May 9, 2002

Thank you, Mr. Chairman, for holding this hearing. More and more each year, a college education isn't a luxury - it's a necessity for workers to succeed in the global economy. A well-educated workforce also is critical to America's economic and national security.

And, of course, higher education is critical to improving social mobility for low-income families. So, I was terribly disappointed when the President released his higher education budget for Fiscal Year 2003 in February to see that his budget would cut Pell Grants from $4,000 to $3,900 and serve almost 400,000 fewer low-income students than last year.

The President also would freeze support for many other programs that enable low-income students to go to college - Supplemental Educational Opportunity Grants, Work-Study, low-interest Perkins Loans, TRIO, and GEAR UP. Of course, because of inflation, these freezes really would be cuts. At the same time, States are cutting $5.5 billion from their higher education budgets and tuitions are increasing, often by double-digits.

In fact, since the 1980s, income has kept pace with tuition only for the wealthiest 20 percent of families. And Pell Grants, which in 1986 covered 98 percent of tuition, covered only 57 percent in 1999.

What we're talking about, Mr. Chairman, is a "Perfect Storm" for middle class and low-income high school seniors who want to attend college, which would prevent 110,000 of them from attending next fall.

On top of all that, the President proposed last week to try to help balance the budget on the backs of student borrowers by increasing student loan interest rates, which also would reduce middle class and low-income students' ability to attend college, their future earning ability and even the quality of our workforce.

I look forward to hearing from our witnesses today about the importance of student aid, and in particular of allowing students to consolidate their loans at low interest rates. I also hope that we will hear from Deputy Secretary Hansen how the Administration proposes to do better by our students than its budget would allow.

Thank you, Mr. Chairman.