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Students Lobby to Pass National Tuition Act of 2006

New York, NY, December 2 — Skyrocketing tuition rates and the misuse of billions of student loan and tax dollars have led student leaders of the Columbia University Senate's Student Affairs Committee to confront this National Tuition Crisis. The National Tuition Endowment (www.TuitionEndowment.org) is a grassroots initiative that is inviting student governments representing 15 million students in nonprofit and public postsecondary institutions to join their mission. The effort aims to strengthen the federal direct loan program, keep taxpayer funds for public use, and use the projected $30 billion in savings to finance college educations across America.

All bonds distributed by private banks, called “guaranteed” student loans, have historically been charged taxes; however, under current law, student loan bonds are tax-exempt, amounting to $4 billion in government losses. The bond rate for funds distributed to private banks is also currently set at 9.5%, three times current market rates. Also, these lending agencies run no risk when making loans because the federal government subsidizes defaulted loans of individual debtors. The NTE proposes addressing all of these tax loopholes. At the same time, 36 public watchdog agencies, which are engaged in the costly task of ensuring that these private lending banks operate honestly, would be eliminated by the passage of the NTE.

The initiative also proposes to streamline the federal direct student loan program, which facilitates loan distribution without private lending agencies, by eliminating intragovernmental interest rate payments from the Treasury Department to the Department of Education in the process of disbursing direct student loans.

The funds saved by fully privatizing student lending and the interest generated from direct loan consolidation would amount to over $30 billion over the next 10 years for federal taxpayers.

Since the 1990’s, college tuition and fee increases have outpaced both median family income and inflation. At the same time, state and local government contributions to public colleges and universities have been decreasing. As part of a larger effort to draw attention to the drastic fall in the affordability of higher education, the National Tuition Endowment would provide millions of students greater access to postsecondary education.

The issues of the nation’s tuition crisis and the waste of tax dollars in the financing of student loans have been discussed by Democratic and Republican representatives and senators from Colorado, Wisconsin, Michigan, and North Carolina.

At present, student leaders at Columbia University in New York City are contacting over 3,300 public and private nonprofit colleges and universities across the United States to solidify grassroots student support for this issue. On behalf of these student governments, students will lobby Congress to pass the National Tuition Act of 2006 in the spring.

Student Movement Demands Loan Reform

New York, NY, November 12 — Student governments from colleges and universities across America endorse the passing of the National Tuition Endowment Act of 2006. The NTE promises to use taxpayer revenue efficiently and to provide access to postsecondary education for millions of students. Scholars predict the NTE will generate more than $30 billion in the next ten years. The seven-pillared fiscal formula, which asks Congress to eliminate waste in the federal-aid system, can be found at www.TuitionEndowment.org.


Blurb to/from Student Governments

Dear fellow (school name) friends,

A group of students at the Columbia University Senate in New York City have been contemplating the national tuition crisis that affects all of the 3,300 colleges and universities across the United States. Through much research and discussions, we have developed a grassroots campaign called the National Tuition Endowment (NTE) that we hope to send to Congress for review by January.

The NTE is made up of seven critical pillars that can generate more than $30.7 billion in the next ten years. Please refer to our information sheet for more information on these seven critical pillars.

In order for us to get this campaign moving, we are asking for your help. We are asking that all of the student governments in America to join us to lobby Congress to pass the National Tuition Endowment Act of 2006.

If you would like more information about the NTE, please feel free to visit our Web site at www.tuitionendowment.org.

If you are interested in volunteering to be a part of this grassroots campaign, please feel free to contact me directly at nte@columbia.edu.

Thank you for being cognizant of this tuition crisis that affects so many university students every year!

Best,
Matan Ariel
Project Director
Columbia University


Blurb to Friends and Family

Dear friends,

A group of students at the Columbia University Senate in New York City have been contemplating the national tuition crisis that affects all of the 3,300 colleges and universities across the United States. Through much research and discussions, we have developed a grassroots campaign called the National Tuition Endowment (NTE) that we hope to send to Congress for review by January.

The NTE is made up of seven critical pillars that can generate more than $30.7 billion in the next ten years. Please see refer to our information sheet for more information on these seven critical pillars.

In order for us to get this campaign moving, we are asking for you help. We are asking that you sign our petition and join us to lobby Congress to pass the National Tuition Endowment Act of 2006.

If you would like more information about the NTE, please feel free to visit our Web site at www.tuitionendowment.org.

If you are interested in volunteering to be a part of this grassroots campaign, please feel free to contact me directly at nte@columbia.edu.

Thank you for being cognizant of this tuition crisis that affects so many university students every year!

Best,
Matan Ariel
Project Director
Columbia University


E-mail to Legislator Blurb

To: Congressman/Senator ENTER NAME
Office Held: ENTER OFFICE____
Issue: The National Tuition Endowment Act of 2006

Problem Statement:
It is progressively becoming more difficult for families to send children to postsecondary institutions. In the past 15 years, college tuition and fee increases have outpaced both inflation and growth of the median family income (see note 1). Millions of students suffer from extreme debt as a result of the increasing cost of higher education and the drastic decrease per student in federal, state, and private grants/scholarships, and the increased number of student loans received from guaranteed, for-profit lenders. Furthermore, students are finding it progressively more difficult to finish their degrees because of these rising costs. Sixty-eight percent of high-school graduates enroll in some form of postsecondary institution (see note 2); however, only 27 percent of adults age 25 and older had at least a bachelor's degree in 2002 (see note 3).

Proposed Solution:

A National Tuition Endowment should be created to assist students and their families with the financial burdens of postsecondary education. This endowment should be financed by seven pillars of savings, which eliminate inefficiencies in the current federal financial-aid system.

The first pillar increases savings by refinancing the government's bond rates from the fixed 9.5 percent to market rate, 3.4 percent to 3.7 percent. H.R. 5186 eliminated this problem for a year; the National Tuition Endowment will make it a permanent solution.

The second pillar eliminates the interest the U.S. Treasury charges the Department of Education for the funds to support financial aid. Billions of dollars are lost for financial aid in this process.

The third pillar eliminates default subsidies to private banks, which are making billions of dollars a year off of private loans. Student-loan providers, such as Sallie Mae, used to be nonprofit organizations. In these cases it made sense for them to receive subsidies. However, they are now for-profit organizations and they are making billions of dollars a year from student loans, a significant portion from taxpayer dollars.

The fourth pillar removes the banks' "tax-exempt" status. Again, this made sense when the banks were nonprofit organizations, but it does not make sense for them now. The government should receive revenue from the profits of private student-loan providers. The fifth pillar removes the cost of "watchdog" agencies. Without guaranteed loans, banks have the incentive to ensure students are paying their loans without government watchdog agencies.

The sixth pillar returns all interest payments from student loans back to the Department of Education and the National Tuition Endowment. This system is similar to the National Science Foundation's and other aid programs.

The seventh pillar returns the money generated from loan consolidation to the Department of Education and the National Tuition Endowment. With all these changes implemented, it is estimated that the National Tuition Endowment can generate $30.7 billion in the next ten years.

Requested Action:

Congressman/Senator NAME please help sponsor the National Tuition Endowment Act of 2006. We look forward to working with you and your staff on this great initiative. Please contact us if you have any questions. We will follow up with your office shortly.

Sincerely,

YOUR NAME
POSITION
E-MAIL
CELL
Notes:

(1) U.S. General Accounting Office 1996, 1998
(2) Mortenson, 1998; Alexander, 2000
(3) 2002 U.S. Census Data




The appearance of this website does not reflect an endorsement of the National Tuition Endowment Act by Columbia University or the Columbia University Senate.
The Columbia University Senate is hosting this Web site as a courtesy to the student members on the Student Affairs Committee.

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