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April 21, 2016

Congressman Reed Addresses Rising College Tuition Cost

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Congressman Tom Reed (R-N.Y.) challenged colleges and universities across the country to recognize the “crisis” of the rising cost of college tuition, which he said is saddling students with debt in an interview with The Sun Wednesday.

Reed spoke about his work on the REDUCE Act — which mandates that colleges and universities with endowments greater than one billion dollars must use 25 percent of the returns on the endowment for financial aid. He said he hopes it will serve as a vehicle to “not only bridge us through this immediate crisis, but to get to the long term solution which is bringing college costs down.”

Although many people consider reducing the cost of college a Democratic issue, Reed said the issue is a major priority for him and his team.

“There’s Republican leaders that often many folks chastise or summarily dismiss that we don’t care,” he said. “I care deeply about this and I think there’s many Republican leaders that are joining us in this effort to say ‘we need to tackle this issue.’”

Reed said he believes Donald Trump — who he has endorsed for President — could be a major ally in this effort.

“One of the reasons we made the endorsement that we did is because we want to use our position in a positive way, and if we can influence people like Donald Trump, Ted Cruz, John Kasich and weigh in on the presidential election to say this is a priority that we are working on and we think you should share this as a priority,’ we will continue to do that,” Reed said.

He added that despite his endorsement of Trump, he believes that whoever is in the White House will be an ally in the fight against the rising cost of college.

“It is an issue that doesn’t know left or right,” Reed said. “It is an issue that impacts kids, and that is something that should bring us together strongly.”

The bill was criticized last year by Cornell administrators, including President Elizabeth Garrett, who at the time said that although those who support the legislation have “their hearts in the right place … their methods won’t succeed for the goals they have in mind.”

John Plumb — who is running against Reed in the November elections — said that Reed’s approach “doesn’t solve the problem of college being unaffordable or the problem of high student loan debts.”

“Reed’s claimed interest in student aid rings hollow given that he voted just last year to slash Pell Grants, which would hurt our rural middle-class families and college students who rely on that program to pay their way through school,” Plumb said in a statement to The Sun. “This is just one more example of Congressman Reed trying to cover up his six years of doing nothing at all. Our students deserve real solutions, not political stunts — and they deserve a new member of Congress who knows the difference.”

Joel Malina, vice president of university relations, said in October that taking money from Cornell’s endowment could be a short-term solution, but that it would have unintended consequences in the long run.

“Taxing or otherwise tapping into an endowment’s principal investments might satisfy short-term demands — but would also cheat future generations of the educational programs and financial aid that today’s endowments support, and violate state laws that require prudent and careful management of endowment funds,” he said.

Reed responded by saying that there has been confusion surrounding the bill and that he has been working hard to clear up any doubt about its implications.

“We’ve improved the framework of the legislation and making sure that we don’t move forward without having these conversations about the unintended consequences,” he said. “There was some confusion early on in the conversation that we were talking about the principle of the endowments, but we were talking about the income coming off of the endowments.”

Colleges and universities receive preferable status under the tax code, allowing donations to be tax deductible and returns off of endowments accumulate tax free.
However, despite mostly altruistic missions that benefit the public good, some universities do not responsibly spend their money, according to Reed.

He said he hopes the REDUCE Act will bring about increased transparency in how colleges and universities spend their money.

“We’ve heard stories of football coaches, people making a donation to an endowment to get a tax deduction, that that money is used to pay off a football coach contract so that they can get rid of a football coach,” Reed said. “Is that really the charitable effort that we’re trying to recognize under the tax code?”

Reed also said that “if we’re going to have the government granting these charitable deductions and this tax free status to these funds, that it’s my role as a person who writes that legislation, being on the Ways and Means Committee, to ask the questions and make sure that the charitable endeavor of educating our kids is being maximized.”

Malina responded to Reed’s comments by saying that the administration will review the REDUCE Act and added that “Cornell remains committed to providing robust financial support to our students and to working to continually improve access to higher education for all Americans.”

6 thoughts on “Congressman Reed Addresses Rising College Tuition Cost

  1. I don’t know enough about this issue to have an opinion on whether or not it is the right approach to take (though my gut instinct tells me that Cornell’s Administrators are more likely than Congressman Reed to know what is best in Cornell’s long term.) However, I will say this. Endorsing Donald Trump in order to get this–or any other piece of legislation through, carries a high cost for Reed’s credibility and open Reed’s judgment to question.

    Trump’s misogyny and his willingness to wink and nod at violence at his rallies against protesters was already known when Reed endorsed Trump. His lack of foreign policy expertise was also well known. On March 2 more than 70 Republican national security experts wrote a scathing open letter that said among other things:

    ———————– Begin excerpts from letter by GOP national security experts———————-

    “His vision of American influence and power in the world is wildly inconsistent and unmoored in principle. He swings from isolationism to military adventurism within the space of one sentence. . . .

    His hateful, anti-Muslim rhetoric undercuts the seriousness of combating Islamic radicalism by alienating partners in the Islamic world making significant contributions to the effort. Furthermore, it endangers the safety and Constitutionally guaranteed freedoms of American Muslim . . .

    His admiration for foreign dictators such as Vladimir Putin is unacceptable for the leader of the world’s greatest democracy.

    He is fundamentally dishonest. Evidence of this includes his attempts to deny positions he has unquestionably taken in the past, including on the 2003 Iraq war and the 2011 Libyan conflict. We accept that views evolve over time, but this is simply misrepresentation. . . .

    Mr. Trump’s own statements lead us to conclude that as president, he would use the authority of his office to act in ways that make America less safe, and which would diminish our standing in the world. Furthermore, his expansive view of how presidential power should be wielded against his detractors poses a distinct threat to civil liberty in the United States. Therefore, as committed and loyal Republicans, we are unable to support a Party ticket with Mr. Trump at its head. We commit ourselves to working energetically to prevent the election of someone so utterly unfitted to the office.”

    ————-End quote from letter by national security experts—————————–

    More GOP national security experts signed on to the letter after it was published. It has now been signed by 121 experts.

    Congressman Reed endorsed Trump two weeks after the letter was published.

    And just a few days ago we learned even more about Donald Trump’s questionable judgment in those he looks to for advice. It turns out that Trump’s campaign manager has been doing lobbying for enough unsavory characters to man a fort. In the 1990s Paul Manafort worked as a lobbyist on behalf of Kashmiri American Council–a front for Pakistan’s spy agency. Manafort and his partner deny knowing the KAC was a front for Pakistan’s intelligence service, the ISI. Reporter Michael Isikoff reports that a former senior Pakistani official who wanted to remain anonymous said that Manafort knew damn well that the KAC was a front for the ISI. Isikoff says that unnamed Indian sources also claim that Manafort knew he was lobbying on behalf of the ISI.
    But maybe we should give Manafort a break on this. After all, his accusers’ credibility are questionable because they remain anonymous. And this happened well before 9/11. So what’s the big deal? Unfortunately, this was not Manafort’s only questionable client. Isikoff reports:

    “Manafort’s work in the 1990s as a registered lobbyist for the Kashmiri American Council was only one part of a wide-ranging portfolio that, over several decades, included a gallery of controversial foreign clients ranging from Philippine President Ferdinand Marcos and Zaire’s brutal dictator Mobutu Sese Seko to an Angolan rebel leader accused by human rights groups of torture. His role as an adviser to Ukraine’s then prime minister, Viktor Yanukovych, an ally of Russian President Vladimir Putin, prompted concerns within the Bush White House that he was undermining U.S. foreign policy. It was considered so politically toxic in 2008 that presidential candidate John McCain nixed plans for Manafort to manage the Republican National Convention — a move that caused a rupture between Manafort and his then business partner, Rick Davis, who at the time was McCain’s campaign manager.”

    But this is the guy Trump chose for his campaign manager. And chances are, if Trump becomes President he will either get a high level position in the Trump Administration or he will be in a position to use his close ties to the Administration to lobby for foreign dictators that no other lobbyist would touch with a 10 foot pole.

    If Tom Reed finds any of this objectionable then he certainly hasn’t shown it. Reed seems like a champion for transparency in sponsoring the REDUCE act. That is all well and good, but if Reed wants to be a champion of transparency then he should begin at home. If Reed wants to champion transparency and if he believes Manafort is an odious character that should not be associated with the Trump campaign, then let him step forth and proclaim his objections publicly. And if he doesn’t want to show his love for transparency on this issue, he could always show it another way by joining many others who are publicly demanding Trump release his back tax returns.

    But I doubt Reed will do this–leaving us to question his judgment. If I have to choose between the judgment of our late President and Congressman Reed, it really is a no-brainer.

    • You say all this while quietly ignoring all the problems with the other candidates. Nobody knows what Trump really thinks or will really do should he become president. He might not be a genius, but any rational person should be able to see that he doesn’t actually believe any of the crazy things he says. He’s playing the game like everybody else, he just isn’t trying to appeal to you. Most people have been perpetually screwed over by both the left and the right and are willing to gamble on a wild card. Outside of a handful of fringe groups, most people really don’t even have much to lose compared to a Hillary or Cruz presidency. While I can completely understand not supporting Trump (I don’t support him myself), it is only the quintessential hypocritical bigot accuser who cannot see the legitimacy of Trump’s plan of attack.

        • All politicians are liars as mandated by the system in place and it’s asinine to deride only one when they all do the exact same thing. They just aren’t all trying to appeal to the same groups. Most people who support Trump, if you turn off your computer and actually talk to people, don’t care much about the things he’s said. They just know it’s almost impossible to be worse than the alternatives that they know will screw them. Might as well roll the dice and in the process thumb their noses at their abusers.

  2. College and university expenses in the US are very reasonable. High tuition rates reflect low government funding. The small percentage of students paying full tuition subsidize the majority of students paying substantially less.

    The average undergraduate student debt is very low, though not zero.

    I believe the worst student debt is found at for profit schools such as trade schools. Also abusive are select universities that are student loan mills. These are not the typical private or public institutions.

    By absurdly threatening universities like Cornell the politicians are intentionally protecting the actual source of student debt abuse, the for profits and others.

  3. Daniel Keough, Graduate Students and a registered voter in NY's 23rd Congresssional District on said:

    Representative Reed—
    Are you concerned with the burden on students, or do you just want universities to reduce their endowments, is that the real goal?

    In looking at college affordability, why not look at how much INTEREST is charged to students? Why not look at the healthcare costs? Why not increase the direct assistance to college education programs through a 10% cut from the bloated military–which is just an incredibility large, wasteful entity.

    Why does Wall St have access to affordable loans when students are forced to pay much higher rates?
    “Every single day, this country invests in big banks by lending them money at near-zero rates,” Warren told The Huffington Post. “We should make the same kind of investment lending money to students, who are trying to get an education.”
    >> http://www.huffingtonpost.com/2013/05/08/elizabeth-warren-student-loans_n_3240407.html

    Representative Reed, it seems instead of offering problems, how about some funding, some solutions?

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