Transcript: Sen. Lamar Alexander’s opening statement on strengthening the federal student loan program for borrowers

Partial transcript of opening remarks by Sen. Lamar Alexander (R-Tennessee) on strengthening the federal student loan program for borrowers. The Senate Health, Education, Labor & Pensions Committee hearing was held on March 27, 2014:

…I was trying to remember the last person who ever said to me “It’s pretty easy to pay for college.” I don’t think I’ve ever run into anybody who said that.

My own experience is probably like everybody else’s – or most other people. You know, I had no money so I had two scholarships and five jobs to try to make my way through.

…This subject today is what can we do, I think, to simply the various ways – I think there are eight of them – that the government has come up with to help students pay back their student loans – $100 billion of new loans that we make every year.

But putting the loans into perspective accurately, I think, is helpful. And let me use – rather than my words – the words of one of our witnesses – Judith Scott-Clayton, assistant professor of economics and education at Columbia University in New York. She talked about a lot of common misconceptions about student debt when she was here. She said, “Most people think college is much more expensive that it typically is. They see stories in the news and media about elite private colleges charging $50,000 for tuition. They hear about unemployed graduates with astounding amounts of debts. But most people, in fact, pay much less.” Dr. Scott-Clayton said, “After accounting for grants, the average net price” – the amount students will pay – after subtracting scholarships and grants that the student receives and doesn’t have to pay back – “the average net price at a public four-year institution is about $3,000 per year. And at a typical community college, a student who receives Pell Grant” – we have about 9 million students who do every year – “is likely to pay nothing at all, and in fact is likely to receive money back to pay books, supplies, and other living expenses.”

Now, those were her words. I took a look at those facts.

Three out of four of our college students attend a public two or four-year college and university. This includes – of those, about two out of five of all students – attend community colleges where the average tuition and fees are under $3,300. Those students receive an average $4,850 in grants and scholarships. So, the average community college student in America is receiving about $1,500 more in grants and scholarships than what it costs in tuitions and fees to attend college.

37% of all of our college students attend public four-year universities. The average in-state tuition and fees is about $8,900. Those students receive an average $5,800 in grants and scholarships. We’re not talking loans. So they have to pay $3,100 on average in tuition and fees.

And then we have students who attend four-year colleges that are private – that’s about 15%. Their average tuition and fees are $30,000 but the scholarship and grants take that down to $12,500. At the for-profit colleges and universities, the cost is about $15,000.

And according to the New York Federal Reserve at the end of 2012, 40% of student loan borrowers had a debt of less than $10,000; 70% had a debt of less than $25,000; and less than 4% had a debt load of over $100,000. And the College Board says they earn a $1 million over their lifetime with a college degree more than if you didn’t have one.

So while this hearing is about making it easier to repay loans, I think it’s important for students to know as they think about going to college that it can be affordable and that most students don’t have to borrow too much money if they will borrow wisely.

I think, Mr. Chairman, that as we move into other hearings, we should look at the problem of over-borrowing, which you have mentioned before. The Wall Street Journal had an article in March 2nd, which I’d like to ask to add for the record, which talks about the Inspector General’s report from the Department of Education, warning that some students borrowing excessively for personal expenses not related to their education. That’s a growing phenomenon. So, over-borrowing may be partly the result of government policy.

And I think we should in future hearings talk about the various ways that have been suggested to limit the over-borrowing that can saddle some students with too much debt, such as the current practice of allowing students who are enrolled half-time to take out as much in federal loan as a full-time student. Or perhaps we should provide colleges with the authority to set some borrowing limits. These are things we’ll have to discuss.

And of course, in all this, we’re reminded that we have a grant program – that’s the Pell Grant – $33 billion a year, and we’re talking about loans which should be paid back.

Now, in conclusion, what we found in our earlier hearing when we talked about the application process…for loans, we’ve found 100 questions that you’d have to – we found that the application for loan, Mr. Chairman, was 10 pages and 100 questions, and every student hates to be presented with this. But the application to making it easier to pay back your loan is 5 pages of intimidating questions and we’re working on finding ways to simplify the application for grants and loans, of which there are 20 million of those every year. And maybe as a result of suggestions we hear today, we can think of a way to simplify the various ways we’ve already come up with to make it easier for students to pay back their loans…

I hope that as we discuss it, we keep a balanced view and we don’t suggest to American students that you can’t afford to go to college when in fact for most students you can and that you’re borrowing to much and for most students there’s no need to do that. And that, I know, goes against the popular misconception, but I think it’s important that we keep that in balance…


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  1. Pingback: Election 2014: Tennessee Sen. Lamar Alexander's voting records & positions on issues | What The Folly?!

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