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Rhoades, Stairs Introduce Bill to Spur Higher Education Competition, Funding
HARRISBURG -- The
chairmen of the Senate and House Education Committees today introduced sweeping
legislation designed to make college more affordable for Pennsylvania families
while ensuring greater financial relief for soldiers and nurses pursuing higher
education opportunities.
State Rep. Jess Stairs (R-59)
and Sen. James Rhoades (R-29) introduced the Higher Education Student
Opportunity Act in their respective chambers. The legislation will require
corporations such as the Sallie Mae Corp., originally created by the federal
government as a Government Sponsored Enterprise (GSE), to make good on the
substantial investment taxpayers have made in its creation.
"First and foremost, our
legislation is designed to ensure an open, fair and competitive marketplace for
students -- as well as institutions -- seeking loans. The more honest
competition we have, the more Pennsylvania families will benefit," said Sen.
Rhoades. "At the same time, we want to expand public service initiatives that
have benefited so many of our constituents. So if we're going to let other
companies come in and take over some of these services, then the system has to
be fair and everyone has to play by the same rules."
A majority of each chamber
have signed on as co-sponsors of the legislation. In the House, 121 members
have signed on. In the Senate, 35 members have agreed to sponsor the
legislation.
"We're very pleased that so
many of our colleagues recognize the stakes here and have stepped up and agreed
to support this critical legislation because they understand that this boils
down to providing affordable access to higher education for more Pennsylvania
families," said Rep. Stairs.
"If student lenders want to
do business in Pennsylvania, they should be committed to the same public service
initiatives as our state-run agency -- ensuring that our students and families
do not lose while paying the price for higher corporate profits," said Rep.
Stairs. Sallie Mae received millions of dollars in startup funding and tax
breaks from our federal government -- and they weren't required to give anything
back. Their bottom line keeps growing for their stockholders, rather than the
public who shelled out the money to get their business started. “This is an
oversight that we seek to correct in Pennsylvania," Stairs added.
The bill will prohibit
student loan lenders from engaging in the anti-competitive practice of offering
inducements, or withholding discounts, to colleges and universities in order to
compel them to use a designated student loan agency.
It also will require former
Government Sponsored Enterprises (GSEs), such as Sallie Mae, to provide the same
public service programs and fund them in the same amount as PHEAA does. This
would include Armed Forces Loan Forgiveness, Early Education Loan Forgiveness,
Nursing Loan Forgiveness and Academic Excellence Scholarship Award programs.
"Preserving these
opportunities, even with other companies, is the best thing we can do for
students who want to further themselves," noted Rhoades. "PHEAA reinvests in
Pennsylvania's future by distributing over $100 million to public service
initiatives each year. We need to make sure these programs stay in our state
and not watch funds migrate out of Pennsylvania."
It would also require former
GSEs to contribute the same percentage (7.5%) of its Pennsylvania earnings to
the state grant programs as PHEAA does each year.
Rep. Stairs and Sen. Rhoades
both noted that they will be paying close attention to a meeting of the House
Consumer Affairs Committee in Harrisburg which will focus on Sallie Mae's
relationship with Lehigh Valley College and its lending practices. The Attorney
General's Bureau of Consumer Protection is conducting an investigation into the
loans as well, according to The Morning Call newspaper of Allentown.
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