help we can give them as they pursue their dreams of a college education.
Mr. Speaker, in closing, I’d like to submit a copy of a recent Washington Post editorial on this issue for the record and note that the Government Accountability Office (GAO) yesterday released its final report detailing the urgent need to close this loophole immediately. I ask all of my colleagues on both sides of the aisle to work with us in the same bipartisan fashion as this House spoke two weeks ago to pass the Emergency Loan Abuse Prevention Act of 2004 without delay. We have an obligation to our taxpayers and students to ensure that federal education dollars are spent where they are needed most. Thank you.