Chris Dodd for President

Citing a Washington Post story in which Secretary of Education Margaret Spellings admitted that her department "had some responsibility" for "confusion" over subsidy rules that allowed student loan companies to receive hundreds of millions of dollars in payments at taxpayer expense, and that she would not seek a reimbursement from the companies, Chris Dodd today called on Secretary Spellings to seek a reimbursement from the companies, worth hundreds of millions of dollars.

"It's completely unacceptable for Secretary Spellings to acknowledge the fact that these overpayments were happening, apparently for some time, and yet refuse to seek a full accounting of these improper payments or a reimbursement," said Dodd. "This is exactly why the American people are frustrated - their government is no longer working. It's time to make government work again and get results for the American people."

In his education plan unveiled in August, Sen. Dodd called for an end to the outdated corporate subsidies for banks and an increase in competition for lower interest rates on student loans by requiring banks to compete in a federally run auction to offer federal student loans. As a result, excessive profits at the expense of the taxpayer will be eliminated and redirected to student aid so that college is more affordable for young Americans and their families.

"At a time when it's clear that a college education is becoming more and more necessary, it's unconscionable that the Department of Education is allowing hundreds of millions of dollars to go unaccounted for, increasing the cost burden of a college education for all Americans," Dodd said.

You can read more about Sen. Dodd's education plan at http://chrisdodd.com/issues/education.

Yesterday Senator Dodd spoke about the need to help American families afford paying for college education on the floor of the Senate. Dodd was speaking in support of the Higher Education Access Act. The Higher Education Access Act boosts student financial aid for college by $17.4 billion over the next five years. The bill will raise the maximum annual Pell grant from $4,300 to $5,400 and make it easier for students to repay federally backed student loans by capping payments at 15% of discretionary income. The bill also includes additional loan-forgiveness for public servants such as teachers and police officers. I want to draw out the section on Pell Grants Senator Dodd's statements on the floor yesterday. From the congressional record:

One of the items contained in this bill that I am most happy about is the increase in the Pell grant. I have been involved in this for many years. It has been terribly frustrating over the last 6, 7, 8 years to watch how little this administration is willing to support even modest increases to the Pell Grant Program in our country. The Pell grant in this bill will be raised to $5,100, in 2008 and up to $5,400 by the year 2012. Frankly, that is paltry. Candidly, I wish it were much higher, especially considering what a Pell grant used to provide only a few short years ago toward the cost of a public education. The grant used to cover 80 percent of the average tuition, fees, room and board at a public university. Today the Pell grant covers 29 percent. So even with a Pell grant you are still looking at having to come up with roughly 70 percent of the additional costs of that higher education when you take all of these factors together. As a result, low- to middle-income students who attend college are forced to finance their education with an ever-increasing percentage of loans, including private loans. This increase in the debt burden of students, in some cases, keeps them from going to college at all. As I mentioned the numbers earlier, somewhere close to 400,000 students are not going on to higher education because of financial burdens. This year alone, it is estimated that 400,000 high school graduates who are prepared and ready to go to a 4-year college will be unable to go because their families cannot afford it. While I continue to advocate for even greater increases in the Pell grant, I commend my colleagues for taking the first steps in getting us back to the 80-percent tuition coverage we achieved in 1975.

Alex Urevick-Ackelsberg of Future Majority recently posted on how some student loan lenders vary their loan rates in accordance with how many students default at their college. Quite simply, students are being given rates based not on who they are, but who all of the students at their university are. The practice is known as red-lining and it makes it harder for students to get the best terms on their loans from lenders.

Senator Dodd's Private Student Loan Transparency and Improvement Act would make private lenders report who they are loaning to and what rates, transparency that will help make practices like red-lining a thing of the past. The Act would also require lenders to provide more accurate and timely information to their customers about the interest rates, terms and conditions of their products, thereby helping students better understand their financial options and obligations.

Updated below While Senator Dodd's bold leadership to end the Iraq War, restore the Constitution, and make America energy independent has been well documented on this blog, I wanted to draw your attention to some other legislative initiatives Senator Dodd is leading of late. Recently Senator Dodd introduced the Private Student Loan Transparency and Accountability Act. The Dodd legislation extends new protections to all private student loans in order to improve transparency, prevent unfair and deceptive private lending practices and eliminate conflicts of interest. CNNMoney.com says "Student lenders would have to better disclose their rates and would be banned from discriminatory underwriting practices under legislation introduced Friday by U.S. Senate Banking Committee Chairman Chris Dodd, D-Conn" Accounting Web has more on what the bill does, as well as complimentary efforts being done by New York Attorney General Andrew Cuomo. If you're on Facebook, join the group "Student Loan Transparency Now!" Senator Dodd has introduced a bill, co-sponsored by Richard Shelby of Alabama, that would increase the Treasury Department's ability push for China to reform its currency policy. The LA Times writes that the Dodd and Shelby, "bill would change the definition of currency manipulation to make it harder for the Treasury Department to avoid making that finding for China." Senator Dodd said, “A change in our currency manipulation policy is long overdue. America’s companies and workers deserve an opportunity to compete on fair terms with countries such as China, just as we provide market access and fair competition for China and other nations on our soil. We are not asking for a headstart here, just a fair race." Both of these legislative initiatives are examples of how Senator Dodd is continuing to use his position as a Senator to affect positive change while running for President. He's taking the lead on strengthening America's economy and ensuring that all students have the opportunity to get advanced education without suffering under crippling financial burden. Update Alex Urevick-Ackelsberg of Future Majority has this to say about Senator Dodd's student loan legislation:

It's not often that politicians in DC pay attention to the needs of young people, and we really need to try and reward politicians that do, with attention, volunteering, donations, etc. If more pols would push legislation like this I'm guessing it wouldn't be nearly as hard to attract young people to the polls on election day.