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Extensions of Remarks 12812 EXTENSIONS OF REMARKS June 5, !986 EXTENSIONS OF REMARKS UNITED STATES CAN HELP STU­ higher education level, of the nation's A decade later John Silber recast the edu­ DENTS WORK THROUGH COL­ young. <It is tempting to raise the possibili­ cational bank idea into TAF (Tuition Ad­ LEGE ty of eliminating the surcharge, repaying vance Fund). Silber's TAF would be avail­ principal only. But this suggestion rings able to students only after successful com­ with enough echoes of Social Security to pletion of freshman year. The payback obli­ HON. THOMAS M. FOGLIETTA stir up political discomfort and actuarial gation would equal the amount "advanced" OF PENNSYLVANIA doubts capable of scuttling the whole idea.) plus a 50 percent surcharge. The withhold­ IN THE HOUSE OF REPRESENTATIVES Those who earn high salaries shortly after ing rate was set at 2 percent of gross graduation would meet the replenishment Thursday, June 5, 1986 obligation in a relatively few working years. income. Mr. FOGLIETTA. Mr. Speaker, I want to call Those who have low-paying professions or I would favor freshman eligibility, a lower surcharge, and a higher withholding rate. I to the attention of every Member of the House occupations might never repay fully, even over the course of a long, working lifetime. would also like to see explored the possibili­ a column by the Reverend William K. Byron, Those who decide to stay out of the work ty of including in the plan a mandatory life which appeared in the Philadelphia Inquirer force <e.g., homemakers> might conceivably insurance policy for all participants with May 26, 1986. Reverend Byron, a native of never repay). · the fund/bank designated as a sole benefici­ Philadelphia, is president of the Catholic Uni­ Beneficiaries of this system who die ary. versity of America. during college or shortly after graduation, It is time for the nation to consider adopt­ Reverend Byron writes on a restructured of course, would never repay. <Participants ing the "work-your-way-through-college" system of Federal aid to higher education; the could be required to carry low premium life principle but to reverse the sequence by per­ restructured system would be based on the insurance policies during their college years with the fund as the sole beneficiary.) A mitting college first and work later. Consist­ principle of working your way through college. point worth emphasizing is that no one ent with that policy would be a requirement Reverend Byron's column is both timely and other than the student-no parent, no survi­ to insure the borrower, not the loan, if that stimulative. I urge my colleagues to read and vor-would be responsible for repayment. device would lower the surcharge without consider Reverend Byron's comments. Fol­ And the repayment would be both automat­ complicating the administration of the plan. lowing is his column: ic and passive-therefore, no defaults, col­ In any case, the obligation to pay would rest UNITED STATES CAN HELP STUDENTS WoRK lection agencies and the like. with the student, not the parent, once a stu­ THROUGH COLLEGE Should the children of the wealthy be dent decides to participate in the plan. <By Rev. William K. Byron) permitted to participate? Congress may At that point, his or her Social Security want to designate levels of family income It is time to rethink our complex system number, and the amount and date of the and assets that would bar dependent chil­ "advance" would be registered with the IRS. of federal aid to higher education. It is also dren from drawing the advance. Presum­ time to adopt a "working-your-way-through­ ably, they would have access by virtue of The debt would be collected by means of a college" principle as the rationale for the those assets and income, to higher educa­ schedule of income-contingent and, wherev­ federal role. Only the sequence would be re­ tion without federal assistance. er possible, automatically withheld pay­ versed-college first, work later. When Boston University President John The cost of college would be paid through backs. Silber advocated elements of this idea in With the federal government functioning withheld earnings over one's working life­ print ("The Tuition Dilemma: A New Way time. to Pay the Bills," The Atlantic, July 1978) as facilitator and enabler, any student The system of federal aid to students, in and in public at meetings of educational as­ would be free to enroll in the school of his my judgment, should undergo radical sociations in the late 1970s, his proposal or her choice, subject only to that institu­ change. The "working-your-way-through" geneated anxiety among educators over the tion's admissions standards, and thus "bet" principle, if adopted, would put the ultimate possible problems associated with the intro­ financial responsibility on the one who re­ on his or her ability to succeed in the colle­ duction of the Internal Revenue Service giate years and, in the post-collegiate years, ceives the educational service-the student. into federal student aid and thus into the The federal government's role would be internal operations of colleges. In my view, to meet the financial obligation by his or that of enabler and facilitator. this need not be a problem, and even if it her earning power. Only the federal government is capable of were would be a much more manageable It would be a serious mistake to dismiss organizing a revolving fund large enough to problem than the one faced by tuition-de­ meet the national need for student aid. A this idea by pointing to the deficit and pendent schools. saying, "We don't have the resources." We revolving fund would provide an advance (as Not to be ignored or underrated, of course, distinguished from an outright expendi­ is the bureaucratic burden this procedure do have the resources. The point at issue is ture>. would place on the IRS, which is already the place of higher education on our ladder The recipient of the advance spends it, of plagued, according to current estimates by a of priorities. course, but also incurs an obligation to re­ $100 billion tax compliance gap. A radical restructuring of student aid will plenish the revolving fund. The amount of The big problem in all of this, however, is the advance would meet all or part of the not require a radical restructuring of prior­ the injection of sufficient capital into the ities, just an adjustment. It also will mean cost-justified price that the college or uni­ revolving fund. How much would be needed? versity sets on its educational services. The How long would it take for a typical advance the introduction of new discipline in the de­ advance also would extend to room and to be repaid? What, in a word, is the arith­ fense budget. board. metic of the federal role in a radically re­ According to a Business Week editorial Replenishment of the fund <i.e., a return structured student aid program? <May 27, 1985), the "leaky bucket" at the of the advance) would occur by means of a To the best of my knowledge, this revolv­ withholding tax on gross earnings whenever Pentagon (i.e., waste and fraud in procure­ ing-loan-fund form of federal aid, repaid by ment> would siphon off $23 billion in just the student works before or after gradua­ means of an income-contingent withholding tion. The sum to be returned via the with­ mechanism, originated in 1967 with a feder­ one year from the taxpayers and from the holding mechanism could carry a surcharge al advisory panel headed by Prof. J. Zacha­ defense their taxes were supposed to buy. that would cover the "cost of money" ex­ rias of the Massachusetts Institute of Tech­ Most of us will never notice the loss. pense or "opportunity cost" for choosing to nology. It seems to me that $23 billion would be use its capital this way. The "Zacharias Plan" called for the estab­ more than enough to put this restructured The income-contingent payback, together lishment of an Educational Opportunity student aid plan into place. The resources with the surcharge, would guarantee the re­ Bank that would loan money for higher plenishment of the capital and the "perpet­ educational expenses to students who would are there. We continue to misapply them ual motion" of a fund designed to finance agree to repay a fixed percentage of their because we forget that an educated citizenry the intellectual development, at the costly personal incomes once they went to work. is, the fact, our first line of defense. e This "bullet" symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. June 5, 1986 EXTENSIONS OF REMARKS 12813 JORDANIAN-PLO NEGOTIATIONS of the permanent members of the Security I would like the following questions an­ AND MIDDLE EAST PEACE EF­ Council, with the participation of all con­ swered carefully and fully: FORTS cerned Arab parties and the Israeli Govern­ When did the United States receive ment, a peaceful settlement of the Palestini­ knowledge of any or all of these three docu­ an problem on the basis of the pertinent ments? HON. LEE H. HAMILTON United Nations resolutions, including Secu­ What knowledge did the United States OF INDIANA rity Council resolutions 242 and 338. have of them prior to King Hussein's speech IN THE HOUSE OF REPRESENTATIVES The PLO declares its rejection and denun­ of February 19th, 1986? ciation of terrorism, had been assured in the Thursday, June 5, 1986 Precisely what is the United States posi­ Cairo Declaration of November, 1985.
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