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Reed Releases College Cost Control Plan

How to foot the bill for college isn’t easy to figure out for many students and working families.

Between room and board, a meal plan and books, they face a large financial burden.

Oftentimes, they’re left paying off loans with high-interest rates for years.

U.S. Rep. Tom Reed said he’s confronting the college cost crisis and student loan debt issue through various proposals he’s supporting and sponsoring. Reed, R-Corning, told reporters during a Monday conference call that he’s dealt with the issue and has heard about it from many students and families across the district who are binded by the high costs.

“I have firsthand experience with this myself having $110,000 worth of student loan debt when I completed my studies,” he said. “Now, with my own daughter being a freshman at the University of Buffalo, this is something I have dealt with personally.”

Releasing his ‘Vision for Students’ plan Monday, Reed’s list of comprehensive reforms includes more transparency in university finances so students and parents can question administrators and colleges where the dollars are going. Reed is also sponsoring a bill that would direct universities and colleges with more than $1 billion in endowment funds to reduce tuition costs for students and their families.

Known as the REDUCE (Reducing Excessive Debt and Unfair Costs of Education) Act, Reed said he’s hoping to introduce the bill during the first or second week of session in January. Ninety institutions have over $1 billion in endowment funds. Reed’s proposal would ensure endowment funds, which are tax-free dollars, go to reduce a student’s tuition by 25 percent. Reed has said he’s open to expanding the scrutiny to other institutions as well.

If colleges and universities with large endowment funds failed to provide tuition relief, hefty tax penalties could be given out under his bill.

“Right now, we have a blueprint that we’ve utilized in order to solicit input from stakeholders across the country to limit, as much as possible, unintended consequences of such legislation,” he said. “(We’re making sure) that we’re hitting the sweet spot when we’re talking about tapping into endowments as a resource to get us through the crisis. Hopefully we get some action on this as we go forward.”

In addition, Reed’s proposal would require college campuses to submit plans to keep costs below the rate of inflation. Colleges that fail to comply could lose federal aid.

Colleges would also need to disclose administrator salary information and total compensation, including benefit packages, housing expenses and membership fees to elite social clubs, for all college employees.

For graduates repaying high-interest loans, Reed said he’s backing a bill by a Democrat from California that would allow graduates to take advantage of low-interest rates. The congressman said he also supports refinancing loans often so individuals can take advantage of the most favorable financial terms available.

Alongside alternative financial arrangements and his endowment bill, Reed said he supports the dual enrollment program, which allows high school students to take college-level courses, and the expansion of the Perkins Loan Program and Pell grants to include more students.

“We’ve put together our vision for students that’s short-, mid- and long-term to take on the issue and to make college affordable for people across America so we can provide new opportunities to that next generation as it develops,” Reed said.

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