ADDITIONAL INFORMATION Articles, publications, etc.: entitled___ "High Interest Rates Hit Student Loan Program," from the Washing- Senate Joint Memorial No. 110, by State Affairs Committee, from ture. Summary of testimony of National Council of Higher Education loan programs.. Communications to Bayer, David C., Assistant Chief, Insured Loans Branch, Division of May 13, 1969_ May 15, 1969, with attachment_. Health, Education, and Welfare, Department of, from: Arnold, Laurence R., 811 South University Boulevard, Denver, Zinke, Larry L., doctoral student in educational administration, Moore, James W., Director, Division of Student Financial Aid, Gray, Bruce A., director of financial aids, Gustavus Adolphus Meyer, Pierre, director, University of Minnesota, Minneapolis, O'Connor, John T., Assistant Director of Financial Aids, U.S. Office Rathz, Edward V., Indianapolis, Ind., March 26, 1969- Vander-Staay, Allen J., Assistant Director, Division of Student Alm, B. F., 6730 North 21 Street, Phoenix, Ariz., August 7, 1969.- Burford, Paula Karen, student, 853 Berkenshire Drive, Dallas, 13 Butler, W. E., Jr., manager, Brantley Draughn College, July 31, 11 Carpenter, Edward, financial aid officer, Austin, Tex., August 1, 14 Carrington, H. D., assistant cashier, Time Credit Department, 14 Compton, T. C., Massey Business College, Houston, Tex., July 31, 11 George, H. G., executive vice president, First National Bank, 11 Gilbert, Albert B., Calder, Ariz., August 7, 1969 12 Goldstein, Irving, president, Charron Williams College, Para- 11 12 Communications to-Continued Yarborough, Hon. Ralph, a U.S. Senator from the State of Texas, James, J. R., director, El Centro College of Dallas County, Lynch, Annettee, teacher, Draughter's Business College, Wichita Page 13 13 10 15 Mitten, Hal R., educational counselor, Austin, Tex., August 3, 10 Riley, Eugene C., vice president, Elkins Institute, Dallas, Tex., 12 Thayer, Paul, president, LTV Aerospace Corp., Dallas, Tex., 12 11 Williams, J. C., San Antonio Commercial College, San Antonio, Memorandum from John T. O'Connor, program officer, Department of Table entitled: “Guaranteed Student Loan Program": Annual loan volume_. Distribution of loans.. Lender participation_ 28 38 38 38 EMERGENCY STUDENT LOAN ACT OF 1969 THURSDAY, AUGUST 7, 1969 U.S. SENATE, SUBCOMMITTEE ON EDUCATION OF THE COMMITTEE ON LABOR AND PUBLIC WELFARE, Washington, D.C. The subcommittee met at 10 a.m., pursuant to call, in room 301, Old Senate Office Building, Senator Claiborne Pell (chairman of the subcommittee) presiding. Present: Senators Pell, Yarborough, Javits, Prouty, and Dominick. Senator PELL. The Subcommittee on Education will come to order. Today we are meeting to consider S. 2422, introduced by Senator Bayh, and S. 2721, introduced by Senator Javits, both of which would amend the insured loan program to reflect the rise in the prime inter est rate. There is concern that the rising rate could cause lenders who previously participated in the program to no longer do so, thus causing hardship on students attempting to finance their college education through the use of the program. We would also like to explore, in this short hearing, the interaction between funding of the NDEA loan program and increased calls upon the guaranteed loan program. At this point in the record, I would like to insert a statement I made on the Senate floor announcing these hearings. [From the Congressional Record, Aug. 6, 1969] NOTICE OF HEARINGS ON AVAILABILITY OF FUNDS FOR FEDERAL COLLEGE STUDENT ASSISTANCE PROGRAMS Mr. PELL. Mr. President, the Subcommittee on Education will meet on Thursday, August 7, 1969, to hear testimony on the availability of funds for federally assisted student aid programs. The testimony is expected to concentrate on the national defense student loan program and the insured loan program. Recent news reports and communications received by the Subcommittee on Education indicate that individuals are facing a crisis in the financing of higher education due to the curtailment of the total Federal commitment to presently authorized programs. Indications are that the administration is of the view that the most important area of immediate concern is the insured loan program and that the crisis can be met by emergency legislation concerning that program. The hearing on Thursday will seek to find the extent of the crisis, its cause, and the means of meeting it. Specifically, the subcommittee will want to ascertain whether there is a relationship between the present situation and the administration's recommendation that funds for the national defense student loan program be cut. The subcommittee will also be interested in finding out whether lending institutions are in any way exploiting the present tight-money situation. Mr. President, I, for one, have been an ardent supporter of Federal assistance to college students. I have long contended that a broad, well-balanced program of student aid should be initiated by the Congress. Emergency legislation is not being considered on both sides of the Capitol. However, we should not forget that emergency legislation is no substitute for a well-considered comprehensive, rational approach to student aid. Education merits a high priority among our national goals. Its priority is so high that the cost of providing it should not deter us from recognizing that priority. However, we have a duty to provide educational opportunities in the most efficient manner possible. A legitimate doubt has been expressed as to whether a subsidized, insured, loan program is the most efficient manner by which we provide the greatest amount of higher educational opportunities. It is for this reason that the subcommittee will also consider an expansion of the national defense student loan program as an alternative to emergency action on the insured loan program. It should be also noted that the Subcommittee on Education plans to conduct comprehensive hearings on student financial aid sometime in the near future. Legislation enacted on an emergency basis should not be considered as a substitute for a comprehensive approach to a problem. Therefore, I would expect that any legislation arising from the present situation would be limited, both in scope and duration. Senator PELL. Senator Bayh, the sponsor of S. 2422 is with us. I believe he would like to make some remarks. STATEMENT OF HON. BIRCH BAYH, A U.S. SENATOR FROM THE STATE OF INDIANA Senator BAYH. Yes, Mr. Chairman, I apologize for getting preferential treatment over the other witnesses, but I have two other committees to attend at this hour. Mr. Chairman, I think perhaps the best way to approach this is to read the three pages so that a 4- or 5-minute statement will not be lengthened into a 15-minute one. I am pleased to have the opportunity to appear to testify on behalf of my bill, S. 2422, which was introduced some time ago. May I point out just for the record that the bill now is cosponsored by Senator Church, Senator McGovern, Senator McCarthy, Senator Hartke, Senator Inouye, Senator Dodd, Senator Scott, Senator Randolph, Senator Packwood, Senator Thurmond, Senator Cannon, Senator Muskie, Senator Hollings, Senator Case, Senator Young (Ohio), Senator Gravel, Senator Bible, Senator Harris, and Senator Moss. Although we did not ask for cosponsors when it was first introduced, in the last week we have had this response, which shows, it seems to me, clear and widespread concern about the future of the guaranteed loan program. The purpose of this measure, of course, as well as the administration measure, is to try to find a way to help increase the flow of money into the insured student loan program. The pressure of inflation and high interest rates are being felt all over the United States and no facet of our economy has been free of its effects. This vital educational program will be crippled by the inflationary spiral if Congress does not act quickly. Under this program, the Federal Government pays the interest on loans made by private financial institutions to college students for the duration of the student's undergraduate education. Last year, because of increasing interest rates, Congress raised the authorized interest rate from 6 to 7 percent. Again this year we are faced with the problem of the interest rates being significantly higher than the one authorized under this program. |