U.S. DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

PUBLIC REGIONAL HEARING FOR

NEGOTIATED RULEMAKING

U.S. Department of Education

FB-6 Auditorium\
400 Maryland Avenue, SW\
Washington, D.C. 20202

Wednesday, November 8, 2006

9:00 [a.m.]{.smallcaps} -- 4:00 [p.m.]{.smallcaps}

U.S. Department of Education

Public Hearing

Washington, D.C. -- November 8, 2006

Panelist

**Representing the Office of Postsecondary Education:**

David Bergeron

Director, Policy and Budget Development Staff

Dan Madzelan

Director, Forecasting and Policy Analysis Staff

**Representing the Office of General Counsel:**

Lisa Kanter

General Attorney

Division of Regulatory Services

[P R O C E E D I N G S]{.underline}Number range CHAPTER

**Number range CHAPTERDAVID BERGERON:** Good morning. I am trying to get
these things started, and I always start a minute before it is time for
us to really begin the hearing. I do that because I know it always takes
about a minute for folks to get organized and ready to start these
proceedings.

This is our fourth in a series of regional hearings in preparation for
negotiated rulemaking. We have been fortunate at our hearings at
Berkeley and Chicago to be hosted by institutions of higher education,
University of California at Berkeley and Loyola University of Chicago.
Those were very good hearings, very productive hearings, and we are very
pleased that they went as well as they did.

We had our third hearing in Orlando as part of the Federal Student Aid's
Fall Conference, so we did have that last week. We had a number of
witnesses at that hearing that had been part of the conference, so they
brought things that they heard and concerns that they had, as a result
of what they heard, to us, that was also very productive. One of the
things that has been striking as we have gone around and had these
hearings is the remarkable students who have testified for us on issues
of concern to them, and I am sure, during the course of the day, we will
hear from more students, and I think you will be as impressed as I have
been\--their remarks at each of these hearings.

Let me introduce the people who are sitting up here, and, during the
course of the day, folks may change. Lisa Kantor is with our Office of
General Counsel, and she will be with us, and others may join us during
the day from the Office of General Counsel as their schedules permit.

Dan Madzelan, you all know, because I think anybody who has been around
negotiated rulemaking knows that he is our federal negotiator par
excellence, except for one little thing: His sessions tend to go long. I
have a feeling that will be an indicator of the day, because we have
many folks scheduled to speak, which is why I want to try to get done
with this introductory stuff very quickly. Dan is the Director of
Forecasting and Policy Analysis in the Office of Postsecondary Education
where I am his colleague and peer.

I am David Bergeron. I am Director of Policy and Budget Development in
the Office of Postsecondary Education.

This is, as you all know, the Department's headquarters building, and I
don't work here. I work across town at K Street, and so I had to go
exploring because I knew one thing everyone needs to know when they come
to a building they are not familiar with, and that is where the
restrooms are, and they are that way\--the men's room is on the right
side; the ladies room is on the left\--and I think that is all of those
logistical things.

Let me talk a little about negotiated rulemaking and the process we are
engaged in. While doing the public hearings, we are still accepting
public comment in written form through tomorrow. At the same time, we
are accepting nominees for federal negotiators for that process. Once we
get all of the public comments and get the nominees, we will do two
things, we will develop a negotiating agenda that takes into account the
public comment we received and allows us to identify issues that we
believe we can reach agreement on, and negotiate through to notice of
proposed rulemaking early next year.

Our plan right now is to begin negotiations in mid-December, have about
a six-week break between the first and second negotiating sessions, a
little longer than we have typically done, and really try to get this
process a little bit earlier on our schedule than we have had in recent
years. As I said, this process is really going to be driven by the
public comment that we received, and will receive, today and tomorrow.

So we will be taking very seriously the concerns that folks have
expressed about our regulations and the things we need to change, and we
will do that. The only thing, going in, we knew we would first be doing
for certain and absolutely was to negotiate around Academic
Competitiveness and National SMART Grants, and these\--we knew that
those two new programs really did impact and influence our change of
direction of our programs in ways that are fundamentally different from
what we have done before, and really did warrant negotiated rulemaking,
even though we will have operated the programs first under interim final
rule, and then a final regulation that we issued most recently\--the
final regulation on November 1^st^.

Is that all of the introductory things that I needed to say?

**DAN MADZELAN:** We just have to remind them\--

**DAVID BERGERON:** Yes.

Danny reminded me that, as you come forward, if you could identify
yourself and state your name and your organization so that the recorder
can have that information and make sure that it is correct in the
record. She is going to work from our list. If necessary, if you are
running too long, we will hold up a stop sign.

\[Laughter.\]

**DAVID BERGERON:** We have not had to use the stop sign in our other
three hearings; I hope and expect that we will not today. We will keep
track of time, and we will try to keep the witnesses to five minutes.
Sometimes we run a little long, but what we have experienced,
particularly when we have students testify, or people who are just
nervous to speak in public like I am, they tend to speak faster than
normal and they get done more quickly. One of the benefits of that is
that we will bring in students throughout the day that maybe were not
scheduled first thing in the morning because their schedules did not
allow them to do that. So we will be flexible to accommodate those and
try to stay on time.

With that, we will start.

**DAVID BERGERON:** Jean Morse, the microphone is behind you.

**JEAN MORSE:** Good morning.

**DAVID BERGERON:** Good morning.

**JEAN MORSE:** I am Jean Morse, and I serve as President of the Middle
States Commission on Higher Education, a regional accreditation body
serving over 500 institutions in the Middle Atlantic region of the
United States and the Caribbean. I also appear today as the Vice Chair
of the Council of Regional Accrediting Commissions, know as C-RAC, that
is composed of all of the regional higher education accrediting
commissions in the United States.

My remarks are meant to compliment those of my colleagues in C-RAC who
have testified at prior hearings held in their regions. Thank you for
the opportunity to participate in the consideration of new regulations
that will affect the seven regional accreditors, their 3,000 member
institutions, and the 17 million students served by those institutions.

C-RAC supports many of the constructive suggestions in the report by the
Commission on the Future of Higher Education convened by the Secretary
of the U.S. Department of Education. Our position is outlined in
responses to the Commission's draft reports, and messages to our
members, all of which are posted on our Web sites.

The following additional five comments address the new regulations that
might affect accreditation, and the first relates to timing.

Although C-RAC welcomes improvements, certainly, of the regulations that
implement the Higher Education Act of 1965, it supports waiting to adopt
new regulations until Congress has completed the required
reauthorization of the Higher Education Act. C-RAC has worked with
congressional representatives on reauthorization, and we will continue
to do so. Reauthorization should clarify congressional requirements, and
those requirements may require different regulations from those which
might be under consideration now.

As explained in a prior hearing by my colleague, Dr. Crow, it is really
difficult for our institutions to implement frequent changes in
direction. It is an evaluation process that is continuous that started
way in advance, and it is very hard to change in midstream.

The second point has to do with transitions to new regulations. Again,
C-RAC promotes continuous changes and improvements in practices mandated
by the Department's regulations, but we support the use of pilot
projects to test the usefulness of new approaches. We also support
gradual and careful transitions. All of the C-RAC regional accreditors
and their member institutions are already in the midst of major
initiatives to define and assess student learning and, just as
importantly, to do so in a manner that is supported by faculty and
students and that produces information that can be used for continuous
improvement. We recommend that regulatory initiatives support shared
goals of improving student learning without derailing the important work
of regional accreditors to improve student learning that is already
under way. There is a lot of work going on in campuses now, and we want
the transition to take that into account.

The third point had to do with current regulations. The report by the
Commission on the Future of Higher Education criticizes processes that
stifle innovation, emphasize inputs and processes over outcomes, and
impose unnecessary and time-consuming burdens. C-RAC regional
accreditors have all adopted new standards that promote the primary
importance of learning outcomes over processes. I would like to
emphasize that, because I am not sure that has been clear in some of the
discussion that is going on. We are very much committed to emphasizing
learning outcomes. However, we do believe in the continuing value of
ensuring the public of the ability of accredited institutions to
continue to provide promised results by reviewing certain resources and
processes.

We have many ideas to improve our processes. Increasing the flexibility
of the Department's regulations would aid us considerably in these
initiatives. Many of those regulations constrict us, in terms of the
kinds of processes and inputs that we must require of our institutions
and that are required of us. We will welcome the opportunity to work
with the Department to identify regulations that govern those inputs and
processes of accreditors and, indirectly, those of accredited
institutions. We think that could go far to implementing some of the
suggestions in the Spellings Report.

The fourth point has to do with transparency. Again, C-RAC supports
current initiatives under consideration by the Department to reduce and
revise the data it collects from accredited institutions so that results
can be publicized in a manner that is useful to the public, to
institutions, and to policymakers. C-RAC welcomes the opportunity to
work with the Department to clarify what types of data are practical and
useful, and to consider what processes would respect the needs of
students, the diversity of institutions, and the role of accreditation
in helping institutions to improve through peer review, that is a
balancing act.

Finally, there has been concern expressed about the regional nature of
institutional accreditation. Through C-RAC, all of the U.S. regional
accreditors have spoken with a single voice throughout the process of
reauthorization of the Higher Education Act, and the deliberations of
the Futures Commission. We wish to assure the Department of our
continuing ability to implement changes consistently across the country,
as we have already done with respect to policies and practices created
by C-RAC, and adopted by all of its members.

Thank you again for the opportunity to offer comments.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Barbara Briltingham.

**BARBARA BRILTINGHAM:** Good morning.

**DAVID BERGERON:** Good morning.

**BARBARA BRILTINGHAM:** My name is Barbara Briltingham, and I serve as
Director of the Commission on Institutions of Higher Education of the
New England Association of Schools and Colleges, also referred to as
NEASC.

The Commission is the regional accrediting body for 226 colleges and
universities in the six New England states.

I appear today on behalf of the Council of Regional Accrediting
Commissions, known as C-RAC, and I offer these comments to complement
those of my colleagues, Dr. Barbara Beno, Chair of C-RAC; Dr. Steven
Crow, past Chair of C-RAC; Dr. Belle Wheelan, who heads the Commission
for the Southern Association of Colleges and Schools, all of whom have
previously testified at regional hearings; and Jean Morse, from whom you
just heard.

Thank you for this opportunity to talk about issues important to the
Department of Education and to C-RAC.

My comments today reflect my experiences with accreditation. Before
joining the staff at NEASC, I served as a team chair, or member, for
five of the seven regional accrediting commissions, and on the board of
five national accreditation-related organizations, including CHEA. And
also, before joining the NEASC staff, I served as a member and Chair of
the NEASC Commission.

I join my colleagues and others in supporting the requested delay in
negotiated rulemaking as it applies to accreditation until the Higher
Education Act has been reauthorized. As Steve Crow and others have
testified, changes in regulations that come too frequently are
disruptive and confusing to our institutions. Regional accreditors are
all engaged in important work focusing on our standards, policies, and
processes, increasingly on the effectiveness of institutions in ensuring
student learning. Absorbing two rounds of new rules into our processes
within a short period of time has great potential to represent a
counterproductive distraction from our focus on student learning
assessment and institutional improvement.

The past 30 years has arguably seen more change in higher education than
the previous 300. We are now well into a powerful shift within colleges
and universities, as the focus is increasingly on what students are
learning and not, simply, on what faculty are teaching. A large and
growing proportion of faculty think differently about their work than
they did just a few years ago. Why is this?

To a very large extent, the changes are due to research on how students
learn and how institutions can promote their success. Just last week,
the Department's National Postsecondary Education Cooperative Meeting
here in Washington, D.C., focused on much of this research. The paper
presented by George Koo of Indiana University and his colleagues
provided a vivid and useful summary of what we now know. In the 40-page
bibliography of the paper, it is rare to find a reference from before
the early 1980s, and stunning to see how much of the research has been
accomplished just in the past decade.

The standards and policy of C-RAC reflect much of this research. A
portion of the research has also begun to improve how student learning
is assessed, and regional accreditation has been a major champion of
advances in research and practice in the areas of assessment. Indeed,
most regionally accredited institutions will freely say that
accreditation has been the constant instrument of increasing
expectations for colleges and universities in the area of assessment.

As our accreditation system continues to change, we should ensure that
it keeps an appropriate balance on ensuring the quality of the education
and assessing the results of that education. Surely they go together.
Just as surely, testing alone will not give us the improvements we all
want. There is much exciting work on our campuses as higher education
institutions learn how to assess students in the light of their own
mission and goals, and use the results for improvement. At the same
time, regional accreditation has an increasingly important role to play
in ensuring that the public has the information that it expects and
needs regarding our institutions.

While asking that negotiated rulemaking on accreditation be delayed
until after the Higher Education Act is reauthorized, C-RAC is also
committed to working with the Department to ensure the effectiveness of
our processes. Indeed, we are currently engaged in conversations around
substantive change and how accreditation ensures proper oversight of
branch campuses.

We appreciate the opportunity to work together in these complex and
important areas. Through this cooperation, we look forward to ensuring
that our accreditation system serves the increasingly complex system of
higher education in the interests of the public good.

Thank you very much.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Patricia Kapper, good morning.

**PATRICIA KAPPER:** Good morning.

Thank you for the opportunity to participate in today's hearing. I am
Dr. Patricia Kapper, and I am the Chief Academic Officer for Career
Education Corporation.

I joined CEC in 1997, as Director of Education and Placement, when the
company had 18 campuses. CEC has grown significantly since then, both in
size and stature. We are focused on five high-growth fields, visual
communication and design technologies, information technology, business
studies, culinary arts, and healthcare.

We welcome the Commission's report and the challenges that it presents.
We commend Secretary Spellings for having the courage to ask for
concrete and bold solutions to the problems facing students in
postsecondary institutions today.

I am here to highlight three issues raised by the Commission: number
one, remedial and developmental course work for incoming students,
secondly, barriers to the transfer of credit between institutions, and
thirdly, recording and tracking individual student progress and
outcomes.

First, the students who are falling through the cracks of the existing
system often find a place at a CEC school. 70 percent of our students
are over the age of 21, and 39 percent are minorities. Many of our
students are the first in their families to attend college. Our schools
are often the first step to new lives for countless students.

Like other colleges and universities across the country, CEC schools
must address the deficiencies of an educational system that graduates
students from high school without the basic skill competencies required
for postsecondary education. To bridge the chasm between these student
skill levels and college work, our schools offer an array of remedial
and developmental courses.

For instance, our schools offer a two-tiered system of developmental
courses in the subjects of math and English. It is our belief that the
improvements that we have made to our developmental curriculum have
produced more successful students who are actively engaged in their
education.

In an effort to replicate the success of students enrolled in these
types of programs, we have designed a developmental curriculum to be
rolled out to over 70 campuses across the country this year. Every
student will participate in a core content course each term designed
specifically to improve student skill levels, while also engaging them
in their program or degree subject matter. We are committing time and
resources to programs such as these to help students succeed throughout
their education experience, and to enhance their confidence and their
mastery of basic skills in areas such as math, reading, and writing.

Secondly, another obstacle for our students is the one the Commission
identified as a problem for students nationwide, barriers to the
transfer of credit between institutions. Our students have found the
obstacles to transferring their hard-earned credits to be two-fold.
First, they experience bias toward our operation as proprietary
institutions. Second, they encounter administrators and faculty who
object to our national accreditation, and reject transfer credits
without an objective evaluation. If the accreditation, be it national or
regional, meets the standards of the Department of Education, it ought
to be sufficient for the institutions our students would like to attend.

We are encouraged by the Commission's serious look at the shortcomings
of the existing accreditation process. We support the development of a
regulatory framework that is neutral to whether an institution is
accredited by a national or regional body.

Third, another way to increase opportunities for students is to rectify
the problem of capturing performance outcomes. The reality today is that
many students attend multiple schools and complete their education in a
non-linear way. There is a critical need to capture performance outcomes
so that parents and students have reliable, accurate data to consider
when making college decisions.

We support the Commission's efforts to address this problem, including
its recommendation to develop a privacy-protected higher education
information system that collects, analyzes, and uses student-level data.
We agree that the proposed system should be designed in such a way as to
ensure absolute student privacy.

We also urge the Commission not to implement this higher education
information system as an unfunded mandate on institutions. The
Commission recognized this potential financial burden on institutions
and students, and we fully support its recommendation that the federal
government provide incentives for states' higher education associations,
university system, and institutions to develop inter-operable,
outcomes-focused accountability systems. We look forward to working with
Secretary Spellings and others in the Department, not only on designing
this proposed system, but also on implementing other solutions to the
problems facing students in postsecondary institutions today.

Thank you very much for allowing me the opportunity to be with you
today.

**DAVID BERGERON:** Thank you very much.

**DAVID BERGERON:** Is Luke Swarthout\--thank you.

**LUKE SWARTHOUT:** Swarthout, but very

good\--most people mangle it.

My name is Luke Swarthout. I am the Higher Education Advocate for the
State Public Interest Research Group, or the State PIRGs.

The PIRGs are a nationwide network of state-based, non-partisan,
non-profit organizations. We work with students in about 30 states and
about 200 campuses. We work on federal issues on behalf of college
students, which is why I am here today.

I would like to begin by thanking the Department for beginning this
negotiated rulemaking with such an open process. In response to your
openness, students, citizens, and organizations around the country have
responded by asking for meaningful reforms to the student loan programs.

Tomorrow, the public comment period will end for this rulemaking, but,
by then, 150 students from 14 states will have testified before public
hearings, more than 1,000 students and parents will have commented to
the Department, and dozens of organizations will have sent letters in
support of the five-point plan to fix student loan repayment.

Now, American colleges and universities play a pivotal role in training
our nation's citizens, leaders, innovators, public servants, and
educators. In today's economy, a college education is more desirable
than ever before. Millions of high school students strive for its
promise and the benefits it brings for both the individual and society.
While college education has grown over the past two decades, state
appropriations and federal aid have failed to keep pace. As a result,
tuition and fees have increased, grants have failed to keep pace, and,
as costs continue to swell, students are taking on more and more debt to
pay for their degrees. Two-thirds of all four-year college graduates in
2000 left school with debt, compared to about 46 percent in 1993.

Many graduates comfortably repay their loans, but an increasing number
of borrowers face difficult repayment burdens. Our student loan
repayment system should give struggling borrowers incentive to pay what
they can to work and to avoid default. Unfortunately, the tools that are
supposed to assist borrowers with payments on federal loans are
inadequate, confusing, and inconsistent, too often providing the wrong
incentives. Without improved protection for borrowers, the nation may
see an increase in its default, its bankruptcies, rather than an
increase in more productive graduates who can contribute fully to our
society.

To solve the challenges of student debt, we urge you to adopt the
five-point plan for fair loan repayment. The five points, and I am sure
you have heard them before and will hear them later, are, in brief:

First, limit student loan payments to a reasonable percentage of income,
10 percent in most cases, no more than 15 percent. That would cap the
amount that the borrower would repay, and ensure that student loan
payments don't prevent borrowers from covering other basic costs, like
housing or food.

Second, acknowledge that borrowers with children have less available
income for student loan repayment. Currently, the formulas do not
include dependents in their calculation, even though parents with
children have less available income to put towards debt repayment.

Third, prevent added interest from making the problem even worse for
borrowers in hardship situations. Students who enter hardship can be
subject to ballooning interest payments that drive up the size of debt
and make it harder to pay down. The effort of piling interest we
actually believe is counter-productive, and, in fact, discourages rather
than encourages on-time repayment.

Fourth, cancel the remaining debts when borrowers have made income-based
payments for 20 years. For most students, college will be a worthwhile
investment that results in higher income and the capacity to manageably
repay. For some small percentage of students, however, the investment
will not yield financial rewards. For these students who make good faith
efforts to repay the loans, we believe it is in the best interest of the
government and the borrower to retire the debts after 20 years.

Fifth and finally, simplify the process of applying for hardship
deferral. The process should be easy. We want to encourage students to
take advantage of the opportunities afforded them by the Department, and
simplifying the process is critical to make sure the implemented reforms
take hold.

With these five changes taken together, it will make it easier for
students to repay their loans on time. Furthermore, based on the
analysis by public advocates, we believe it is fully within the
authority of the Department to make these changes.

I want to take one moment before I finish to acknowledge that there are
other steps the federal government must take to make college more
affordable, including increasing student aid like the Pell Grant.
However, we believe that the Department can, through this rulemaking,
make important improvements that help students and graduates manage
their loans.

As a nation, we value college education because it strengthens our
society and supports the individual. A college education presents
students with new opportunities, be they economic, social, or
intellectual. If we allow the way that we finance college to undermine
these core opportunities, we have done a great disservice to our nation
and to our citizens. We believe the Department can help strengthen
higher education by implementing these meaningful reforms.

Thank you so much.

**DAVID BERGERON:** Thank you, Luke.

**DAVID BERGERON:** Judith Eaton, please.

**JUDITH EATON:** Good morning.

I am Judith Eaton. I am the President of the Council for Higher
Education Accreditation. We are an institutional membership organization
of some 3,000 degree-granting colleges and universities, and we also
carry out an analogous function to that carried out by the Department of
Education, the recognition of accrediting organizations. At present, we
recognize 60 institutional and programmatic accreditors, including the
regional accreditors from whom you heard earlier today.

I want to offer a few comments with regard to accreditation and the
anticipated negotiated rulemaking. To do this, we will focus a bit on
the Spellings' Commission Report. There are a number of places in the
Spellings Commission where, indeed, the value of accreditation is
acknowledged. The importance of its role ensuring quality, the
importance of its role in providing access to federal funds, state
funds, and private funds, the role that it plays with regarding to
easing, not guaranteeing, transfer of credit. On the other hand, the
Report is, at times, rather critical of accreditation, raising questions
about the level of quality, raising questions about the capacity to
encourage innovation, and raising questions about public accountability.

What, from our perspective, is going on here is not a matter of right or
wrong about accreditation. Clearly, institutional and programmatic
accreditation in the U.S. has demonstrated its important value, but
rather we have got some disconnects. We have got a clash of expectations
around some very important issues. Specifically, the issue of, "for whom
does accreditation exist"; who is served by accreditation.

The Report's expectation is that the public is, first and foremost, the
audience of accreditation. Accreditation practice over the
years\--institutions and programs have been the primary audience, the
primary recipients of the work of accreditation.

I think we have a clash of expectations with regard to student learning
outcomes. The Report expects student learning outcomes to provide major
and central evidence to judge quality, evidence that is easily and
publicly available. As you have already heard this morning with regard
to accreditation practice, all accreditors call for evidence of student
learning outcomes, they have been doing this for a number of years. They
do it in a broader context of calling for various types of information
by which to judge quality, and they expect and, indeed, respect the
institutions and programs that they review with regard to making this
information about student learning outcomes available.

We have a third clash around the issue of comparability. The expectation
in the Report is that information on quality would be presented so that
students and the public can quickly make comparisons among institutions.
Accreditation practice, historically\--information about quality is
judged in relation to the goals established by an institution and
program, first and foremost, across institutions or programs to a lesser
extent. Comparability is a very, very complicated judgment.

A fourth clash that we have relates to transparency, or the extent to
which information is provided to the public. The report calls for a
comprehensive array of information, even on the results of accreditation
reviews, an end to what some people call "the black box of
accreditation." Accreditation practice is a mix of public information
and private information. It is not simply everything is public.

So there is no, as I said earlier, right or wrong, here. We do have a
clash of expectations, and these are very, very important issues to all
of us in higher education today and, indeed, to this society. We are
talking about who is the audience, outcomes comparability, and
transparencies. And these clashes are coming at a challenging time in
our society, generally. They are undermining, to some extent, the
longstanding accreditation-federal government relationship that has been
very, very successful going back to 1952, when the federal government
began publishing a list of nationally accredited institutions. We have
had a very, very successful public-private partnership accreditation in
the federal government.

So, given the clashes, and given the history of our successful
relationship, how do we end the clashes? How do we bridge the gap? How
do we maintain the successful partnership? CHEA has offered a number of
thoughts and an action plan, a framework, for doing just this.

First, I think it is important, as you have already heard from earlier
presenters, that we all acknowledge that the issues raised by the Report
are fundamental, they are key, they need to be addressed. That
acknowledged, CHEA has put together what we call an accountability
agenda, it has four key elements. We do think more needs to be done with
regard to evidence of student learning outcomes. We do think that we can
provide more information to the public about institution and program
performance. We can move toward greater transparency, and we at least
have to engage, as difficult as it is, this comparability issue. Our
emphasis is on accreditation serving the public interest. We are
concerned to strengthen the quality of higher education. We want to
further enhance the credibility and trust in accreditation that we have
long enjoyed. Our agenda is a program for action. We have a series of
recommendations. We are a forum in which we are bringing accreditors,
institutions, and the public together to address this.

A vital significance from our perspective is that this agenda needs to
be realized through our longstanding partnership with institutions,
programs, accreditors, and the government\--a cooperative effort, not an
effort where we, in the higher education and accreditation enterprise,
find ourselves simply responding to various prescriptions.

Again, the issues are important. We thank you for undertaking this
effort, and we look forward to working with you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Constance Kelly Rice.

As you come in, Constance, I remind you to state your name and the
organization you are affiliated with, please.

**CONSTANCE KELLY RICE:** Good morning, Ms. Lisa Kantor, Mr. David
Bergeron, Mr. Dan Madzelan, and fellow audience.

I am Constance Kelly Rice, the Director of the Upward Bound Program, St.
Paul's College, Lawrenceville, Virginia.

Thank you so very much for the opportunity today to speak before you.

My colleagues and I are here to address a notice of absolute priority
for the classic Upward Bound Program. We both have substantial
procedural problems with the proposed priority. We especially object to
the fact that this process effectively changes a congressional priority
for an administrative one, a practice we view as precedent-setting and
disturbing.

When authorizing the Upward Bound Program, Congress specifically did not
include these additional eligibility requirements in the statutory
language. This reflects congressional intent to provide flexibility to
local programs in determining the students who would benefit most from
these services. This flexibility is particularly important because
Upward Bound seeks to serve a population of students who are difficult
to reach. These students tend to be highly mobile, and many may be
forced to change schools due to a parent's job loss, housing needs, or
other factors. The proposed eligibility requirements could create
additional barriers to higher education for these students.

The priority asserted is such a marked departure from existing program
design that it effectively substitutes a new program for the one that
Congress authorized and provided the funds to operate. The proposed
priority discards the current flexibility to vary the program in
accordance with local needs, substituting in its place a monolithic
federal edict about whom to serve.

By establishing a priority for a cohort of ninth grade students, the
proposal would disenfranchise all the tenth and eleventh graders that
Congress intended to be served by the Upward Bound services. We all know
teenagers who mature slowly, and only late in high school realize that
they want to go to college, they could no longer be served.

The requirement that 30 percent of newly admitted students be at high
academic risk for failure would deprive certain ninth grade students,
those who may do well in school, from receiving the Upward Bound
services they may require.

This bureaucratic brainstorm is deeply flawed. First, it substitutes
local educators' judgments about who should be served, reducing local
flexibility to manage programs effectively.

Second, it automatically deprives some students that are not failing
academically from receiving services. I personally have a problem with
this as being a director. It overlooks the fact that some excellent
Upward Bound candidates may be surviving in school, but may be at risk
at failing in life.

Finally, the proposal creates a troubling gray area between
congressional intent, as expressed in statutory language, sometimes
amplified by report language, and the Department's constitutional
obligation to carry out that intent in a straightforward manner.

We appreciate that the Department is engaged with the problem of
reducing the unacceptable high numbers of high school students who drop
out prior to graduation. We, however, strongly urge you to discard this
proposed priority setting effort in favor of working with Congress and
the higher education community to develop promising approaches to
solving this problem.

Thank you so much for your attention and giving me the opportunity to
speak.

**DAVID BERGERON:** Thank you, Dr. Rice.

**DAVID BERGERON:** Janice Satterthwaite.

**JANICE SATTERTHWAITE:** Good morning.

**DAVID BERGERON:** Good morning.

**JANICE SATTERTHWAITE:** I am Janice Satterthwaite, President for the
Virginia Association of Educational Program Personnel.

On behalf of the 16 Upward Bound programs in the great Commonwealth of
Virginia, I bring you greetings.

How great this America is, because last night I stayed up, probably
until about 12:30 watching the returns, and then I got in my car and
drove at 1:30 this morning so that I could take a train to be here,
because it is that important.

Now, although I am not a director of Upward Bound, I am passionate about
TRIO and, as I said, I am the President for the State Association.

This morning, I want to specifically address the evaluation process
proposed under the priority that Mrs. Rice just spoke about. Under this
evaluation process, the Department is proposing that Upward Bound
recruit twice as many students as can be served to create a control
group. You want us to recruit students into Upward Bound, and then tell
them that they are being studied, not that they will be able to utilize
the services as our other classic Upward Bound students, not that they
will have those opportunities to go to college. For me, that is a bit
inhumane and unethical, accepting those who meet the criteria and
treating them as if there are a placebo.

I am a retired Air Force officer. I truly understand accountability.
Evaluate me, evaluate the programs, evaluate all the TRIO staff, but
don't bring in a control group of students, those at-risk students, that
need every opportunity and every chance\--that we may be the only chance
that they have to go to college\--don't bring them in as a control
group, and then tell them, no, they can't be a part.

To quote David Ward, who is President of the American Council of
Education, "If this priority-setting approach is adopted, it is easy to
imagine that many other programs administered by the Department will be
subject to a wholesale redesign outside the normal legislative and
regulatory processes."

TRIO really does work. We can look at Senator Mamie E. Locke from the
state of Virginia. She was a product of Upward Bound out of Tupelo,
Mississippi. So these programs are all over, not just local. She was the
first African-American female mayor in the city of Hampton. Or we could
check with Richard Wright, who is an Upward Bound of Hampton
University's Upward Bound program, and who is the youngest administrator
in the school system in the city of Hampton.

So, on behalf of the Commonwealth of Virginia, I strongly urge you to
discard the proposed priority-setting effort in favor of working with
the Congress and the higher education community to develop promising
solutions to solve this problem.

I thank you all this morning for giving us the opportunity to bring our
concerns.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Trea McPherson.

**TREA McPHERSON:** Good morning.

My name is Trea McPherson. I am a student at the University of
Connecticut, and I am the State Board Chairman of ConPIRG, and the
National Student Higher Education Task Force Leader.

When I graduate, I will accumulate about \$20,000 in debt. To give you a
perspective about that, it is about three years of in-state tuition at
the University of Connecticut, it is about one year out-of-state for the
University of Connecticut, and it is about one year in-state for room
and board.

Spring 2006 was a hard year for my wallet. The federal budget cut of
\$12 billion hurt, and my little sister chose to go to private school.
It is very difficult to finance college today. My parents were prepared,
they started saving when I was in elementary school, but they were not
prepared for the rising costs from then until now.

College is seemingly becoming less and less affordable as the college
degree seems to be more essential for decent employment. Due to the
amount of debt, students have to take jobs during school to pay for
student debt after they graduate. They also have to take jobs which they
are over-qualified for because of the deteriorating job market they face
when they graduate.

It also seems required that students have to put off their debt for
graduate school, for marriage, and for home ownership, because they
accumulate too much debt to afford such things. The life-changing
decision that students will have to make for student loan debt is
actually changing their major to a more lucrative job. It is not just
students that are going from an abstract profession to a more practical
one, students who want to be teachers and social workers are forced into
the world of business and engineering because of the immediate payout
that they receive when they graduate from school.

If they want to go into teaching or social work, they must set aside a
good portion of their salary to pay for student debt. They can only
really afford such things as basic shelter, food, and transportation to
their job every day, and the rest of it has to go to pay for student
debt.

Paying off debt is one of the first valuable lessons you learn as a
college student. You learn how to budget your money and you learn how to
be fiscally responsible, while also paying off the debt that you owe. It
builds character, and muscle, and it also builds credit, so it helps us
a lot\--how to learn in life. But students are starting to become
more\--the debt that they are accumulating is becoming more and more
unmanageable.

Students have to fall into practices, such as using their credit card to
pay for student

debt\--which is a horrible, horrible practice. They have to fall into
bad habits like that in order to pay for student debt that they will
accumulate after school.

The five-point plan would help students like this to help repay their
loans in an affordable fashion, because students that take in little
income, it helps them\--it puts a cap on how much they have to pay back
in a certain amount of time. They will still pay back the debt; it will
just be a lot easier on them.

As Higher Education Task Force Leader for the National Student Forum, I
would like to thank you guys for having hearings in Washington, D.C.,
Berkeley, Chicago, and Orlando. I just heard from all the students that
went to all of those hearings, they said it was great. We appreciate you
guys taking the time to listen to us, because it is really important for
students to have a voice about their opinion, especially for student
debt.

Thank you.

**DAVID BERGERON:** Thank you, Trea.

**DAVID BERGERON:** Jeff Ticehurst. Good morning, Jeff.

**JEFF TICEHURST:** Hi, my name is Jeff Ticehurst, and I am Senator in
the Undergraduate Student Government and a student at the University of
Connecticut.

All my life I have been told to work hard and opportunities would
present themselves. So, during high school, I was a student leader, held
a part-time job, and eventually graduated in the top five percent of my
class. I worked hard during high school, so I went for opportunities in
college. What I found were student loans. After raising three children
and paying for higher education for other family members, my parents
imposed the responsibility of financing my college education on me. I
thought I had everything under control until the end of my freshman
year.

Although I saved some money during high school and received local
scholarships, I still had a hefty student loan after my first year, and
realized my dream of college education, the American Dream, the dreams
of so many other college students, might be slipping away because of
overwhelming student loans. I decided to enroll in a community college
full-time over the summer while also holding a full-time job. By taking
summer classes, I was able to trim a year off my college career and,
consequently, prevent an extra \$15,000 in student loans.

Yet, even by attending a community college over the summer and attending
a state school for a shortened time, I will owe roughly \$50,000 after
graduation. To translate, this means that, for ten years after
graduation, I will owe roughly \$500 a month in student loans. I think
about this overwhelming financial burden every day as it strains my
financial capabilities now, and for the rest of my life. Yet, my
financial struggles are microscopic in comparison to thousands of other
students. Many low-income families, including those of both hard-working
students and parents, cannot even consider college, be it a community
college, state university, or other university, because there are
insufficient funds in student loan programs.

Although funds are understandably tight, student loan programs, programs
that directly aid in financing a college education and lead to
opportunity, should not be cut. What is a better investment than helping
thousands of students gain financial resources to pursue their
aspirations, to open up future employment opportunities, and to expand
the knowledge of the next generation through higher education? The
future of thousands of families relies on their ability to fund higher
education.

I strongly urge the Department of Education to enact the five-point plan
to help make students obtain a loan program that is affordable and
manageable.

I thank you for your time to speak today. Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Rebecca Fritz. Good morning.

**REBECCA FRITZ:** Hello.

My name is Rebecca Fritz, and I am Student Undergraduate Senator for the
University of Connecticut.

If the number of loans becomes more expensive and harder to pay, then
few students will have the money to go to school. We are the next
generation, and we need to be given a way we can pay for college so we
can become great doctors, lawyers, journalists, and other professionals
who will, in turn, improve society.

For those who do receive financial loans, it can lead them into great
debt, which can take half their life to pay off. Raising the student
loan interest rates hurts students when they get into the real world. It
will be hard enough to survive in a non-college environment, but when
you add on the debts they have acquired even before they start, this
gives them a disadvantage. Raising the interest rates may not seem like
a big deal, but it is to students who need as much money as they can get
in order to get themselves on their feet.

I ask you to help out the next generation and enact a five-point plan
for manageable debt. I will be asking Congress to cut loan interest
rates, too, but I feel the Department of Education should do its part.

Thank you.

**DAVID BERGERON:** Thank you, Rebecca.

**DAVID BERGERON:** Jennine Clark, please.

**JENNINE CLARK:** Good morning.

**DAVID BERGERON:** Good morning.

**JENNINE CLARK:** My name is Jennine Clark. I am a sophomore at the
University of Connecticut, and I am studying pharmacy. I am a Senator of
the Undergraduate Student Government, and I am on the External Affairs
Committee.

Last year, funding for student loan programs was cut by \$12.7 billion.
This, along with rising tuition, makes it more difficult for students to
pay for education beyond high school. I urge you to adopt the five-point
plan and make college more affordable and realistic for students.

I am one of five children. My parents encouraged my older brother to go
to school wherever he wanted, so he chose Carnegie Mellon University in
Pittsburgh. This university is nearly \$40,000 a year, but my parents
wanted him to do whatever he wanted. So he is now a junior, and I am a
sophomore, so we are in school at the same time, and when I was choosing
college, I was forced to take price into consideration, because my
parents were already in debt. So I am at the University of Connecticut,
and the pharmacy program that I am going through is six years\--and when
you get into the pharmacy school, the tuition rises even more, so the
extra two years of college plus the rising tuition is definitely going
to put my parents over the edge.

I also have three younger siblings, one is 14, one is 13, and one is 10.
So they are all going to be in school around the same time, as well. So,
as soon as I get to start paying back my student loans, my little sister
is going to be entering college, putting my parents in debt more.

It is hard enough to pay off college debt for one student, and most
families do have more than one child\--these days, students need to go
to college in order to find a job to help them pay their loans back. No
matter how bright the student could be, without college, the chances of
finding a job are pretty slim, while finding a good job are getting
slimmer every day, and college is becoming more and more a necessity in
life.

Thus, I urge you, once more, to rethink funding for college loans, and
to adopt the five-point plan to make college more affordable and
realistic for students.

Thank you for your time.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Jackie Herseman.

**JACKIE HERSEMAN:** Good Morning.

I am Jackie Herseman, Director of the Upward Bound Program for Marsh
University in Huntington, West Virginia.

I am with my two colleagues from a few moments earlier, and I thank you
for allowing us these moments today.

I am here to protest the absolute priorities that have been mandated for
the Upward Bound Program. I appreciate the name of this meeting being
negotiated rulemaking. It seems more fair than absolute priorities,
which seem a little like an oxymoron to me.

I am first concerned that the Upward Bound Program, since 1965, has
taken students in ninth, tenth, and eleventh grades. This absolute
priority says that we can only take ninth graders and a few tenth
graders. Well, number one, the law is very clear on this. Number two, we
all know that ninth graders don't know what they want to do this
weekend, much less with the rest of their lives.

\[Laughter.\]

**JACKIE HERSEMAN:** So it is frequently a difficult sell to get them to
come to a six-week program in the summer that is about school.

Tenth graders tend to be a little more focused and reasonable. We don't
often take eleventh graders, we realize that the longer kids are in
Upward Bound, the better they do, but this has been a decision that has
been left at the local level for years between the director and the
project to decide, because every student in every school district is
different.

The second absolute priority that we have a problem with is the taking
of high-risk students only\--where a large portion of whom are going to
have to be high-risk. The definition of "high-risk" is a concern. Number
one, it is only students with less than a 2.5 GPA. This may be
difficult\--I am from Appalachia\--for folks to believe we are from out
of there, but I know this is not just us, several of our rural schools,
if you go to school everyday, you get a 3.0. I have kids with 3.0s in my
high school who make 16s on the ACT. There is no college prep
curriculum. I have a school with no foreign language.

Now, I can't fix that system. Is it right? No. That school has been
taken over by the state of West Virginia twice. I can't fix that system,
but I can serve those students there, but I can't under this priority,
because they are making over a 2.5----that's crazy. While those who came
up with the system might say, "Fine, go to the No Child Left Behind
standardized test criteria." That says that the student must have not
met proficiency level in one of the areas on the No Child Left Behind
test. We have a problem in West Virginia, again. Our test is called the
West Test, because it is only given in West Virginia, and it has come
under high criticism lately for being highly inflated.

When a sample of students took the national standardized test, less than
30 percent made proficiency levels, almost 65 percent make it on the
West Test. So those scores are grossly inflated. Those students look
like they are doing much better than they are, but yet we have to take
students who have not met that proficiency level.

So these criteria do not work in West Virginia. I have talked to
colleagues; they do not work in many, many other places, and I think,
particularly, are unfair to the rural students.

I implore you to stay with what the law clearly says, which is, first
generation and low-income are the students we serve, and that they show
some academic need. We have an academic need in each program, but it is
based on that area, and the needs in that area, and that is defined by
the director in that project. It is what the law says, and it is what we
really want to stay with.

Our students design our shirts each summer, and last summer this one
said, "We're all stars in Upward Bound." She did not say, "Unless you
are in the eleventh grade, or unless you have higher than a 2.5 GPA."
Please let us stay with the law.

Thank you.

**DAVID BERGERON:** Allan Carlson.

**ALLAN CARLSON:** Good morning.

**DAVID BERGERON:** Good morning.

**ALLAN CARLSON:** My name is Allan Carlson. I am the President of the
Howard Center for Family Religion and Society in Rockford, Illinois.

I am a social historian, interested particularly in the interplay of
public policy with family formation, family stability, and fertility.

From 1988-1993, I served via appointment by President Reagan on the
National Commission of Children, and I am the author of ten books on
family questions.

A defect in most analyses of the effects of student loan debt is that
they view student borrowers only as individuals, some discrete examples
of homo economicus, rational actors moving through their lives alone.

In fact, most young adults are in real, or face potential, new family
relationships, notably as a spouse or parent, which do or may complicate
their lives, and which require a more complex calculus. Moreover, such
relationships are not only individual concerns. The future of every
human society rests on the successful creation of new families. So in my
allotted time, I would like to explore briefly the impact of student
loan debt on family relationships.

Notably, the National Student Loan Survey conducted in 2002 finds 14
percent of student borrowers reporting that their debt burden has
delayed marriage, up from 7 percent in 1991. Also in 2002, 21 percent of
student borrowers have reported that their debt burden has resulted in
delays in having children, up from 12 percent in 1991. Research in both
Australia and the United States shows a correlation between student loan
debt and a rising propensity by persons, ages 20-29, to continue living
with their parents.

A study reported in the Journal of Marriage and Family finds student
debt burden among young adults linked to a growing preference for
cohabitation rather than marriage. A 2005 inquiry by the Rochester
Institute of Technology reports that nearly half of the young singles
interviewed "Indicate that their current debts will probably delay their
plans to start a family."

A recent survey of so-called "marital strengths" closely associates debt
burden with the quality of marriage. 76 percent of self-described "happy
couples" report that major debts are not a problem for them. However, 56
percent of self-described "unhappy couples" state that "Major debts are
a problem for us."

Creighton University Center for Marriage and Family provides a detailed
study of 42 potential problems facing young, married couples. For
respondents in their 19-20\'s, debt brought into marriage is rated the
biggest problem they face, bigger, even, than in-laws.

\[Laughter.\]

**ALLAN CARLSON:** Respondents married one year or less also report debt
brought into marriage as their biggest problem.

We could also chart some preliminary numbers that reflect the impact of
student debt on subsequent family behaviors. The sharp decline of the
marriage rate between 1984 and 2003 is concentrated among persons ages
20 to 24, where the burden of undergraduate debt would be the most
pronounced. As indicated earlier, the marriage-discouraging pressures of
student debt may be a factor in driving up the number of cohabitating
couples by over 200 percent since 1980.

Finally, during the 1980s and 1990s, there was a dramatic fall in the
relative fertility of American women with four-year college degrees,
that is, when compared to all other American women. This relative
decline by nearly 25 percent isolates a special, new, anti-natalist,
anti-child force found only among college-educated women. As cause, the
evidence points to student loan debt.

Those who crafted the federal loan program intended to stimulate
investment in education, and to improve what economists call "human
capital," that is, the existence, skills, and knowledge of individuals.
In practice, the system appears to be contributing to the postponement
of marriage, to the postponement or the prevention of the birth of
children. In short, the existing system is anti-marriage and
anti-family.

So what should be done to relieve these unintended consequences? On
behalf of my organization, I want to endorse the five-point plan for
more manageable student loans. I think you all know the five points. I
want to underscore, in particular, point number two, recognize that
borrowers with children have less income available for student loan
payments, and adjust repayment rates accordingly.

I urge the Department to implement these provisions for regulatory
reforms.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Mary Jane Harris.

**MARY JANE HARRIS:** Good morning.

**DAVID BERGERON:** Good morning.

**MARY JANE HARRIS:** My name is Mary Jane Harris. I am the Director of
the Department of Accreditation at the American Physical Therapy
Association, and in that capacity I serve as the primary staff liaison
to the Commission on Accreditation in Physical Therapy Education,
commonly known as CAPTE.

CAPTE is a specialized programmatic accrediting organization that has
been recognized by the Secretary since 1977. CAPTE is not a Title IV
gatekeeper. CAPTE currently accredits 209 entry-level education programs
for physical therapists at the post-baccalaureate level, and 233
education programs for physical therapist assistants at the associate
degree level.

In the interest of full disclosure, I should also say that, in my free
time, I currently serve as the Chair of the Board of Directors of the
Association of Specialized and Professional Accreditors, though I am not
here today as a representative of ASPA.

I would like to thank you for the opportunity to respond to the
Secretary's announcement of negotiated rulemaking related to the Higher
Education Act, particularly as it might be affected by the report of the
Commission on the Future of Higher Education.

It is my understanding that the purpose of this hearing is to gather
information that will set the agenda for the planned negotiated
rulemaking, and to that end I would like to make the following comments.

Let me begin by adding my support to the comments made by other
accreditation colleagues at this, and previous, hearings regarding
negotiated rulemaking about Subpart H, in the absence of legislative
change in that portion of the Higher Education Act. I, too, believe that
negotiated rulemaking about accreditation at this time is premature, if
only because it may have to be repeated after legislative action that
now appears to have been postponed until next year. Negotiated
rulemaking is not an inexpensive undertaking, so to do it twice does not
seem to be in the best interest of the accrediting community, the
educational community, the Department, or the taxpayer.

If, however, it is the Department's determination to engage in
negotiated rulemaking about accreditation as announced, then there are
three issues that I would like to place on the record for consideration
as that process occurs.

First, though it never says so, the Commission Report appears to be
directed at undergraduate education and at institutional accreditation,
yet any changes that might be made in the expectations for accreditation
will affect all accreditors that seek the Secretary's recognition.
Currently, of the 60 accrediting organizations recognized by the
Secretary, approximately 40 of them are specialized programmatic
accreditors and, of those, somewhere between 15 and 20 primarily
accredit programs at the post-baccalaureate level.

Where institutional accreditors are engaged in the review of a wide
variety of institutions with diverse missions, many degree options, and
a plethora of possible expected outcomes, specialized and programmatic
accreditors are discipline-specific, and typically review programs with
similar missions and more focused expected outcomes. So accreditation is
not a monolithic enterprise, and therefore consideration must be given
to identification of those issues that rightly pertain to all
accrediting organizations, and those that may be more directly related
to institutional accrediting organizations, or to specialized and
programmatic accrediting organizations. Further, care must be taken to
minimize any unintended consequences of a one-size-fits-all approach to
the regulation of accrediting organizations.

Second, the Futures Commission Report speaks to the need for
accreditation to serve the public interest, but I would submit that
there is no single public interest. Indeed, there are many publics, and
many interests, and accreditation must address numerous and often
competing elements of the publics, and the interests of those publics.

For example, it is in the public interest to preserve conditions that
enable institutions and programs to reveal their weaknesses to
accreditors without fear of public relations consequences, and then let
accreditors supervise the improvements needed to address those
weaknesses. This feature of accreditation has enabled accreditors to
promote improvements in education that have benefited millions of
students.

On the other hand, it is also important for accreditors to provide
accurate and timely public information, but my accreditation colleagues
and I would ask, "What information is the public seeking?" And, more
importantly, "do accreditors have the information being sought?" Or, put
another way, "is the information that accreditors have about
institutions and programs really what the public wants?" It seems to me
that we should have answers to these questions before enacting
regulations that place added burden, both in time and cost, on
accrediting organizations, institutions, and programs to provide
information that may create more problems than it solves, and may not be
what the public needs or wants.

Which brings me to my third comment. The Commission Report calls for,
among other things, a significant increase in the transparency of the
accreditation process, and goes so far as to recommend that
accreditation be made public in their entirety. As a programmatic
accreditor, I do believe that there can be, and should be, additional
information available to the public about accreditation decisions and
findings. I disagree, however, with the notion that making reports
available to the public would be good public policy.

The prime reason for this position is that not all institutions and
programs are undergoing accreditation scrutiny at the same time. Indeed,
depending on the length of the accreditation cycle, as few as one in ten
institutions and programs are being reviewed at any one time. Herein
lies the potential for unintended consequences, when, for example, there
are a number of programs in a given discipline in a given city all
competing for the same students, and only one of them is in the position
of having its "dirty laundry" out for all to see.

Aside from the potential for students to misinterpret the information in
an accreditation report, where is the good public policy in having an
accreditation decision become the catalyst for imbalances in the local
education marketplace, should the other programs choose to exploit the
situation in their recruitment practices?

Further, at what point should the information no longer be considered
current, and therefore need to be removed from public availability? And,
if it is removed at some reasonable time, it is likely, given the
cycles, that most of the time there will be no information available for
the public to view.

In summary, the issue of transparency in the accreditation process
raised by the Commission Report may be valid, but it is significantly
more complicated than it may appear. Any negotiated rulemaking about
this issue must be done with the full recognition of all of the issues,
and it must be done in a manner that respects the diversity of
accrediting organizations, and that eliminates, to the extent possible,
any unintended consequences.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Rolf Lundberg, please.

**ROLF LUNDBERG:** Good morning.

My name is Rolf Lundberg. I am Senior Vice President of Congressional
and Public Affairs at the United States Chamber of Commerce.

The Chamber is the world's largest business federation, representing
more than 3 million businesses across the country.

Thank you for the opportunity to appear today.

I am here today because of the priority that the U.S. Chamber places on
improving the quality of education and investment in the workforce.
Numerous indicators tell us that our educational system at all levels is
not producing enough individuals with the skills to meet employers'
needs. Our members consistently tell us that deficiencies in the
education and training of those that they need to hire and advance are
among the most serious problems that they face.

To address these problems, the U.S. Chamber is undertaking a number of
initiatives. One of them is a coalition that we have formed, the
Coalition for a Competitive American Workforce, with providers of
postsecondary education that have a record of innovation and success in
workforce education, they are Corinthian College, Capella University,
DeVry, and Kaplan.

We are very pleased that the Department has announced its plans to
conduct a negotiated rulemaking, and we would like to participate. The
Federal Register notice indicates a willingness to address regulatory
changes suggested by the final report of the Commission on the Future of
Higher Education. The Chamber and the Coalition agree with many of the
findings and conclusions in the Commission Report.

Beginning with the observations in the preamble that, quote, "Not
everyone needs to go to college," but "everyone needs a postsecondary
education," and that too many college graduates "enter the workforce
without the skills employers' say they need." The Commission has laid
out a road map for reform. The Chamber and the Coalition support a
wide-ranging negotiated rulemaking that considers the recommendations in
the Commission's final report.

With that, we propose that the negotiated rulemaking agenda include the
following subjects.

First of all, transfer of credit. One of the areas the Commission
rightly emphasizes is transfer of credit. This is a problem because of
changes in the needs of today's postsecondary students and employers.
The Commission Report calls for reducing barriers to transfer, and
allowing students to move more easily between and back into
institutions. As the final report notes, this would reduce costs, expand
access, reduce time to completion, and improve institutional
transparency. It would also improve the ability of the postsecondary
educational system to respond efficiently to workforce and employer
needs.

Two regulatory reforms would begin significantly to address these
problems, in our view. First, institutions of higher education that
participate in the Title IV student financial aid programs should be
required to establish clear policies on transfer of credit and to make
those policies public. Secondly, such institutions should not be
permitted to deny credit transfers based solely on the accreditation of
the institution from which the student is seeking to transfer credits,
provided that the institution is accredited by an agency recognized by
the Secretary.

Many institutions refuse even to evaluate the credits earned by students
at other institutions, based solely on those institutions'
accreditation. There are no legitimate reasons for these practices. We
believe that the Department has sufficient existing statutory authority
to adopt regulatory changes to facilitate transfer of credits in the
conditions for institutional participation in the Title IV programs and
the accrediting agency recognition requirements.

A second subject to address is transparency and accountability. These
are also major themes in the Commission's final report. As the
Commission finds, students and parents lack good information on the
value that colleges will provide them, and policymakers lack data to
help them decide whether the national investment in higher education is
paying off.

The Commission proposes the creation of a consumer-friendly information
database that would protect the privacy of students, but still be a
vital tool for accountability, policymaking, and consumer choice. The
U.S. Chamber and our Coalition endorse these concepts. The members of
the Coalition already live with a great deal of transparency and
objective accountability\--measures for what matters most, student
achievement.

We support the Commission's interest in exploring how accreditation can
better measure quality through the use of student outcomes, and improve
access to innovative learning methods, such as online education, while
ensuring quality. Higher education institutions and accrediting agencies
can do more in this area. We believe that the Department already has
sufficient statutory authority to develop and adopt regulations
embodying these proposals in Sections 485 and 486 of the Higher
Education Act.

The next subject the negotiated rulemaking should address, in our view,
is reform of the financial aid delivery system. The Commission found
that the current financial aid system is a maze, confusing, complex,
inefficient, and duplicative. Even more crucially, the system frequently
does not direct aid to students who truly need it. The Chamber supports
the Commission's call for reform in this area.

One area for the Department to examine is the system for the delivery of
Pell Grants to students who wish to accelerate progress toward their
educational objectives by attending on a year-round basis. The financial
aid system remains geared to traditional students on a conventional
nine-month academic calendar. The negotiated rulemaking presents a good
opportunity to determine the extent to which, under the current statute,
Pell Grant disbursements can be made available year-round.

And finally, we propose that the negotiated rulemaking agenda involve
90/10 Rule. The Commission's final report makes a number of points that
support regulatory reform of the 90/10 Rule. The preamble to the
Commission's report states that distinctions based upon ownership
structure are irrelevant, except to an academic establishment
preoccupied with them, and that for-profit institutions are one of the
new paradigms that have developed to adapt to the challenges that are at
the heart of the Commission's concerns. The Chamber wholeheartedly
agrees.

In addition, one of the central themes of the Commission's report is
access to postsecondary education, how to promote it for under-served
and non-traditional groups, especially low-income, minority, and adult
students. The Commission focuses on the purchasing power of the Pell
Grant, yet it notes that the value of the Pell Grant can be undercut by
tuition increases. All of these points suggest that reform of the
regulations implementing the 90/10 Rule would further the goals of the
Commission. Experience under the Rule shows that it measures not
institution integrity and quality, but the socio-economic status of
students, that is, how much they qualify for need-based aid like Pell
Grants. The Rule thus incentivizes institutions either not to serve the
most needy students, or to raise their tuition, results that are
contrary to achieving the goals of access and affordability.

Leaving to the side the congressional debate over repeal of the 90/10
Rule, the Department can and should, in our view, revise its current
regulations to lessen their counterproductive impact, and thus the
degree to which they single out institutions on the basis of an
irrelevant factor like ownership structure. There are a number of
anomalies in the current regulations that impede access and
affordability. The negotiated rulemaking offers an opportunity to
correct these problems.

Thank you again for the opportunity to present our views on the
negotiated rulemaking that the Department is planning. We do hope to
work closely with the Department to make progress on these important
issues.

Thank you.

**DAVID BERGERON:** Thank you very much.

**DAVID BERGERON:** Cynthia Littlefield.

**CYNTHIA LITTLEFIELD:** Good morning.

**DAVID BERGERON:** Good morning.

**CYNTHIA LITTLEFIELD:** My name is Cynthia Littlefield. I am the
Director of Federal Relations of the Association of Jesuit Colleges and
Universities.

In this capacity we represent the 28 Jesuit colleges and universities
across the United States, and we are also affiliated with over 100
international Jesuit colleges and universities.

I might add that today I think it is remarkable that our nation's
students have been participating in this process. I want to commend them
for their efforts to come here today. I think that is the right thing to
do.

AJCU appreciates the opportunity to comment before the Department of
Education, particularly on the implementation of ACG and SMART Grants,
because we know that there is some confusion on our campuses across the
country concerning regulatory guidelines. Our main priority is to ensure
that regulatory complications for the ACG and SMART Grant programs do
not interfere or limit student participation. AJCU hopes that our
comments will assist in these efforts.

The first group of issues are related to the definition of "academic
year." Recent colleague letters have started to improve that definition,
but clarification needs to be supplemented related to class progression.
Several areas of confusion are the following:

Number one, the institutional definition of "class progression" does not
always coincide with the Stafford Loan definition of "academic year."

Number two, refinement of the utilization of non-classroom credits,
i.e., advanced placement, international baccalaureates, and life
learning credits to encourage advanced course work, and include full
eligibility for grant funding.

Number three, the encouragement defined by the regulations to support
two full years of study for the SMART Grant, as related to bachelor's
and master's programs, and students eligibly for the accelerated
programs degree conferment.

The next set of issues that we would like to discuss are the transfer
credits for transfer students. These issues are similar to the first set
of issues, but they are complicated by the variety of external factors
related to transfers of credit, such as:

Number one, timing related to the posting of transfer credit varies by
the completion of the necessary documentation. Class standing can be
impacted by the late arrival of this documentation, and cause great
complications for the universities.

Number two, some internal and external transfer students will regress in
their class standing due to the new program academic requirement. We
need to encourage transfers to the targeted major without the risk of
penalty due to regression.

Also, if a student has received an ACG at a previous institution, does
the new institution need to document a rigorous high school curriculum?
We ask that question.

Number three, the calculation of GPA, as related to transfer credits and
international study, needs to be expanded to assist students in
retaining eligibility and foster exploration.

And finally, number four, NSLDS procedures need to be fully documented
and integrated into the regular transfer monitoring process.

It is especially true that additional efforts need to be expanded
related to the process of awarding the ACG. To encourage students and
institutions to maximize the impact of the ACG, easy identification of
eligible students need to be established. The process of student
self-identifying, or the financial aid office being responsible for
documenting that information is somewhat flawed. A centralized
clearinghouse, possibly, could be responsible for determining that
eligibility that would best serve our students.

With the issue of GPAs, it has been mentioned earlier in the transfer
discussions, there are additional aspects of GPAs that need to be
explored. Number one, the exploration and expansion of academic
curriculum needs to be encouraged and not limited by GPA requirements.
Students need to be able to take demanding course work without fear of
losing need-based funding. This includes the proper utilization of
pass/fail options in some cases and other similar programs. And number
two, the timing of the regulations of GPAs, as related to the
disbursement of funds, needs to be reasonable and manageable.

The SMART Grants also have a student major requirement. We have
suggested adding on a few of new, other requirements that fall under the
broader definitions, science, math, technology, et cetera, such as
environmental science, digital communications and multimedia technology,
biophysiology, gerontology, nutrition sciences, psychopharmacology,
anthropology, and physical anthropology, to cite but a few.

We also believe that clarity and expansion of the distinction between
intended declared majors and the required progression of course work
between double, triple majors is also critical for a smooth running
program.

For federal student loans, AJCU would not be here if we would not
mention that our primary concern has always been to minimize student
loan debt. While recently passed student loan interest rates will indeed
contribute to further debt burden for our nation's students, we can try
to minimize that debt for students who are currently at risk.

AJCU is supportive of simplifying the process for various repayment,
deferment, and hardship options for these impacted students, and we
would encourage that to be discussed in one of the negotiated rulemaking
sessions.

We greatly appreciate the opportunity to speak here today before the
Department of Education. Our association has been active in this
process, and we appreciate Loyola University hosting one of the
hearings, in addition to two of our institutions who have already
testified, Marquette University and Loyola Chicago University.

And finally, may I say that AJCU hopes that we can have an active
participation in this wonderful process called "negotiated rulemaking,"
and I thank you all today for listening to my comments, and for having
us all here today after a long night for all of us with limited sleep.

Thank you very much.

**DAVID BERGERON:** Thank you, Cynthia.

We are going to take a ten-minute break. As we are doing that, let me
say two things. One is, Cynthia, we are trying to answer the question
about reliance on prior institutions, we have said you can rely on prior
institutions for determination of student's eligibility for ACG, and
they can rely on that for documentation, just so folks know that. I,
like Cynthia, have enjoyed the students' comments, even though they are
from the University of Connecticut.

\[Laughter.\]

**DAVID BERGERON:** Having graduated from the University of Rhode
Island, I always get concerned when my neighbors from Connecticut come
out in such numbers, it speaks so well.

One of the things I have appreciated, though, throughout this process,
is the comments of the students, they have been very helpful to us as we
have thought about the issues around student debt, and they have all
been very well-spoken, and reflect very well on our college students. So
before they went back to the Northeast, I wanted to make sure and
compliment them. I know we will hear from more students throughout the
day.

With that, a ten-minute break.

Number range CHAPTER **DAVID BERGERON:** If you want to continue to
chat, you can go outside into the other room, but we do want to be
courteous to the folks coming to testify.

**DAVID BERGERON:** Jim Tolgert.

**JIM TOLGERT:** Good morning.

My name is Jim Tolgert, and I am here representing the Career College
Association as the Chairman of the Board of Directors. However, my day
job is I am the Chief Executive Officer of the Education Futures Group,
an investor in private postsecondary education schools.

It is a pleasure to present a summary of my comments, which I have
submitted also in writing.

On behalf of the Career College Association, I would like to thank you
for this opportunity to comment on the final report from the Commission
on the Future of Higher Education, and the agenda for the upcoming
negotiated rulemaking sessions.

CCA is a voluntary membership organization of private postsecondary
educational institutions that comprise the for-profit sector of higher
education. CCA's 1,400 members educate and support nearly 2 million
students each year for employment in more than 200 occupational fields.
All CCA members must be licensed in the state in which they are located,
and accredited by a national or regional accrediting agency recognized
by the U.S. Department of Education.

The Commission on the Future of Higher Education has performed a
valuable service by examining key issues related to how postsecondary
education can better address the needs of our nation in the 21^st^
Century. The diverse points of view presented to the Commission and the
frank dialogue among the Commission members produce a report that should
stimulate important improvements to our higher education system. It
takes common sense, as well as a market-based approach to higher
education in the best interests of students, employers, and taxpayers.

The Commission's recommendations coalesced around the three broad themes
that have been at the center of CCA's legislative agenda for the last
four years: accessibility, accountability, and affordability. These
themes are at the core of the mission of the career college sector.

First, accessibility. As a group, we provide access to colleges for a
disproportionate share of minority and non-traditional students. We
promote the Commission's recommendations to facilitate further higher
education for these students.

Second, CCA supports the Commission's findings on the need for increased
accountability and transparency in postsecondary education. We were
pleased that Chairman Miller mentioned the institutional report card
that CCA proposed several years ago as one example of what a good
accountability and consumer information piece could look like. CCA
supports the Commission's suggestion that institutions report their
retention and their job placement numbers. This is a valid
accountability measurement.

Third, affordability. We were pleased that the Commission focused
attention on the transfer of credit barriers students face. The
Department of Education must address the discrimination that students
encounter when they seek to transfer credits from institutions that are
nationally accredited to institutions that are regionally accredited.
Denials and deterrents to credit transfers are unfair to students,
inhibit student completion, and drive up the cost of postsecondary
education by forcing students to take and pay for the same course twice.
This does not make me happy as a taxpayer or as a parent.

Informal attempts to address this issue have failed to adequately
address this situation. Both the House and Senate address this issue in
the reauthorization bills, and we hope that when Congress returns to the
task of reauthorizing the Higher Education Act, it will legislate in
this area. We hope the Secretary will also explore other means to
promote fair and transparent transfer of credit policies.

The Career College Association agrees with the Commission that all
stakeholders in higher education would benefit from better coordination
between the needs of employers and educational institutions. We have for
years worked closely with the employers in our communities to ensure
that our students graduate with the specific skill sets needed to
progress in their careers, and our institutions are able to move quickly
to respond to market needs by creating new programs or revising current
ones.

If I may now address a few issues related to the new interim
regulations. The Career College Association is pleased to have new grant
programs available to students. We understand the time constraints
facing the Secretary in publishing interim regulations, and look forward
to the negotiated rulemaking process to make some improvement to the
regulations.

We urge the mandatory participation requirements be dropped for both the
ACG and SMART Grant programs, Congress did not mandate participation. We
believe the Department should treat these two grant programs in the same
manner as all other Title IV HEA assistance programs by allowing
institutions to choose whether or not to participate. Additionally, we
urge the Secretary to reconsider the regulatory restriction placed on
the ACG that limits them to degree-granting programs.

In closing, the Commission has given the higher education community the
beginnings of a roadmap to improving the education marketplace. We look
forward to working with you, both in the upcoming negotiated rulemaking
sessions and throughout the future, to implement some of these proposals
for the benefit of students and the American economy.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Dallas Martin.

**DALLAS MARTIN:** David, Dan, good morning.

**DAVID BERGERON:** Good morning.

**DAN MADZELAN:** Good morning.

**DALLAS MARTIN:** As you know, my name is Dallas Martin, and I am
currently the President of the National Association of Student Financial
Aid Administrators.

I appear before you today on behalf of the more than 3,000 postsecondary
educational institutions and others with related interests to our
members of NASFAA to offer our suggestions for issues that should
receive consideration during the Department of Education's upcoming
negotiated rulemaking session, particularly as it relates to the
implementation of the Academic Competitiveness Grant and the National
SMART Grant Program, as well as some additional provisions that are
included in the Higher Education Reconciliation Act of 2005.

Let me note that we appreciate the Department's solicitation of agenda
items, and we believe that this process will yield regulations as it has
in the past that will help institutions to deliver student aid funds to
eligible students in a timely manner, fulfilling the purposes of
negotiated rulemaking, and to develop procedures that work in the
institutional setting and remain within the statutory burdens. Further,
we hope that the Department will use the negotiated rulemaking structure
to ensure that the concerns of all interested parties may be taken into
account as these new program provisions are implemented.

We would like to offer the following listing of items for your
considerations. Let me begin with the regulations governing Academic
Competitiveness Grant and the National SMART Grant programs. Not
surprisingly, most of the questions that we have received from our
members pertain to academic year progression, advanced placement
credits, and rigorous secondary school program, but we are also now
being asked more about transfer student eligibility and determination of
the GPA in a variety of situations. We believe that these questions in
particular are going to continue to arise now that we have begun to
implement the programs, particularly as we move into the second
semester, or spring terms, later this year. For this reason, we would
hope that all of the ACG and SMART Grant Program regulations would be
open during the time of the negotiations.

There are also other regulations under the HERA Act that we also have
some concerns about, and these are the topics that we would suggest be
also added to the negotiated rulemaking agenda. First, the Grad PLUS
Program, and particularly we are concerned about the issues of both
entrance and exit loan counseling, as well as what might be the
appropriate repayment period start date for students who have Grad PLUS
loans, because it is much different, obviously, with those students than
it is with the way we think of that program with traditional parents.

Another topic is the telecommunications versus correspondence
instruction. Given the many instructional variations that exist today,
as well as the various technologies that are in use, we believe that
this is an area that needs to be very carefully examined, and the
community input would be invaluable. We want to make certain that, first
of all, we do not unnecessarily limit someone who has good suggestions
and programs, but we also want to ensure that there is also program
integrity maintained, regardless of telecommunications or correspondence
instruction.

Another topic is the new loan discharges, particularly the approach
taken in the interim final regulations regarding the requirement for
obtaining the discharge based upon the liability of identity theft. This
is an area that is new, it is increasing, and it is one that we think
needs to be looked at very carefully so that it is consistent with other
industry standards.

Another topic is the post-withdrawal and late disbursement requirements.
We are particularly concerned about a number of issues here, but one is,
"Why are grant funds now subject to the new confirmation requirement
when we can find no reference to the grant program in the statute
itself?"

In addition to these and other topics, let me also give you, in the
interest of time, two other broad topics that are not part of the
regulations, but that we had hoped would be on your agenda. The first is
the establishment of "safe harbor" language for institutions. As you are
all aware, the implementation of the HERA provisions occurred in a very
compressed timeframe. And while I want to express my sincere
appreciation to you and to your colleagues at the Department for the
efforts that they have made, and that you have expended in terms of
implementing these new grant programs, and to develop these interim
final regulations in less than eight months, I also would remind you
that our members, as well, have had to proceed in implementing these
programs and making decisions based upon their reading of the statute,
and with less than complete regulatory guidance. Given the fact that I
believe that everyone has proceeded with a good faith effort to make
preliminary decisions consistent with the reading of the law, regulatory
language should be developed during this process to protect parties
against enforcement standards that were not applicable or available when
these actions were taken.

A second broad topic that I would also hope that you would consider that
are not part of the current regulations, but we have heard many people
comment on today, and that would be to modify the repayment options for
borrowers with student loan debt burden. We would urge that the
negotiated rulemaking committees carefully examine reforms that can be
made under current law with existing regulations to modify repayment
options for borrowers with unmanageable student loan debt. And
particularly amongst those, I would mention the economic hardship
deferment, to make certain that is more accessible. There are other
things in that area that we should look at, too, because this is an area
of increasing concern to borrowers across the country, and certainly
will make a difference in terms of their lives and the future and
well-being of this country.

I thank you for your consideration of these recommendations. We look
forward to working with you and providing you with any assistance today.
And again, thank you for the opportunity to be here today.

**DAVID BERGERON:** I want to say, Dallas, as you are going back to your
seat, that we are aware that we need to do work in the area of identity
theft. When we publish the final rule, we made reference to that, the
desire on the part of the Department to work with the broader community
to come up with better processes, and procedures, and rules around that
particular provision of the HERA.

**DALLAS MARTIN:** And we appreciate that.

**DAVID BERGERON:** Thank you, Dallas.

**DAVID BERGERON:** Nikolai Blinow.

**DAN MADZELAN:** We'll come back.

**DAVID BERGERON:** No, she is coming.

**NIKOLAI BLINOW:** I am here.

Hello, my name is Nikolai Blinow, and I am a senior at Salem State
College. I am also a features editor for The Log, and a MASSPIRG
volunteer.

Throughout my years at Salem State College, I have seen my tuition rates
and fees rise, specifically, the grant within my financial aid package
has shrunk. Thus I, along with my fellow students, have been forced to
compensate by taking more and more student loans out, loans that will
affect my life immediately upon my graduation and for years afterwards.

As a member of a single parent household, these rising costs have forced
me to more or less sign my life away to college. From the beginning, I
knew there would be no money for college. My father remarried and
stopped making financial contributions when I was very young. My mother
worked four jobs just to make rent and to buy food. Together, we lived
in subsidized housing. Money was tight and could not be used towards
anything but the bare necessities.

However, my mother was always supportive of me going to college, no
matter what the cost, and I am so thankful for her support. She has
motivated me to get a college degree, because she knows that higher
education offers me the opportunity to change my social standing and
will allow me to provide myself with a future that she did not have for
herself. The type of life that she wants for me is modest. She just
wants me to be able to own my own home, be able to take a vacation every
once in a while, be able to afford a family and provide for them in the
future, and to have time to be involved in my community, all things that
she has not been able to have for herself. I know that with continued
penny-pinching I will make it, but I know I will need her cheering me on
in the background to make it happen, to pay off my debt, and to get to
where I want to be.

Yet there are many who are not as fortunate as I am. How many aspiring
college students don't have a great parent pushing them from behind? How
many can't see a way over the obstacles of financing and debt to decide
that it is worth it? The high cost of college can be an intimidating
thing when you come from close to nothing. Looking back, I can easily
see my mother and I making different choices, deciding that college was
not in my future.

I am grateful, despite the huge debt burden that I will carry, that we
can still see a way for me to make it. I think it is tragic that so many
other students and families have a different point of view.

While the Department of Education may not be able to alter college
expenses, you can make a difference by adopting the five-point plan for
manageable debt. Adopting this plan will make college loans more
affordable, particularly for those of us from low-income backgrounds
with a lot of demands on our paychecks. By making these changes, you can
keep the path to college clear for so many others. More people will be
able to attend college and become productive members of society, and
that is the original intent of the student loan program.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Benjamin Navon.

**BENJAMIN NAVON:** I am Benjamin Navon. I am here representing Salem
State College, The Salem State Log, and MASSPIRG.

Good morning. I would like to thank you for taking the time to consider
this very important matter to young voters. I am here not only to
represent my plight, but to express the concerns of many of my peers at
Salem State College and throughout Massachusetts.

I am currently the Editor in Chief of the student newspaper. I take my
responsibilities as a student leader seriously, and I am constantly
soliciting the views and opinions of my peers. A resounding concern for
all Massachusetts is the rising cost of education, coupled with the
slashing of student aid by politicians.

According to Salem mayor, Kimberly Driskel, Massachusetts is at the
bottom of the barrel when it comes to funding state higher education. As
the Commonwealth cuts funding for student aid initiatives, more and more
students are relying on government and private loans to pay for college.
By the time students are ready to graduate, the interest compounded on
these loans can be suffocating.

When I first matriculated to Salem State, I was apprehensive about how I
was going to be able to afford tuition. Student loans enabled me to
pursue a degree, and for that I am thankful. However, as I conclude this
academic year, I foresee significant hurdles that I will need to
overcome in order to be debt free.

I plan to graduate in May. Consequently, I have been exploring my
options for life after college. I have researched entry level jobs in my
chosen field of journalism, and I find it disheartening that a sizable
amount of my post-tax salary will be allocated to repay my student
loans. Clearly, the Department of Education is unable to stem the rising
cost of higher education, but the government can relieve students of
large loans by implementing the five-point plan for manageable debt.

By adopting these changes, more people will be able to attend college,
and expand their minds, and better their future and that of this
country. Education is critically important to promote a healthy and
viable society.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Steven Boudreau.

**STEVE BOUDREAU:** Good morning.

My name is Steven Boudreau, and I am here representing Worcester State
College in Massachusetts.

As a college student, I am aware that student loans have become a great
problem. As a senior at Worcester State College, I have noticed that
many students like myself are burdened with a great amount of student
debt.

Worcester State College is a mid-size school, primarily commuters, and
the majority of our students come from working class households.

In both my experiences as a student and a member of student government,
I have come across of my fellow students that are burdened by student
debt. In a nation where children are taught that they can do whatever
they want if they only have the drive and the skill, many prospective
students are not reaching their potential due to lack of money.

In order to help keep the amounts of my loans down, I, like many of my
friends, have taken a very reasonable step that is going to work well in
college. I, myself, work about 27 hours a week on average. This may not
seem like a great deal, but coupled with 18 credit hours of classes and
being involved in student government, I am now working 45 hours or more
a week to graduate in debt.

I aspire to work in the television industry. I have been told that I can
expect anywhere from \$20-25,000 a year for starting salary. In the last
four years, I have accumulated just about \$20,000 in student loans.
When now calculating taxes and interest, I will be paying anywhere
between 8 to 10 percent of my annual income just for these loans.

After four years of college, four years of hard work, I will be
considered just above the poverty line after I have paid off my loan
debt. There are millions of other students who are in the same situation
I am. My own finances aside, I am lucky. I chose a career path where a
four-year degree will be enough to get my foot in the door. I cannot say
the same for students in this country who have chosen to become
teachers, social workers, and various other types of civil servants.
Many of them are told they need at least master's degrees, and they will
not be making very much money after graduation. These people who have
chosen very noble professions are underpaid as it is, then they are
forced to pay a sizable percent of their income to student loans.

One of my closest friends aspires to be a kindergarten teacher. She is
\$30,000 in debt, and she still has grad school to look forward to. She
needs to be able to live after college, and not continue to be a burden
on her parents. The amount she will be paying in loans is amazing. At
the rate teachers are paid and the lack of raises they receive, my
friend will be in debt for many years to come. The amount of income that
a person makes currently has no bearing on the amount they are required
to pay back or the size of their family, or other great financial
obligations people have that can drastically change the amount they are
able to pay\--are still not considered, and hinders a person's progress
in life.

As life can be unpredictable at best, there are many people who can not
pay back loans for one reason or another. We are lucky enough to live in
a nation that has concern for these people and has installed the
hardship program, while a noble idea, it has flaws. The requirements to
enter the program are strict, and there is far too much red tape. When a
person is finally accepted into the program, all the debt they have
accumulated is held for a period of time, although the interest is still
calculated. The people in this program have encountered some sort of
personal problem that has brought them to hardship. Why should they walk
out of the program having left one problem behind and finding another?

The price of college is rising. This raises a new problem; the very
people that public colleges and universities are meant to educate are
the people that are becoming financially ineligible. As there are few
people at Worcester State College who can pay for their education, many
of us are forced to take loans. Any cuts in student loan programs cuts
the number of working class families who can afford to send their
children to college.

We are not here asking for a handout, and we don't want charity. We do
realize that there are many changes that are going to be made today. All
we want is to know that, when we graduate, we can pay back our loans in
a fair and reasonable manner.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Andrew Klimkowski.

**ANDREW KLIMKOWSKI:** Good morning.

My name is Andrew Klimkowski, from the Richard Stockton College of New
Jersey.

Thank you for affording me the opportunity to speak before you today on
the state of higher education in America.

I am a political science student at the Richard Stockton College of New
Jersey. I serve on the governing board of my institution as a student
trustee. I have written higher education policy recommendations for
Governor Corzine as a member of the Higher Education Transition Policy
Group.

I will note that my recommendation was to keep tuition affordable for
all New Jersey college students. Governor Corzine, for reasons of his
own, did not implement these recommendations, so I have approached you
today instead.

\[Laughter.\]

**DAVID BERGERON:** As far as I know, I have never been voted for.

\[Laughter.\]

**ANDREW KLIMKOWSKI:** Cuts to college budgets at the state level,
combined with cuts to student loans at the national level are putting
the squeeze on students from lower- and middle-income backgrounds to get
to college in New Jersey.

If it were not for the fact that I am in the New Jersey Air National
Guard, I simply would not have the financial means to obtain a college
degree. I grew up in a farm in New Jersey and learned a hard work ethic,
strong moral values, and a greater understanding of society. While my
grandparents were ill and could no longer continue farming, they bought
a smaller farm for retirement. They sold their farm to Chinese farmers
who taught me Mandarin Chinese. Growing up, globalization was at my
doorstep.

I knew I wanted to go to college; however, my family did not have the
financial support for me to go. I researched every avenue for me to get
on the right path to college. In 2000, I joined the New Jersey Air
National Guard. The state of New Jersey pays 100 percent of
undergraduate and graduate education for our brave men and women in the
National Guard. While working toward my dream of a college education, my
life significantly changed on September 11, 2001.

I was working at McGuire Air Force Base that day\--I will never forget.
I never felt so defenseless. I have since been activated twice, and
pulled out of college to serve our nation. I am a veteran of Operation
Enduring Freedom, Operation Iraqi Freedom, and Operation Noble Eagle. In
transitioning back to college\--I want to make a difference in my
college community, so I ran for the board of trustees. As a stakeholder
in higher education and a representative of all the talent currently
attending Stockton, I am deeply concerned about our future.

The American higher education system is facing a social stratification
with the proportion of low-income and middle class students being
replaced more and more by the sons and daughters of higher income
families. According to the Brookings Institute, there is a 20 percent
decline in state investment in higher education for the past 25 years,
so tuition and fees have risen dramatically. The top family income
quartiles have a 75 percent chance to go to college, and the lowest
families have less than a 10 percent chance to attain a college degree.
We need to bridge the gap of social and economic inequality that higher
education is producing in American society by increasing access and
affordability for all Americans, regardless of socio-economic
background.

I also have economic concerns. In Thomas Friedman's book "The World is
Flat," he paints a clear and vivid picture of the global village. As
automotive, textile, mill, and factory jobs increasingly go overseas,
Americans must adapt and change by going back to college to acquire new
knowledge skills and abilities to be competitive in this global economy
where human capital is critical.

China produces 600,000 engineers, and America produces 70,000
engineering graduates. The United States has fallen behind the United
Kingdom, Singapore, France, Ireland, South Korea, and other countries in
the proportion of 24-year-olds with a college degree. According to the
American Council on Education, younger Americans are falling behind
young people of other nations in college enrollment and completion
rates.

While the United States is still a world leader in a proportion of
Americans ages 35-64 with a college degree, it ranks seventh on this
measure for 25-34-year-olds. In order for our nation to be competitive
in a global village that transcends borders, we must set a national
vision to invest more funding into higher education.

I would like for you to take away from my speech five action items as
recommendations to advance higher education in America.

Action item number one, we need to increase access and affordability. We
need to bridge the gap of social stratification of low-income middle
class families. One set of measures that the Department can take is to
adopt a five-point plan for manageable student loan debt that you have
heard about from many students across the nation.

Action item number two, we need to create a two-way process of
communicating to the American people the value of a college degree with
the many societal benefits that I have outlined. Right now, most
Americans see higher education as a road to a higher paycheck rather
than a conduit for a better society. I urge you to fund stronger public
education efforts so that citizens and elected officials make better
informed decisions to keep college opportunity more fully funded.

Action item number three, create national programs to ease the
transition of our veterans returning home from the global War on
Terrorism so that they can fit back into society and enroll in colleges
and universities. I fear that with post-traumatic stress disorder
veterans will not be able to attain a college degree unless we raise it
as a national issue. Many colleges and universities refuse to accept
military course work; therefore, many veterans have to take course that
they have already received during military training, which adds to the
burden of cost for military veterans.

Action item number four, we must ensure that public trust and
accountability of the higher education system with the American people.
I am working on a statewide level to address accountability problems in
New Jersey. While I appreciate the Department's concern on this issue, I
believe these issues can be taken care of locally.

Action item number five, we need to develop strategic and short-term
strategies for our nation to be competitive in the knowledge-based
global economy, including collaborations with the private sector and
higher education. I know that your recently formed Commission on the
Future of Higher Education is tackling this question, and I look forward
to the initiatives that come forth from these proposed plans. However, I
would caution you to not take a one-size-fits-all approach to
standardized testing as part of these initiatives.

In fulfilling these initiatives, we will advance social and economic
shortcomings that we are facing in higher education. We will be a more
engaged society; we will contribute to the economic prosperity of our
nation, increase productivity, and be even more competitive in the
global economy.

Thank you for your leadership and high resolve to making a difference
for our nation. I hope my comments today will help you in your
decision-making, and understanding of what college students are facing.
Thank you.

**DAVID BERGERON:** Thank you, Andrew.

\[Applause.\]

**DAVID BERGERON:** Andrea Kilroe.

**ANDREA KILROE:** Good morning.

My name is Andrea Kilroe. I am here from Salem State College's SGA
Office.

I am a senior on the brink of graduation this summer, with a bachelor of
science in business with a concentration on entrepreneurship.

While this is a very exciting time for me, the culmination of years of
education, knowledge, and skills being utilized and exposed, I have to
rush to find a job. My first job offer, I will have to take, in
preparation to repay the outlandish loans that I have accumulated.

From one year at the University of Vermont and four at Salem State
College, I have accumulated loans of approximately \$60,000. My \$60,000
in loan debt is not as substantial as others, but, for me, \$60,000 is
disappointing and it is intimidating.

I have been working almost seven days a week, two jobs, for the last
four years to pay for school, housing, and other necessities. That still
was not enough, and I have to rely heavily on loans and financial aid.
Working through college was beneficial on many levels, but it also
limited my involvement in extracurricular activities.

As a member of SGA, I knew that I could not take more responsibility, as
my time was consumed mostly by work and class. My participation in other
groups was constrained, as I only had so much time to give. My college
career was full of worry about how I was going to finance my next
semester, pay for my books, and afford to live.

The stigma with college graduation is you are done with college. It is
time to graduate, start a career, start a family, and live a little; not
for me, and not for most other students. We are looking at entering job
markets starting between \$20-50,000 a year and paying loan debts, as
well as getting a foothold in this world. For me, I am expecting to find
a full-time job and keep one of my two current jobs just to pay off my
loans.

Upon graduation, my hopes are to begin raising capital for my own
business. I wanted a restaurant; however, with my ominous loan
repayments, my reason for obtaining a college education, my dream, has
to be postponed. Not just my dreams are at stake, loans are affecting my
family, as well.

My mother was a child herself when she had me, and did not have the
luxury to save for my future. To this day, I cannot rely on my mother's
income, as she now has two more children, ages seven and eight, to send
through college. She will not only have the advantage to plan in
advance, but nothing she saves will be enough. She will have to rely
heavily on loans, as well. My brothers are going to have to work as
extensively as I have to realize their degree and their dreams.

I am here on behalf of my two brothers and their future college career.
I do not want them or any other student to be limited in the knowledge,
experience, and skills that they can achieve because it resulted in too
much of a financial burden. I want all students to have the luxury of
participating in campus programs to make invaluable connections and
learn how to create change. I want the students in college to have
reassurance that they have the cushion to wait for the right job,
because their loans are not looming so heavily on their conscience.

Representing myself, my brothers, and all students, I ask the government
that is working on behalf of its people to do something about the loan
repayment system. Adopt the five-point affordable education program.
With these changes to the loan programs, student debt would be more
bearable for current and future students. We are not looking for cheaper
colleges and universities, but improvement.

Thank you, and I hope that you will adopt this program.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Julia Benz.

**JULIA BENZ:** I am Julia Benz from the Ohio State University.

With me is Anna Griswald from Penn State University.

We are here today representing the eastern half of the Big Ten financial
aid directors. You saw several of them at the Chicago hearing. They were
represented by Susan Fischer and Dan Mann. They submitted, at that time,
a document that you have as part of your hearing.

The two of us are here today to talk a little bit about the
post-November 1 regulations, and my comments today are focused on a
positive direction negotiated rulemaking could take for the 2008-2009
years and beyond.

The amount of funding currently found in all student aid programs is
insufficient to meet the needs of our students. ACG and SMART Grants are
a step in the right direction to help our neediest students while
furthering the nation's interests in producing qualified students in
academic fields of critical importance.

The Secretary has acknowledged in her responses to comments made to the
community between the interim rules and final rules published November
1, 2006, for the 2006-2007 and the 2007-2008 years that the
administrative burden for implementing the ACG and SMART Grant programs
do not warrant additional administrative cost allowances, since the
programs are intended to parallel the Pell Grant Program in all aspects
of implementation.

My recommendation is to follow through more closely on this concept of
parallelism in order to make eligibility for the new grant programs more
transparent and streamlined for students. Have both the ACG and SMART
Grant share the same rules as the Pell Grant in two very simple areas.
First, all U.S. citizens and eligible non-citizens qualify. Have
continuing eligibility for these need-based grant aid programs
contingent on satisfactory academic progress standards set by schools.
These two small adjustments would go very far in allowing more needy
students to access the programs and to ensure their continuing
eligibility on their date of graduation. Don't implement more barriers
for needy students to accomplish the ultimate goal of getting the
degree.

Now Anna will talk.

**ANNA GRISWALD:** Thank you.

Anna Griswald from Penn State. We appreciate the opportunity to be here
today and offer comments.

As Julia mentioned, our colleagues in the Big Ten institutions have
given some serious consideration to all of the provisions that came out
of HERA, so we appreciate the opportunity to speak to those.

We represent some half million students that are enrolled collectively
across the Big Ten institutions, and we administer, collectively, just
over \$2 billion in federal student aid each year.

What I would like to comment on, and to not be too redundant, is many of
the comments we have heard, especially so well-stated by our students.
Specifically, we acknowledge that, within HERA, we did see an increase
that will go into effect this next year to the borrowing limits to the
freshman and sophomore\--the first two years of student borrowing. While
we are appreciative of this and acknowledge that is certainly a step in
the right direction, we believe this is insufficient and that much more
needs to be done, and we hope the Department will take a lead in
encouraging the opportunity for students to access low-interest loans to
a more sufficient degree.

We also noted that the aggregate borrowing limits within the federal
loan program were not increased concurrently with the increase in the
annual borrowing limits, and we believe that this should be corrected,
and that the aggregate limits also increased. As we talk about student
loans, we talk first; however, about the extreme importance of access,
especially for low-income students and many moderate-income students
today, the Pell Grant program is absolutely essential for that. We would
be remiss not to state very clearly our fundamental and primary support
for everything possible being done to support grants, especially for
low-income students.

Realistically, though, we know that grants will not ever be able to
address the full needs of students. To that end, student loans are where
we must turn. This is not necessarily bad if a program is crafted well.
The concerns shared by my Big Ten colleagues and many of my aid director
colleagues across the country\--and I would add that earlier this year,
about 70 of us met to actually discuss this very issue and concern, and
that is, given the inability to borrow sufficient amounts of money
through the federal loan program, that students in alarmingly large
numbers are turning more and more out of necessity to private education
loans. These are typically far more costly loans to students.

This, I don't believe, was an intended method of proceeding with how
students would finance education, but, in fact, this has occurred. There
are many inequities in allowing this approach to continue, in that
low-income students often are without sufficient family backing in terms
of parents being able to serve as cosigners, or being credit-worthy
enough to borrow through these more consumer-based loans.

The discussion that we had earlier this year among aid administrators,
hearing every day what we just heard from students here today, as we sat
across the desk from them trying to piece it all together, we believe
that it is time and that it is possible for the country to offer one
single loan source. Students are now borrowing from multiple sources
that they have to repay. We believe it is possible to have one single
loan program accessible to all students, regardless of their credit
rating or their parents' ability to cosign, and that such loans can be
of a more reasonable interest rate.

To compliment that, knowing that

students\--and not to encourage students to borrow more, but knowing
that is the necessity for many to compliment this ability to borrow up
to their need, minus any other financial aid, we fully support what we
have heard many of the students say today, that the project on student
debt and its five-point plan for balancing the ability to borrow and
access funds, also with the ability to make reasonable repayment.

So, with that, I will conclude my comments, and we thank you again.

**DAVID BERGERON:** Thank you.

The one comment I want to make is that one thing we can't do with
through regulations is change underlying law. So things like
requirements that students maintain certain GPAs, that students are U.S.
citizens, in the cases of the ACG and National SMART Grant, and loan
limits are statutory provisions, which we cannot change through
regulation, just so people are aware.

**ANNA GRISWALD:** I think it is a matter of record, in the spirit of
also giving input to other issues that, hopefully, will find their way
into reauthorization in the future.

**DAVID BERGERON:** We appreciate that. I just wanted to make sure that
it was on the record that we do not have the authority to change statute
by regulatory actions of the agency.

**DAVID BERGERON:** Robin Polo.

**ROBIN POLO:** Good morning.

My name is Robin Polo, and I am a sophomore at Rutgers University.

I would just like to start out with expressing my appreciation for you
guys taking time out of your hectic schedules to listen to our petitions
in regard to student loan debt.

I am here today not only to suggest manageable alternatives to the
current student loan debt programs, but to help you match a statistic to
a face. I am the first in my family fortunate enough to be at the
university level, yet, on a daily basis, I struggle with the idea on how
much student loan debt I am anticipating to graduate with, approximately
\$50,000. This number shakes me so much that I am constantly considering
dropping out of school, just because I do not see how I can manage these
loans after graduation.

I, like many of us here today, fully support myself. I had it tough
growing up, so my reality is that I have no choice but to fund my entire
education with student aid, mostly in the form of loans.

So, to educate myself or not to educate myself? This is a question that
turns through the minds of high school seniors everywhere\--the fact
that students are unable to pay for their higher education, and the fact
that we will not be able to manage graduating without outrageous debts
prevents millions every year from attending universities. I still answer
this question by choosing to go to college despite the burden.

Herbert Spencer said, "The great aim of education is not knowledge, but
action." I believe this 100 percent. If I am denied or discouraged
financially to the point that I, too, feel that there is no choice but
to prematurely end my college experience, I might as well fall asleep
and never wake up. I will be giving up a dream of equality and justice
and other principles I care very deeply about, and I know that a college
degree will help me maintain that.

But here I am, still in college. At Rutgers, I have developed a deep
passion for two things: I want to help people, and I love the theater
arts. I would love to go into education. I would love to go overseas and
teach English. I would love to travel to places whose communities are in
severe need of aid and assistance, and that includes here as well as
abroad. I would love to use theater as a means to influence the minds of
today so that they may look on social issues and find them as alarming
as they really are, as well as help people find compassion for those of
us who are suffering these issues.

I would love to teach in inner city schools and inspire young people
through the arts. I would love to help mold the personalities of our
future generations so that they may think in a way that would benefit
themselves and others without having to sacrifice their individuality or
voice. I could go in any direction, obviously, but then there is the
reality of any one of these paths once I graduate, the low starting
salary and the high debt burden I will carry.

The question that I have not received an answer to thus far is, "How I
am going to be able to take positive action in my society under these
circumstances?" Can I afford to do it? Will I be consumed with debt, or
will I be able to make it? Right now, some loans can tie the monthly
repayment to monthly earnings, but others don't. Can I go in the
direction that I want to go in, or will I have to choose otherwise?

Even now, as a full-time student, I have to work full-time on top of the
debt that I am accumulating. Think of how many students are in similar
positions, and how much community involvement and potential is being
suppressed by those of us who have the strength and the energy in the
prime of our lives to accomplish great things, but no time in which to
do so.

I know the U.S. Department of Education wants to promote higher
education and be encouraging to our future generation, but, right now,
all the cutbacks and rate hikes communicate the opposite. The government
is becoming an obstacle in itself to our ability to succeed.

So I ask that you hear me out on these suggestions. First of all,
increase the attainability of loans for those students who do not have
anyone to cosign for them. Lower the age for students to be declared
independent so their parents' income is not factored into their aid
package.

Second, allow loans to be forgiven after 20 years if borrowers have met
their contractual obligations. Sometimes borrowers won't be earning the
higher salaries, and the loans simply should be forgiven when that
happens.

Third, take into consideration the field of work in which a college
graduate is going into and adjust the loan payment according to their
expected income. Make sure this provision is included in all the federal
loan programs, not just one or two.

In conclusion, by giving back to the students through more manageable
loan rules, we will be able to be strong members of society, and we will
be able to think less about ourselves and more about others. I believe
so strongly in education, and not only what it can do for me as an
individual, but what it can allow me to provide back to my community.
Help me, and I will help you.

Thank you.

**DAVID BERGERON:** Thank you, Robin.

**DAVID BERGERON:** Rosario Matos.

**ROSARIO MATOS:** Good morning.

My name is Rosario Matos, and I am a sophomore from Rutgers University
in New Brunswick, New Jersey. I have traveled all this way to urge the
Department of Education to do the right thing and ensure that loan
repayment terms for college students are fair and manageable.

As a young woman looking to the life ahead of me, a life of financial
struggle and loan repayment, I decided to take action by first
testifying before you today. Secondly, I volunteer on campus to get my
student government, student leaders, and other to get involved on campus
around college affordability issues.

We have held photo shoots throughout New Jersey on public college
campuses to create the New Jersey Student Debt Yearbook. It is a
personal account of hundreds of students from New Jersey who have had
loan debt and who think it is becoming unaffordable. I have only made
one copy, but you can see it and over 4,000 other students at
www.studentdebtalert.com.

We have also held numerous events, such as department awareness
informational sessions, and conducted editorial writing to local and
statewide newspapers. At the end of the semester, I am inviting several
local political representatives to speak about student loan debt on
campus. This will not only shine more light on the issue, but also
encourage and increase the political mindset on our college campuses.

Personally, through my volunteering, I have become involved on a grander
scale with New Jersey and federal politics, because of how closely we
must work with these institutions to get the change we seek. I have
become a political animal.

\[Laughter.\]

**ROSARIO MATOS:** Just yesterday, I voted for the first time. I don't
know how I would ever know my own power as a citizen if it were not for
the experiences I have gotten in college getting involved. No one can
deny the importance of the college experience to the success of an
individual and the environment in which he or she lives. Colleges expose
students to new perspectives as they come into contact with fellow
students from around the world. Universities provide the breeding ground
for intellectual pursuit and social advancement.

These are the reasons why it is important for every person to have an
equal opportunity to further their education. It is funny how university
students can do so many things, but why is it hard for the average Joe
Somebody to attain a degree?

As a college student, I know all too well the pressure involved in
producing the thousands of dollars each year I need to pay for my
education. This past year, as a work study student, I worked
fifteen-and-a-half hours a week to ensure that I would have enough money
to pay for high-priced textbooks, train tickets home, food, school
supplies, and other daily living expenses. I work hard during the
summers to raise the money needed for this current semester.
Unfortunately, I have no way to come up with the additional \$3,000 I
need to pay for my spring semester at Rutgers, taking out an additional
loan is my only option.

In the future, I want to see the world and study ancient peoples as an
archaeologist, because I think only with a solid understanding of our
past can we move forward in the most thoughtful way as a society.
Archaeologists don't exactly bank the big bills, and, on top of this,
many years of graduate and post-graduate study are needed. This means
more money for school and growing debt. Every day I wonder if I should
keep on the same track or just give it all up because it is so
expensive.

My roommate, Mary Rose Bartholomay Fabara is pursuing a career in social
work. We both know that the thousands of dollars she owes in loans will
be disadvantageous, as social workers get only enough in wages to scrape
by. Adding large monthly payments, along with low wages, will increase
the stress level in her life in the coming future, even as she acts to
relieve the stress of others. Mary Rose must, too, decide if becoming a
social worker is worth such high financial costs.

It is unfair that the people we need in our society most, such as
teachers, social workers, and humanitarian workers are compelled to
switch careers because of loan debt. Loans are an essential means of
funding a college education, but the benefits might be outweighed by the
job acts, as they hinder students from going into the careers that our
society needs.

Loan payment options are limited. As it stands now, some loans do not
take into consideration current financial situation, nor family
situation. Instead, the loan programs slam a borrower with a flat 6.8
percent interest rate months after college ends and must be paid. While
the best solution to this problem would be to increase federal aid
programs like the Pell Grant, it is not possible for the Department of
Education to do this without congressional approval. What the Department
of Education can do is to adopt the five-point plan being endorsed by
the student groups, like New Jersey PIRG, across the nation.

We students need more incentives to continue our education on the right
track, such as monthly income and family size being taken into account
when calculating monthly payments. Please help ensure that loan
repayment becomes fair and more manageable.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Michael Shawe.

**MICHAEL SHAWE:** Hello.

I am Mike Shawe, and I am Rutgers University student.

I want to be a journalist. I want to be one of those independent
investigative reporters who exposes corruption and reaffirms the
American democracy, but I am going to have great difficulty pursuing
this important profession, because, by the time I finish my undergrad
work, I will be over \$35,000 in debt, with approximately \$20,000 of
that being private loans. I get no financial assistance from my family,
despite the fact that their income counts toward the type of aid that I
qualify for. I am going to be drowning in solitary debt.

Last year, the state of New Jersey cut the Rutgers budget drastically,
giving up tuition and fees and forcing us to rely even more heavily on
loans to pay for college. At the same time, Congress cut the student
loan program by \$12 billion. Thus, in New Jersey, it is becoming
financially impossible to even attempt to get where you want to be
through a college degree.

Higher education funding should be restored, and college loans should be
made more affordable for several reasons. Higher education is the best
weapon against poverty. If you want to fix poverty in America, then
educate the poor. Give them opportunities to climb out of the hopeless
cycle of poverty and they will not disappoint. If it were not for the
federal and state aid that I get, then students like me would not be in
college, but that aid is not going as far as it used to.

Second, an educated and informed public is the greatest weapon against
tyranny. If we allow the federal funding to erode further, the poor or
even middle class families will be unable to attend college. And if
college is only populated by a few rich patrons, then that threatens one
of the assumptions of our Founding Fathers to defend democracy, which is
that the masses be informed and educated.

I cannot imagine who I would be if it were not for the fact that I am in
college and that I am able to take advantage of all the resources there.
I have learned to respect authority, but to also challenge injustice at
every turn. I have become an intelligent, self-sufficient participant in
the community and the marketplace. I have learned to reach out, now that
I see that the American ideal of everybody getting equal chance to work
towards success is possible. College honestly and truly saved my life. I
have transformed from a silent victim into a hard-working American who
wants to give back.

What you get by investing federal dollars is real results. You have the
chance to make this country better by simply assisting students who are
paying more than their fair share of college tuition by making our loans
more affordable. If you make these rule changes, we will respond with
hope, and believe me, we will not disappoint.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Andrew Friedson.

**ANDREW FRIEDSON:** Good morning.

**DAVID BERGERON:** Good morning.

**ANDREW FRIEDSON:** My name is Andrew Friedson. I am a junior at the
University of Maryland, College Park.

Good morning. Thank you for convening these hearings on how to make
college affordable. I appreciate the opportunity to bring testimony.

As you know, in February, Congress finalized passage of a bill that cuts
almost \$12 billion of aid from the student loan programs. This funding
cut, accompanied by rising tuition, has made it increasing difficult for
our generation to pursue higher education degrees.

As the Director of Governmental Affairs for the Student Government
Association at the University of Maryland, College Park, I propose that
the U.S. Department of Education negotiated rulemaking process must aim
to make student loan repayment rules more fair and manageable.

The word "university" comes from the Latin "universus," which means
"whole," "aggregate," "entire." Too often, we get so caught up in
curricular pursuits that we forget about how pivotal co-curricular and
extracurricular activities are to one's education. The idea of being
whole, or well-rounded, as we commonly say, implies the opportunity to
engage in activities outside of, and alongside, book and classroom
activities. In my view, they are the very thing that sets the
undergraduate college experience apart from secondary school graduate
and post-graduate experiences.

The rising costs and deepening debt are stopping students from these key
opportunities. Take my friend Lynne, for instance. She attended Albright
College for a semester. Although Lynne loved Albright College, its
\$36,000 and rising tuition proposed such a burden on her after
graduation that she decided to transfer to the University of Maryland.
Several credits did not transfer over, so now she is forced to take a
significantly heavier course load. She receives a Stafford Loan, which
does not cover her full tuition, and caused her to take out additional
private loans for her to be able to stay in college.

Aside from her six classes, Lynne is forced to work two jobs to cut her
tuition costs and put her in a position to pay off her loans after
graduation. Needless to say, Lynne has no opportunities to engage in any
extracurricular activities, and has a difficult time aggressively
pursuing her academics because of how strapped she is for time and
energy.

Unfortunately, Lynne is not an exceptional case at all. Countless
students face the same circumstances. Meanwhile, at the same time Lynne
is struggling, I have taken full advantage of my college years by
working hard in the classroom while participating in numerous
extracurricular activities. I could not imagine my time at the
University of Maryland without the plethora of extracurricular
possibilities readily available to me.

Along with my participation in student government, I am also an active
executive board member of a fraternity, which has enabled me to become
Chief Justice of the entire Inter-fraternity Council. I formally served
on the Dean's Student Advisory Council for my college, where I met
regularly with the Assistant Dean to discuss how to better the college
for students. In that capacity, I also served on the committee to select
the commencement speaker for fall graduation, and made recommendations
to the Dean on how to appropriate the over \$300,000-plus technology fee
money the college receives from the Provost.

As a member of the university senate last year, I had the opportunity to
meet with faculty members, deans, and administrators, including the
university President, Provost, and President's Cabinet. These
experiences have allowed me the opportunity to pursue my full
educational potential. These invaluable skills of interviewing and being
interviewed, meeting with and persuading administrators and faculty, and
even lobbying before you today are educational experiences which cannot
be learned in a classroom, and simply cannot be substituted.

Unfortunately, over one-third of my cohorts are more like Lynne and less
like me. Though they take my same midterm and final exams and hear the
same lectures, they do not share my same pedagogical opportunities. The
only difference is that I can afford the tuition bill and they simply
cannot.

Due to loan debt, rather than learning their way through college, these
students are working their way through it, and this is just something
that is sad. Work, of course, is not always a bad thing; however, I
strongly believe that university students, the best and brightest of our
young adult population, should have the mobility to decide where, and
whether, they will work.

For instance, the past three jobs I have taken were as an intern in the
Maryland House of Delegates as a deputy field director of a local
campaign, and as a congressional intern in the Whip's office. The
ability to take advantage of these unpaid internships has given me more
than just work experience or something to put on my resume. In fact, I
walk away from these experiences with skills, connections, and a
constantly renewing passion for civil service. The same skills,
connections, and deepening social commitment are most likely not earned
by the large number of students working 30-plus hours a week just to
minimize their loan debt.

Most disheartening to me, perhaps, is the number of young people who
could be at the University of Maryland or similar schools, but cannot
afford to do so because of the high cost. Among the 400,000 college
eligible high school graduates who are forced not to attend college are
many bright individuals who could be my classmates. Regrettably, I will
never have the privilege to meet, study, and work with these bright
individuals. Countless students, those who could be the next university
president, the next editor of the campus newspaper, or, eventually, a
scientist, surgeon, entrepreneur, or politician lack the opportunity to
reach their full potential.

Although my hopes for change may seem selfless, I must admit that I plan
to attend law school, and that I will need to take out loans to pay for
it. However, I also have other goals that conflict with this one, given
the current loan repayment rules. I would like to work in the public
sector at some point after pursuing a law degree. I have contemplated
applying for Teach for America, working at a non-profit, or perhaps
working for, or as, a public defender.

Although programs like Teach for America offer a stipend for graduate
school or professional school, they do not mitigate the incredible
burden that debt will cause. Working at a non-profit or with a public
defender will fail to put me in a realistic position to pay off my
loans.

We need to fix our system so we are not discouraging participation in
public sector jobs, but are encouraging and promoting it. A young
passionate person should never be denied the ability to give back to
society because of his or her loan debt.

I recognize that the Department lacks the ability to overturn the Budget
Reconciliation Plan passed by Congress in February, which would be a
huge step in making loans more manageable. However, there are still
changes within the scope of the Department's power that can be made to
the student loan repayment program that will reduce the hardships placed
on borrowers. I urge the United States Department of Education to adopt
the five-point plan for manageable student loan debt. We must view our
educational system, both K-12 and higher education, as the greatest
education that our society can make in its future. Better than bonds,
and stocks, and real estate, attaining a college degree is the best way
to ensure that the future of our nation is secure.

The student loan program has helped millions of students get to that
future, but it is starting to have detrimental consequences. In order to
have a return on the education investment for which the student loan
program was designed, we must allow borrowers a chance to repay their
loans and give back to society in a fair and manageable fashion. If only
we could accomplish that, all of society succeeds.

I appreciate you giving me the opportunity to speak on this important
issue, and your understanding that we need to improve the current loan
debt situation. Thank you.

**DAVID BERGERON:** Thank you.

**DAN MADZELAN:** Thank you.

**DAVID BERGERON:** Emma Simpson.

**EMMA SIMPSON:** Good morning.

My name is Emma Simpson, and I am the President of the Student Body at
the University of Maryland, College Park, the state's flagship
institution.

Before I begin, I would like to thank you for having this hearing this
morning. I knew that I walked into the right place and I am testifying
to the right group when, on the wall, the mission says that it is here
to create equal access to education.

Making two-year and four-year institutions accessible to all students is
critical. An educated work force has been credited for much of our
country's economic prosperity over the past century. For Maryland, in
particular, a 2001 study showed that the University System of Maryland,
which includes 11 public institutions, is responsible for billions of
dollars in additional state revenue due to graduates' increased
earnings. I am sure you have heard those numbers before, and most people
can probably agree on the importance of higher education. Instead, it
comes down to a numbers issue.

As I proceed with my testimony, I want to stress that higher education
is an investment. The more money that is put in now, the more it will
pay off in the long run. A 2005 study titled "The Value of Higher
Education: Individual and Societal Benefits" documents the numerous
individual, community, and general societal benefits associated with an
educated work force. For example, investing in today's students is
likely to increase the probability that their own children will go to
college and increase the economy's output and income when they enter the
work force themselves.

If, however, the cost of a college education becomes too burdensome, I
fear we will see negative consequences. For one thing, I am concerned it
will lead to a substantial decrease in public service. Personally, I am
in the International Development and Conflict Management Program at the
University of Maryland, with a group of my three peers that highly value
public service, but I have been disappointed as senior year goes on, and
as friends are searching for jobs, to hear how many of them talk about
finding the highest paid jobs so that they can pay off their loans.

My boyfriend serves as a perfect example. For the past three years, he
has talked about going into public interest work, but now, as he is
planning to take on tons of loans for law school, he has told me
recently that public interest law is not profitable enough to pay off
loans and raise a family.

I am also concerned that, with tuition rates on the rise, the share of
income put towards debt payments will become too great and leave many
recent graduates in poor financial situations. My parents did not pay
off their student loans until they were well into their 40s, the result
of paying for four years of college, professional school and, of course,
kids. Aside from \$1,000 they managed to stash away for me, and \$1,000
for each of my siblings when we were born, my parents did not have the
chance to invest until they were in their 50s. This is dangerous for an
ownership society.

Before I conclude, I would like to provide a brief overview of the
situation at Maryland. Over the past few years, tuition has increased by
44 percent. In one year alone, there was a tuition increase at the start
of the academic year, and then one halfway through the year. A girl
living on my floor had to move back to her parents' house to afford
school, and a second one on my hall had to drop out completely because
of cost.

While we are still a state school, and considerably more affordable than
private schools, no parent can call it cheap. College Park's tuition,
textbook prices, mandatory fees, and room and board now amount to
\$20,303 per year for in-state students, and \$33,742 per year for
out-of-state students. For parents of in-state students, our university
is probably the best option, yet that is still a price tag of \$82,000
for four years. Loans are necessary for many students to cover the
costs, yet we are all taught about the dangers of being in debt.

To avoid massive amounts of debt when they graduate, many students work
one or two jobs during the school year. While there is conflicting
research on the actual impact of employment on academic achievement,
there is an important difference to note in the types of employment.

This year I am serving as the Student Body President, a role that takes
30-50 hours a week. It is an extremely stressful role, and I do not get
paid, but my position will pay off endlessly with the skills I have
acquired and the experiences I bring to the table. For students who are
forced to find paid work, there are few paying jobs that will give them
the leg up in the career field. The student with a job at the campus
recreation center or the dining hall will not compare to the student who
has an unpaid internship at the Smithsonian Institution or an
undergraduate research position with a professor.

I have been an undergraduate teaching assistant for two government
courses. I have co-taught a freshman introductory course for two years.
I was a policy intern at an advocacy organization in Washington, D.C. I
was the President of the Student Global AIDS Campaign on campus for two
years, and I served on the National Steering Committee. I was the Vice
President of Academic Affairs for the SGA, and now I am the Student Body
President. These are educational and leadership opportunities I have had
because I have not had to pay for college and because my parents could
afford the costs of education.

For many students, however, these opportunities are not available. We
pride ourselves on providing equal opportunities, but I can recognize
the tremendous privileges I have had because of my ability to go through
college without mounting debt, and my ability to take on unpaid
positions.

Thus, I am here today not to advocate on my behalf, but on behalf of the
10,000 or so students at Maryland who will graduate with debt. I urge
you to support the five-point plan for making the cost of college more
manageable. It will have an incredible impact on these 10,000 students
at Maryland, the students at numerous other institutions, and society at
large.

Thank you.

**DAVID BERGERON:** Thank you, Emma.

With that, we have concluded the list of witnesses that we have for this
morning. We will reconvene at quarter to 1:00? 1:00? 1:00.

I am looking at my director over in the corner. Thank you, Mary.

**DAN MADZELAN:** Always check with the boss.

**DAVID BERGERON:** So we will reconvene at 1:00. Thank you all.

\[Recess for lunch at 11:54 a.m.\]

AFTERNOON SESSION

\[1:05 p.m.\]

**DAVID BERGERON:** We are going to get started in just a minute.
Actually, we are about three minutes late, which I hate to be three
minutes late when we start the afternoon, but I think we are going to be
fine.

We have witnesses signed up until about 3:50 at this point, so we
actually may be done by 4:00, which, if you asked me at the start of the
day if would get that point by that time\--but we will be pretty close,
I think, to completing at the end of the day.

Our first witness this afternoon is going to be Constantine Curris.

**CONSTANTINE CURRIS:** Thank you very much.

I am pleased, as President of the American Association of State Colleges
and Universities to have this opportunity to comment on several issues
of major concern to our membership, which includes 430 public colleges
and universities and higher education systems.

Prior to assuming the ASCU presidency in 1999, I had the privilege to
serve as a university president at three institutions, beginning in
1973. During my 33 years in higher education, many changes, many of them
good, have occurred, but none has been more damaging to students and
their families, and, I believe, to the nation as a whole, then the
extraordinary rise in student indebtedness.

Today, that indebtedness retards our longstanding goal of ensuring
access and opportunity, as well as impacting the career choices and
economic opportunities for our graduates. We have created a new debtor
class, our graduates, and its ranks are swelling.

The causes for this unfortunate development are many, and there is no
single or simple solution, but several of the steps to address the
problem of excessive, onerous indebtedness can be addressed by the
United States Department of Education through these negotiated
rulemaking procedures and the decisions that will follow.

One of ASCU's major concerns on behalf of borrowers in the loan program
is the lack of repayment provisions that allow borrowers maximum
flexibility relative to their incomes and the size of their debt. We
understand that, while graduates from the past five years have, on
average, experienced extraordinary difficulty in repaying their loans.
Nevertheless, as college costs, amounts borrowed, and interest rates
have recently increased and are increasing, a growing proportion of
borrowers will not be able to manage their debt under traditional
repayment plans.

We call attention to the proposals of the project on student debt to
make loan repayment more manageable and equitable. We believe that the
income-contingent repayment program and economic hardship deferments are
solutions that should be widely and easily available for borrowers whose
debt-to-income ratio has made it impossible for them to repay on more
traditional amortization plans. We urge the Department to work with the
higher education and lending communities to make information about these
additional repayment plans more widely available.

Secondly, as you may know, ASCU has endorsed the recommendations of the
Secretary's Commission on the Future of Higher Education. We are
committed to accountability to the public as emphasized in the
Commission Report. That report clearly asserts that continued public
support is not automatic, but would be contingent upon our
responsiveness to the educational needs of our fellow citizens, and our
assistance to the states and the nation in this critical time of
economic and social readjustment.

Regardless of the data system used to collect information about our
students and our institutions, we strongly urge the Department to make
much needed changes to the outcomes data now collected in the form of
graduation rates. The definition of graduation rates mandated in the
statutes and regulations is outmoded, and has been overtaken by changing
student populations. The number of part-time and older students on our
campuses has grown considerably during the last generation. At the same
time, alternative attendance patterns related to life and career choices
have emerged, giving rise to terms such as "stopping out," and to
patterns such as students attaining associate degrees after they
completed their baccalaureate. What is currently collected has virtually
no validity and, in truth, its publication misleads the public.

We believe the Department has the necessary authority to modify its
current requirements for institutional reporting in this area, and still
meet the minimum requirements of the statute and regulations. ASCU
believes that colleges and universities have a responsibility to
communicate clearly and effectively about their stewardship of the
public's investment in them. Policymakers and the general public need
better data and more meaningful information, not simply more data.

ASCU supports amendments to the Higher Education Act that would require
public disclosure and dissemination of findings from final accreditation
reports. Additionally, ASCU encourages the regional accrediting agencies
to broadly communicate their initiatives in assessing student learning.
As you may know, ASCU, in collaboration with our sister association has
embraced a voluntary institution accountability project to measure
student learning in the context of what we add in terms of value, and
how we can strengthen the undergraduate process.

The Department has announced that the first panel of negotiated
rulemaking will be on the Academic Competitiveness Grant and the
National SMART Grant Program. ASCU has joined with the University of New
York in submitting recommended improvements to the final regulations,
and we believe those comments should inform the discussion of the first
panel, and have proposed in a separate letter that Mr. George Chin,
University Director of Student Financial Aid at SUNY be selected as one
of the negotiators. We support the Department's efforts to implement the
programs quickly and with needed revisions, as those that we have
proposed.

Lastly, we commend to the Department's recommendations from the
Commission on the Future of Higher Education, calling for significant
increases in appropriations for the Pell Grant Program and for
restructuring student aid programs to focus resources on assisting those
students with serious financial need.

I appreciate the opportunity to share these concerns with you, and
pledge our continued constructive engagement. Thank you.

Number range CHAPTER **DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Dina Zarella.

**DINA ZARELLA:** Good afternoon.

My name is Dina Zarella. I am a social worker at the National
Association of Social Workers, and serve there as a senior field
organizer in our Government Relations and Political Action Department.

NASW is pleased to submit comments to the Department of Education
regarding this negotiated rulemaking. Founded in 1955, NASW seeks to
enhance the well being of individuals, families, and communities through
its work and advocacy. NASW has long advocated for client's rights,
self-determination, and client-centered care.

NASW urges you to address the issue of fair student loan repayment.
Reducing debt burden is both an area where you have the authority to
regulate, and it is an issue that your Commission on the Future of
Higher Education identified as a priority.

As the world's largest association of professional social workers, with
150,000, NASW has members across the United States who struggle to
maintain their social work careers while repaying their burdensome loan
debt.

Social workers enter the profession to make a difference in their
communities, but too many of them have to move away from this career in
order to pay for their schooling and raise their families. Social
workers experience loan debt in a way many other advanced degree
professionals do not. For many social work jobs, you need a master's
degree to even qualify. Bachelor's level social workers in a study for
2004 and 2005 were shown to have an average loan debt of \$18,609,
master's level had an average loan debt of \$26,777, and doctoral level
social workers have an average loan debt of \$32,841.

In 2001, the median salary of social workers with 2-4 years of
experience was only \$35,600. Over 20 percent of social workers make
less than \$30,000 a year. As you can see, comfortably repaying loans
well over \$18,000 is quite difficult for new and experienced social
works who may make less money than most equally educated professionals
in much more lucrative careers. Social workers provide services to
people of all income ranges and in all communities across the country.
If we want to maintain a high level of training for these crucial
professionals, we need to find ways to remove the barrier of burdensome
loan debt so that they can serve their client base.

Unfortunately, the tools that are supposed to assist borrowers with
payments on federal loans are inadequate, confusing, and
inconsistent\--too often providing the wrong incentives. Without
improved protections for borrowers, the nation may see an increase in
default and bankruptcies, rather than an increase in more productive
graduates who can contribute fully to society.

After four years of undergraduate studies and two years of graduate
studies, I entered the social work workforce with over \$40,000 in loan
debt and a starting salary of \$22,000 a year. With interest over ten
years, I would pay double that amount back. I lived in Philadelphia at
the time, and my monthly \$600 loan debt payments ate up half of my take
home salary. It was difficult to find adequate housing and to cover my
basic needs on the remaining \$600 per month. Within six months, I moved
back in with my parents in Chicago to restart my job search process. My
first job in Chicago paid slightly more, at \$25,000 a year. I lived at
home for several months before I was able to afford a studio apartment.
I am one of the fortunate ones, because my parents were able to help
support me during my early career, but for too many social workers,
particularly mid-career returning social workers, this is not possible.

Over the years, NASW has collected stories from social workers who are
desperately trying to repay their loans, and I have a few of them here I
want to share.

"The \$700 a month that my wife and I paid to the government for our
student loans and will pay over the next 30 years is money that inhibits
us from living better lives for us and our own children. This is true
even as we help many others to live better lives. My wife and I both
have master's degrees, and we both rehabilitate people with a degree of
measurable success, and we still, for example, live in a mobile home
with our three children. We didn't get the degrees in order to get a
better financial life. We got the degrees in our fields of expertise in
order to help make the world a better place."

Another social worker says:

"I am a child welfare social worker at a child family and services
agency. I received my MSW, master's degree in social work, in 1997 from
Howard University. My student loan debt is now up to over \$70,000, and
I am struggling to repay."

A licensed social worker in the state of West Virginia talks about
having worked in the field for 13 years, and then completing her MSW
degree. Social workers work in many fields and many different positions,
and I don't know any social worker, be it a child welfare worker, or
geriatric worker, hospital social worker, et cetera, who makes enough
money to easily pay back the loans they have incurred to further their
education.

"I know that I am going to have a loan balance of \$20-30,000 to pay off
when I graduate next May from my program, and I will not make enough
money to adequately address my bills, but I still plan on working in the
field."

Another social worker talks about being a graduate of Temple University:

"I completed the social work program in 2002 and earned a BSW, a
bachelor's in social work degree. I have worked in the child welfare
system for four years, and am currently seeking assistance with loan
forgiveness programs as I am struggling to pay my student loan. I have
been accepted into a master's program to obtain my MSW, but am putting
that off due to my current loans."

As you can hear from these individual stories, these are the types of
people we want and need to be serving our children, our parents, and our
communities. They will better be able to do so if provided reasonable
loan repayment options.

NASW concurs with the five-point plan presented to the Department of
Education in May, including limiting student loan payments to a
reasonable percentage of income to 10 percent, and never more than 15
percent of income, recognizing that borrowers with children have less
income available for student loan payments, preventing added interest
from making the problem even worse when borrowers face hardship
situations, canceling remaining debts when borrowers have made income
payments for 20 years, and simplifying the process of applying for
hardship deferrals.

NASW urges you to include these proposals in the upcoming negotiated
rulemaking. Our nation's economic future depends on the education of our
citizenry, and student loans have become an embedded part of the
financing system for training beyond high school. Given the important
role of loans in making it possible to attend and complete college, it
is incumbent upon us to ensure that loan repayments are not unfairly
excessive. If NASW may be of additional assistance, please do not
hesitate to contact me.

Thank you so much for allowing me to present this testimony and for
examining this critical issue.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Brandon Lozeau.

**BRANDON LOZEAU:** Hello. I would like to thank you for letting us come
today.

My name is Brandon Lozeau. I am a student at the University of
Massachusetts at Dartmouth, and I am a senior double majoring in
political science and French, with a minor in economics, and also
working on a certificate in international marketing in French.

My family and I are all too familiar with student loans and the
financial burden that they are placing on my future and the futures of
so many other students who can't afford to self-finance a postsecondary
education. As difficult as carrying debt is for me, it is more
unfortunate that there are thousands of families out there who do not
have the financial means of even sending their child to a college or
university. The U.S. Government and the Department of Education must
work harder and implement policies that will allow for easier loan
repayment and more affordable access to higher education in this
country.

I will be graduating from my university with more than \$50,000 in
student loans, and I actually plan on going to grad school, which is
going to cost me another \$30,000. The interest rates on my loans have
added more than \$5,000 to the amount that I must repay when I exit
school. For years, I have been interested in government and the public
sector, because I have come to realize how much government affects the
daily lives of millions of people in this country every day. I feel as
though my knowledge and skills would be so useful in the public arena,
but the fact remains that I will not be able to afford to take a job
that I would love because of the financial constraints that student
loans have placed on me over the last three-and-a-half years in
matriculation.

Just the other day, I read an article that stated, "The average annual
starting salaries for students graduating with a four-year degree in
political science have increased only one percent in the last year, to a
little more than \$33,000 a year." If one subtracts housing costs,
transportation costs, and other survival costs, there isn't much left
over to pay off the crippling student loans. It seems our system for
paying for college is now actively discouraging the next generation from
using our skills to get involved and give back to the community. I think
that runs against what a college degree should be about.

In America, we put so much emphasis on attending colleges and
universities after attending secondary school because it is supposed to
be the gateway to opportunity and advancement for our country as a
whole. Like so many other things, actions speak louder than words. Every
student should have equal access to higher education in this country.
The Department of Education can provide student loan repayment
incentives to enter jobs that do not necessarily attain high salaries,
but are a great social benefit, like teachers, social workers, and
positions in other public service sectors. And, of course, you can adopt
the five-point plan for manageable debt that is promoted by many student
groups here today and other coalition organizations.

In the realm of education, not enough emphasis is placed on the
importance of higher education and making it a universal right. Every
child in the United States has the right to a K-12 education, but there
should be a similar guarantee for higher education, as well. Attending a
college or university should be something students see as a natural next
step in their development as a human being. A person who wants to better
him or herself, their career opportunities, and their country by taking
full advantage of all the educational opportunities that this country
has to offer, should not view entrance into the realm of higher
education as financial suicide.

So many potential students could enter higher education with more aid in
the form of grants, repayment incentives, and lower interest rates on
student loans. I strongly encourage the Department of Education to
implement policies that will grant the opportunity of a higher education
to all who want one, not to just those who can afford one.

Thank you for your time.

**DAVID BERGERON:** Thank you, Brandon.

**DAVID BERGERON:** Nick Nuar\--did I get anywhere close to right with
your name?

**NICK NUAR:** Pretty close.

Hi, I am Nick Nuar. I am here from Rutgers University in Camden, coming
on behalf of NJPIRG, and with the support of the Student Government
Association.

I am here to testify on the value of higher education funding, what it
means to me, and what it means to the future.

This Administration and the President have a vision when it comes to
education. President Bush has referred to reading as the new civil
right. He understands the impact of strong thinkers, accountable
education, and empowered market participants for the future of our
country.

There is a lot of positive talk, and we are here today to suggest that
you follow up with the right actions. Many of us are concerned that the
recent congressional cuts to higher education loan programs are not a
step in the right direction. With globalization, especially, it is
important for America to have citizens that understand and can compete
in the global economy.

The past 200 years have been good to the United States of America;
however, we must work hard, think creatively, and face emerging
challenges to continue to prosper. Getting more people into college and
graduated is the best chance we have for our country to remain durable.

My college story begins years ago. When I started school, I had some
family support. My family could not continue to help me out after my
first year at school, and the financial aid I could qualify for was not
enough. I had to drop out at the beginning of my second year. I worked
full-time as a mechanic, a tow truck driver, and at an insurance
company. The next year I tried working full-time while going to school.
I have friends who have pulled this feat off, but for me it did not
work, and my health suffered. In the end, it was not sensible to make
money or progress through school. I ended up moving back in with my
father and going to Rutgers in Camden. I have worked hard and
persevered, and now, several more years than I planned on, I have
\$30,000 in debt, but I also have a physics degree.

My education has been great. Thanks to the knowledge I learned and
encouragement from professors, I recently presented a poster at the
American Association of Physics Teachers. It was about 3-D scanners in
high schools as a fun way to interest kids in math and physics concepts.
A professor there asked me to modify my system so that I could do a scan
for armor dynamics, a new kind of lightweight body armor that will
protect troops and civilians. I am still looking for a full-time job,
and this is a positive development for my career. Beyond my career, many
will benefit from this innovation.

I am convinced that physics has taught me how to think keenly and solve
hard problems. It is probably the most difficult thing that I have done
and, to me, a proper right of manhood. As a result, I am ready to take
on some of the big challenges American society will be facing.

But you don't need a physics degree to recognize that the 21^st^ Century
is being driven by productivity gains, new medicines, energy-efficient
technology, and other innovations, like 3-D scanners. These are all
possible because of the educated pool of talent that we can draw on. The
future depends on solving hard technical problems and backing it up with
feasible political solutions.

Many high profile economists, like Samuel Keynes, disagree on the
specific role that government should play and the ideal size of the
government. They seem to be unanimous, however, in the long-term
economic benefits of education. In its cost benefit analysis\--if you
will bear with me as I share some very basic numbers, not as nuanced as
the Department already has, I am sure. The Texas Commission on Higher
Education, in its cost benefit analysis, found a thirteen-fold return
when the Texas government invests extra dollars in college education.

When I consider all the other benefits like the internal freedom of
graduates, also that we become more informed and engaged citizens, that
we make local economies stronger, and that we build a stronger tax base
for federal and state budgets through our income. I am even more firmly
in my belief that one place where the government should invest is
education.

Please enhance our investment by making universities more accessible and
costs more manageable. Thank you for your time.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Kerrin Forgette.

**KERRIN FORGETTE:** My name is Kerrin Forgette, and I am here on behalf
of MassPIRG at the University of Massachusetts, Dartmouth.

I am just beginning to figure out what the rest of my life might look
like, and, although it is sad to say, money is a huge factor in the
decisions that I make.

Ever since I can remember, it was always understood that I would go to
college. It was also understood that, unless I won the lottery, or an
equivalent in scholarships, I would be attending a state school. I could
not understand why I should have to go to such an expensive school and
start my life with thousands of dollars of debt. So I opted to go to the
least expensive school that would suit my needs. After only a year of
that my parents could not afford the costs, so we took out student
loans. My plan had backfired. I barely had one foot into the so-called
"real world," and I already owed money, and I would owe a lot more
before I would graduate.

My whole life I watched my parents struggle through their debt. I don't
even think student loans were a factor in the money that they owed,
which really scares me. Their debt is just from the everyday living
expenses of raising a family. By the time I am their age, I will
probably be burdened by the same expenses, plus the cost of my
schooling. I don't want to have to fight through my life to pay off the
money I owe, and I know they don't want that for me, either. I also know
it pains them that I had to take out loans for college because of their
current experiences with debt.

This thought plagues me every time I think about career choices. I
really wanted to be a teacher for a long time, and I still do, but I
want to teach because I love the idea of talking about what I know for a
living. I want others to hear my ideas, and I want to influence people
in some way.

But the truth is I won't make a high salary as a teacher, and I have to
balance my deep debt from college I will carry against that reality. So
now I am not sure what to do with my life. I don't want to enter a
career I am not crazy about, but I don't want to have a job I love with
nothing to show for it.

I know I am not the only one with these thoughts, and that is a big
problem. This country needs teachers and other public service workers to
sustain itself. If it is not economically possible to go into these
fields, then our whole society suffers.

I read an article saying that education is a right and not a privilege,
and this really caught my attention. Anyone should be able to learn in
college if they so choose to; it should not be reserved to those who can
afford to pay the most. But I understand, like everything else in the
world today, college costs money. I also understand that there is
nothing the Department of Education can do about the rising cost of
higher education, but there is something you can do to help students
deal with this cost. You can adopt the five-point plan to help ease the
burden many are facing now, and countless others are doomed to face.

I strongly agree that a person's income should be taken into account
when determining loan repayment. Those people who are brave enough to
enter a field of education, social work, and other public service jobs
should be able to do those jobs without the constant burden of debt. Of
course, these loans need to be repaid in a reasonable amount of time,
but if you are not making enough to pay them back, then everyone
involved suffers.

Also, graduates with children should not have to choose between giving
their children what they need and paying off their college loans. It
costs a lot of money these days to raise a family, and this should
definitely be taken into consideration.

So I ask you to keep these ideas in mind when you are making your
decisions. Please keep students like me in mind. The five-point plan is
just a small step to improving the cost of higher education, but it is
an absolutely indispensable step that must be taken.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Sandrae Ban.

**SANDRAE BAN:** Good afternoon.

My name is Sandrae Ban, I have traveled from North Shore Community
College in Lynn, Massachusetts, to speak to you today.

It is my honor to represent in the future of the best country on earth.
How did the U.S.A. get to become the best? It was apparently the work of
great business leaders, scientists, politicians, and philosophers. Their
contributions are studied and taught by the best universities not only
here, but worldwide, but that legacy is getting lost.

We have brilliant minds that are going to waste on a daily basis due to
the high cost of college. Our colleges could develop the next Albert
Einstein, Thomas Jefferson, or great person of the century, but the next
generation is opting out of college instead.

As a people, we cherish the special moment when our children reach the
pinnacle of educational success. We smile with joy as they stand at
graduation, degree in hand. That degree means so much more than a bigger
paycheck, it signifies the hope of everyone that our future will be
brighter and stronger because we trained the next generation to take our
society further.

So many parents and students dream of such events. So many parents and
students do what they can to make this hope a reality, but guess what? A
four-year college is too expensive. Parents and students have to take
more and more loans to pay for it. Even though a four-year degree is a
path to independence and optimism, it has become financially easier to
start a job after leaving high school rather than enrolling in a
four-year college.

More and more students who make it through coming to a college like
North Shore don't have the resources to continue further. The fact that
students have to take so much debt is a huge problem. I am here to tell
you that the reality of taking too much debt stops parents and families
from considering a four-year college, and this stops hope and
inspiration towards a better tomorrow.

A nation without relatively easy access to a higher education is a
nation without hope, a nation heading for failure. With the current
world order, can we afford for our children to fail? We are all here
with one aim, one goal, one destiny.

This event reminds me of the pilgrims that arrived in Virginia in 1607.
They all had enormous problems, and they looked to the North for hope.
Their cries were heard and addressed collectively. From such
acknowledgment evolved the "land of the free, and the home of the
brave." Can you imagine what we can achieve if our cries are heard and
addressed in the same manner? The result would be the fastest growing
country in relation to educational, social, political, and economic
advancement.

My mom is the main breadwinner of the household. I can remember vividly
applying for financial aid this semester, which I was denied, because
she made too much money in 2004. However, in the process of applying,
she was diagnosed with lymphoma cancer, which reduced the family income
drastically. The fact that I was not able to attain financial aid, which
would make my expenses more bearable, could easily deter my motivation
in regards to pursuing a higher education.

Among us, there are countless people who decide to terminate their
education hopes after receiving the horrifying news from the Department
of Education. It is unfortunate, and this cannot be over emphasized,
that the tools that are supposed to assist borrowers with payments on
federal loans are inadequate, confusing, and inconsistent.

One approach to make access to higher education easier is to make loan
repayment easier and more affordable. Earlier this year, Congress went
in the wrong direction by making student loans more expensive. In
contrast, the Department of Education can give us back a little hope by
enacting the five-point plan to make student loan more affordable. When
I look forward, I see the emblem with the Department of Education, and I
see a green tree, which simply means we should flourish, and with the
current debt, it is almost impossible for this generation to flourish.
So I am asking you to please just consider what we have to say.

Thank you very much.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Sarah Flanagan.

**SARAH FLANAGAN:** Thank you.

I am Sarah Flanagan, Vice President for Government Relations and Policy
Development of the National Association of Independent Colleges and
Universities.

The approximately 1,000 NAICU members nationwide reflect the diversity
of private, not-for-profit higher education in the United States. Our
members include traditional liberal arts colleges, major research
universities, church and faith-related institutions, historically Black
colleges and universities, Hispanic-serving institutions, women's
colleges, performing and visual arts institutions, two-year colleges,
and schools of law, medicine, engineering, business, and other
professions.

Our institutions vary greatly in the missions that they serve, but we
are united in our commitment to quality and student success. We educate
more than 20 percent of college students, while awarding 30 percent of
all degrees. Since 1976, NAICU has represented our institutions on
public policy with the federal government. Throughout our history, we
have been closely engaged with legislation affecting programs under the
Higher Education Act, and with the regulatory process that governs these
programs. We have participated in all past negotiated rulemaking
sessions, and welcome the opportunity to be part of the upcoming
meetings.

Our policy work has focused on two things of particular relevance today:
one, providing students with access to the college of their choice; and
two, taking appropriate regulation that is sensitive to the diversity
and independence of our institutions while addressing legitimate public
policy needs.

We understand that the purpose of the public hearings, which are
concluding today, and NAICU has had at least two staff at each of those
hearings, is to identify agenda items for the negotiated rulemaking
session that will begin in December. Clearly, there are many
implementation questions related to the newly enacted HERA, particularly
around Academic Competitiveness and SMART Grants and loan program
changes that should be addressed in these sessions. These questions
should dominate the negotiated rulemaking because they will lay the
foundation for the operation of two new significant sources of grant aid
for students.

It is somewhat less clear to us which of the many other topics raised in
previous hearings are appropriately addressed in the upcoming negotiated
rulemaking session. This is particularly true in those areas such as
accreditation and transfer credit where Congress has discussed various
changes, but has not yet amended the law. We would echo the advice that
has been given in previous hearings, that negotiated rulemaking not be
initiated in these areas until after Congress has completed
reauthorization of the Higher Education Act.

Because accreditation is of particular interest to our member
institutions, I want to make a few comments about our perspective in
that area. Because no changes in the accreditation law have been made
since 1998, it is not clear exactly what would be covered in the
negotiated rulemaking session on this topic. However, should such a
session be held, we would urge that it not be used primarily to impose
regulatory uniformity in areas such as the evaluation of student
learning outcomes.

Accreditation is a uniquely American institution. In most other nations,
quality reviews are generally conducted by centralized government
authorities. The tradition of institutional autonomy by the United
States called for a different approach. It has an approach that has been
highly successful over the years, and one that Europe is now trying to
duplicate. It has a lot of diversity in institutions to flourish, and it
has helped make American higher education the standard for the world.

As Duke University President Richard Broadhead pointed out in a recent
column in The Washington Post, "High-rated officials in Asia continue to
respect and admire the creativity of the American system." Broadhead
acknowledges that American higher education must improve, as we all do,
but observes that making ourselves over in the image of an imagined
rival won't be the formula for success. Even as we correct real
deficiencies, we need to recognize and nurture the strengths that are so
evident to others.

It is important to recognize that colleges and universities are
interested in ensuring their students learning. As one would expect in a
system as diverse as our own, they are undertaking a variety of
assessment methods. Perhaps one of the most unusual and intense efforts
has been launched by Alverno College in Wisconsin, recently highlighted
in "Inside Higher Education." They have abandoned grades many years ago
in favor of integrating assessment into every element of the curriculum.

The Alverno system, and other innovative assessment systems, would never
withstand reforms made in the name of accountability that call for
standard measures that allow for easy comparison of institutions that
are not alike. The drive to explore and innovate, the very qualities
that led to the development of the now highly touted Collegiate Learning
Assessment would be killed on the vine through such efforts.

Accreditors have already been pushing institutions to demonstrate how
well they are achieving their missions based on current statutory
requirements enacted in 1992 and strengthened in 1998. These efforts
need to be allowed to grow and develop, not to be suffocated in an
effort to achieve measurable and comparable outcomes.

Accreditation has been used successfully by the federal government for
more than a generation to ensure quality and diversity of educational
product, without inappropriate federal intrusion into matters of
curriculum. In this sense, accreditation has served as a barrier to
federal control. We encourage you to continue this past practice of
limited federal regulation over accreditation to ensure that
accreditation not become a tool for federal intervention.

This is not just a belief in the central premise that accreditation is
first and foremost a system of peer review. We also believe that
excessive federal control of accreditation would lead to a decline in
the variation of excellence that is the hallmark of American Education.

Thank you for allowing me to make these remarks on behalf of American
Independent Higher Education. We look forward to the formal negotiated
rulemaking sessions in the weeks ahead.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Lamar Thorpe.

**LAMAR THORPE:** Well, I have to say, welcome to the people from out of
Washington, D.C. Thank you for coming down and supporting this good
cause.

Thank you, members, for the opportunity to be here today.

My name is Lamar Thorpe. I am five-year veteran of the United States
Navy, and a senior double majoring in sociology and women's studies at
George Washington University. Currently, I am also the Student
Association President, representing undergraduates, graduates, law,
medical, and professional students on all three of our major campuses. I
am a native of Los Angeles, California, and graduated high school in
1999.

Today, I praise God every day for the opportunity that so many people in
my community did not have, a chance to enter higher education. When my
peers and I graduated in 1999, most of us did not think about college
loans, application fees, or deadlines. Why? It is quite simple, because
there were always jobs that target\--the military recruiters were always
in our neighborhood, and the local community college, which most of us
couldn't finish anyway, never said, "no." The idea of higher education
was far beyond our reach and not a reality.

Recently, we all had the right to be upset with John Kerry's botched
joke, specifically saying that those who don't get a good education end
up in Iraq, but we were upset for the wrong reasons. We should have been
upset for the fact that what he said actually has some truth to it. I
personally did not go to Iraq, but I did join the military because I had
no other place to go after I failed out of my community college and
could not find a job at the local grocery story, because my reading and
writings skills were at a seventh grade level.

Many of the young men and women who I graduated with enlisted in the
Marine Corps. Most of them are still there today, and some of them are
in Iraq, never given the chance at higher education.

My message is very simple. We all need to focus on providing access and
affordability to our children. These are not students, and they are not
just pupils, and I think we forget that sometimes. These are our
children.

The number that joined the military end up in prison or with few
opportunities are not statistics, either; they are our children, whether
they are Black, White, Asian, Middle Eastern, Latino, or whatever
category they fit in. We are failing them by increasing student loan
interest rates, as the Congress did this past January, and cutting back
on funding for financial aid programs. We are failing them by not
increasing grant or aid, by not expanding forgiveness in loans.

As a veteran, I am entitled to the Montgomery G.I. Bill, as most of you
know, but there are many misconceptions about the G.I. Bill itself. I am
always amazed that people believe that I get a free ride for college
because I did five years in the Navy, and because of the G.I. Bill, but
I don't. Although I am grateful for the G.I. Bill, \$8,000 a year does
not cover my \$48,000 tuition bill. I rely heavily on Pell Grants,
Stafford Loans, and low interest rates, and other various forms of
financial aid, so those have always been important to me.

The five-point recommendations that were put forth by the Committee are
great and I support them, but please focus on expanding higher education
access, on improving student preparation, addressing non-academic
barriers, and significantly increasing grant aid to low-income students.

Thank you for your time.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Jarrett Kealey.

**JARRETT KEALEY:** Thank you for convening these hearings, and thank
you for the opportunity to speak.

My name is Jarrett Kealey, and I am a senior at Marymount University in
Arlington, Virginia. I am here today not only to express my own views,
but on behalf of Marymount students as their Student Body President.

I am very fortunate. I am the first in my family to attend college, and
I am getting a quality education. Scholarships and financial aid have
helped make it possible for me to pursue my dream of obtaining a college
degree. I am here to speak about the critical importance of financial
aid to millions of students like me.

For many first generation students, the reality of achieving a college
education is not easy. I personally have found it necessary to take out
more loans each year, while I have seen my grant aid remain stagnant.
You may be saying to yourself, "Jarrett chose a private university
knowing that the tuition would be high. He could have gotten a good
education at less cost at a public college," and you would be right. I
did know that private college tuition would be higher, but I wanted the
small classes and personal attention that a place like Marymount
delivers. Some students need this kind of environment to succeed, and
are intimidated by large public universities.

It is also important to note that public colleges in many states,
including Virginia, cannot accommodate all of the students who are
seeking higher education. Private institutions like Marymount help to
ensure that all college-bound students have access to quality higher
education.

Access to higher education must be expanded, and one key to access is
affordability. It is incumbent upon colleges and universities to hold
the line on tuition costs, while providing quality programs and
services, and it is incumbent upon our government to ensure that the
funds and programs are available to assist deserving students who want
to become leaders of our society.

We always hear that colleges and universities produce leaders, and that
is true, but it is important to note that higher education also produces
people who serve. At Marymount, for example, a large percentage of the
students are preparing for careers in nursing, teaching, counseling, and
public safety. These graduates will meet critical needs in our society,
and their chosen professions, unfortunately, do not generate high
salaries. We should all be concerned about making college affordable for
individuals who want to pursue these types of service careers, and for
future workers and leaders in every field.

My own career goal includes working in student affairs in a higher
education setting. I want to be able to work with young adults in some
of the most important years of their lives, but I worry about whether I
will be able to repay my loans, whether I will be able to go to graduate
school. I find myself asking, "Do I want to take on more debt in order
to attend graduate school?" I sometimes wonder whether I should consider
a higher paying career, but no, I want to make a difference in the lives
of college students, and to do that, I will need the help that strong
financial aid programs provide.

In 2005, 71 percent of Marymount University graduates had student loan
debt, and the average loan balance was \$24,950. And to think that many
of these people have begun careers as teachers, nurses, and police
officers. I wonder how difficult it will be for them to continue on the
path of service while repaying their college loans.

Students need more grant aid, and graduates need loan repayment programs
that take into account the post-college income level. Such programs
would encourage young people to pursue service careers and make it
fiscally feasible for them to do so.

In closing, I believe that the proposed five-point plan would greatly
benefit America's students and, in the end, we would all benefit from
the great leaders and citizens that a quality college education
produces.

Thank you for the opportunity to speak.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Matthew Johnson.

**MATTHEW JOHNSON:** Good afternoon, everyone.

My name is Matthew Johnson. I am a junior journalism student at the
University of Maryland. I currently have a 3.84 GPA on 76 credits, and I
am applying for the prestigious Harry S. Truman Scholarship, which has a
public service requirement if I receive it. Additionally, I am an
educator, I tutor at Adelphi Elementary, and I tutor for the Athletic
Department at Maryland.

Now, I will admit, I am a little better off than some of the thousands
upon thousands of college students who are struggling with high tuition
costs and boring classes. I was fortunate enough to get my entire year
paid for because I fought hard and won two journalism scholarships and
got my FAFSA form in early. However, the same cannot be said for my
previous two years, where I was forced to take out several loans, and am
now stuck trying to figure out how to consolidate them so that I can
save some money.

I really don't want to be in debt. I don't want to have that lingering
in my mind when I am deciding my future. Almost my entire life is
devoted to some type of service or another, whether it is Marymount
PIRG\--I am involved in a lot of student groups and other outside
projects\--and whatever fortune is thrown my way, I try to give at least
some of it back, just in general. What's left over is devoted to a
princess in China, who I hope to marry some time after getting my
bachelor's. We are trying to go to graduate school in the same region in
the world, it's pretty complicated. Thank God for the Internet, right?

Now, I really hope I win the Truman Scholarship because I don't think I
will be going to graduate school on loans. I might be the most educated
man in debtor's prison, but that isn't very satisfying.

Now, when I was in high school, I wanted to go to Harvard, but one day
it occurred to me, probably around the time I was receiving ten college
solicitations a week, but none from Ivy League schools, that Harvard was
out of my mother's price range, and I would not be going despite my 4.0
and multitude of extracurricular activities. Why did my mother ever
decide to become a teacher? Why did my dad decide to become an alcoholic
and stop working and sending child support? Why is college so expensive?
All of this was running through my head, even at that age.

The lucky thing is I am an only child. My mother could not afford to
send more than one kid to college on a teacher's salary, but she did
whatever she could to send me something and I owe everything to her. She
had loans of her own to pay back to UMBC, not to mention house and car
payments, things like that. So when I heard, I think, last year, that
Congress voted to cut \$12 billion from aid, it makes me wonder whether
our government wants us to be educated out of this generation. I feel
that they are threatened by a smart, young generation that could expose
their corruption and oust them from power.

It is like we are only born to work for Wal-Mart unless our parents make
six figures. This is not the America we sell to tourists and travel
guides. America is the land of opportunity to those people, a place
where anyone, poor or rich, Black, Brown, or White, can achieve their
wildest dreams. Now, I hope that you will keep at least some of those
dreams alive by supporting the five-point plan for manageable student
loan debt.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Scott Peach.

**SCOTT PEACH:** Hello, my name is Scott Peach, and I am a senior
political science major at the University of New Hampshire.

First of all, I would like to thank you for hearing the student voice
when deciding our future. Unfortunately, not all of those who run our
government are listening to us, the students, which is why we are in
dire need of your help.

Attaining a college degree, I am sure, as you know, is becoming
increasingly difficult, if not impossible, for more and more students.
With the \$12 billion slashes to financial aid, tuition costs rising
with no end in sight, the expanding emphasis on loans, and the
ridiculous interest rates, many students are dismissing college as an
option in their future.

At UNH in 2004 and 2005, 72 percent of students graduated with loan
debt, at an average of \$21,459. For me, I will be graduating with
around \$25,000 in debt. In April of 2007, I will be applying for the
Peace Corps in hopes to leave for South America right after I graduate.

So what will my reward be for attending college and helping others in
need? Well, it will be that \$25,000 bill waiting for me when I return
home, along with the interest rates that will add on to that, a bill
that will force me to work one or two other jobs, along with the
profession that I choose.

Working excessive hours at two or three jobs to keep up with loans and
the rising cost of living was not what I imagined when I was applying
for college. I had imagined expanded opportunities, freedom to choose my
profession, and eventually being able to follow my passions. Nowadays,
it seems that attending college is closing the doors to opportunity
instead of opening them. My strongest passions in life are activism,
grassroots organizing, and helping others better their living
situations.

Now, we all know that these things pay next to nothing, and, with my
loans and high interest rates, I am not even sure if I will be able to
pursue my passions, all because I went to college, all because I wanted
to better my education and to better my chances in the workforce. So
what does this mean for our society?

Well, if things continue down this road, there will be less teachers,
less social workers, and less college graduates. How did we get to a
place in America where only the super rich can attend college while they
try and send us poor folk off to war? So, when you are all deciding our
future, I hope you will remember us, the students, and the hardships
that we face every step of the way of the college experience.

I thank you again for giving us the chance to express our grievances
with the whole system. Thank you.

**DAVID BERGERON:** Thank you, Scott.

**DAVID BERGERON:** Shelley Saunders.

**SHELLEY SAUNDERS:** Good afternoon.

My name is Shelley Saunders, and I am the Vice President of Strategic
Services with American Student Assistance. I am here today on behalf of
ASA and my fellow guarantors in the National Association of Student Loan
Administrators.

NASLA is a private, non-profit, voluntary membership organization that
represents the interests of guarantors. NASLA is organized to ensure
consistent and reliable delivery of student loan services to America's
students, parents, and postsecondary institutions. NASLA is committed to
working cooperatively with all postsecondary industry participants and
representative organizations in fulfilling the promise of educational
access and choice.

Over the last several years, many factors have impacted student loan
borrowing, including the rising cost of education, increasing borrower
indebtedness, and the rapid growth of private loan borrowing, and the
popularity of loan consolidation. These changes underscore the need to
review several areas of potential improvement, several of which I will
describe in a brief moment, and the additional details, which are in the
written testimony that I just gave you.

Because of the importance of these turns and changes to student loan
borrowing, and the fact that FFELP is, by far, the largest source of
federal student aid, NASLA believes that it is important that guarantors
participate as both a lead and a backup negotiator on the loan issues
team in the negotiated rulemaking process.

A core focus of guarantors is to maximize the success of borrowers in
repaying their loans. As an administrator of the FFELP, a guarantor
works closely with the Department, students and families, schools,
lenders, and loan servicers throughout the life of the loan. Inclusion
of a guarantor voice in the negotiations will promote broad-based,
well-informed rules.

NASLA proposes the following list of issues for negotiation for both the
FFELP and Direct Loan Program:

First, simplification of obtaining and granting deferments. NASLA feels
that the process of a borrower obtaining a deferment from more than one
loan holder is unnecessarily cumbersome and could be streamlined. NASLA
recommends changes to the regulations that would permit a lender to
grant any type of deferment to a borrower who has another loan deferred
for the same timeframe and the same reason by another holder. The lender
could use NSLDS or another authoritative database to determine that the
borrower is in deferment status for a particular reason and a particular
timeframe.

With respect to access to economic hardship deferment, the overly
complicated process of applying for an economic hardship deferment
results in the underutilization of the deferment entitlement, and makes
it much more attractive for the lender to offer a less beneficial,
particularly in the long run, discretionary forbearance.

We recommend that Congress reevaluate the HEA provisions to simplify the
eligibility criteria. In the meantime, we suggest that the Secretary
exercise her authority to simplify existing regulations. In particular,
we would like the Secretary to examine the eligibility criterion that
allows a borrower to qualify for the deferment if the borrower is
receiving or has received payments under a federal or state public
assistance program. The Department should consider developing a
comprehensive list of federal and state qualifying public assistance
programs, and placing that list on a Web site to enable loan holders to
consider the eligibility of all applicants for the deferment in a
consistent manner.

In addition, we would like the Secretary to allow the lender to use
either the borrower's original loan debt or current outstanding balance,
whichever is more beneficial to the borrower, in determining a
borrower's eligibility for the economic hardship deferment on the basis
of the borrower's dept-to-income ratio.

While various repayment options exist in the federal loan programs, the
effectiveness of those options is limited, especially with the
increasing debt burden experienced by student borrowers. Although
borrowers have an income-based, income-sensitive repayment option, this
option does not take into account other debt or family size, or prevent
situations in which a loan balance is increasing, even if payments are
being made. We feel that these factors should be considerations in
determining a borrower's repayment amount.

With respect to utilization of a discretionary forbearance, forbearance
can be a useful tool in preventing default; however, guarantors are
finding that there is little they can do for a borrower to resolve mid-
to late-stage delinquencies and prevent defaults because of the heavy
use of discretionary forbearance early in loan repayment. More care
should be taken to ensure that the application of forbearance, and the
subsequent interest that accrues and is capitalized, does not impair the
borrower's long-term ability to achieve successful repayment.

We also recommend that the Department reevaluate exit-counseling
requirements to include the new graduate and professional Grad PLUS for
borrowers, as well as borrowers who are exiting school who have obtained
in-school consolidation loans. Providing exit counseling for all student
loan borrowers is extremely important to ensure that they have the
information necessary to make informed choices that impact subsequent
life decisions, and to allow them to establish successful repayment
habits and lifelong fiscal responsibility.

With respect to financial literacy, the Treasury Department and Congress
have indicated that a lack of financial literacy is a significant issue
in the U.S., and have gone so far as to establish financial literacy
month annually in April.

NASLA strongly advocates developing a financial literacy program that is
available as an elective course to all students attending secondary and
postsecondary institutions. Such programs would assist students in
achieving the level of financial literacy necessary to succeed.

With respect to total and permanent disability discharge requirements,
the conditional discharge provisions have been in place since 2002.
NASLA feels that a sufficient amount of time has passed for the
Department to take a step back and review and evaluate the conditional
discharge process. While we understand the Department's obligation to
protect the integrity of the discharge program and not allow for abuse
or fraud, we are not convinced that the current process is as
streamlined and efficient as it could be. The current process is
duplicative and redundant, and we feel a more definite separation of
duties between the Department and guarantee agencies is needed.

We assert that guarantors should be allowed to do the job they were
charged with, determining borrower eligibility. On the other hand, if
the analysis demonstrates the value of the current process, then we
suggest the following revisions to current regulations:

We request that the Secretary reconsider simplifying the eligibility
requirements of a disability discharge. While we understand that the
Department's position is not to rely on disability determinations made
by other agencies, such as the Social Security Administration, as these
determinations are less stringent, we feel there is validity to
reevaluating this position. We understand that, when receiving SSA
disability benefits, if a borrower's condition improves, the agency
stops providing benefits. However, the Social Security Administration's
definition of disability could be used to place a borrower in the first
year of conditional status where, in part, the borrower's annual
earnings and continued disability status is monitored and re-verified
for an additional two-year period.

Additionally, a borrower in a conditional discharge status should be
permitted to make loan payments and resolve delinquency or default
status, if possible, prior to a final discharge determination. The
Department's premise that a borrower who is able to make a loan payment
during a period of conditional discharge is unlikely to be truly,
totally, and permanently disabled is unfair to disadvantaged
individuals.

Additionally, taking the issue of the disparity between the standard for
meeting the definition of "disability" between the HEA and the Social
Security Administration a step further, the Department's policy that
allows it to garnish disability benefits is a policy that ought to be
rescinded. Borrowers whose disability payments are garnished are
frequently in the most extreme financial circumstances, and resolutions
of garnishment complaints are difficult, if not impossible to resolve.

Lastly, current regulations state that a discharge of a loan based on
the death of a borrower or a student in the case of a PLUS loan must be
based on an original or certified copy of the death certificate. We
recommend that regulations be revised so that if one loan holder obtains
an original or certified copy of the death certificate, other holders
are allowed to discharge the deceased borrower's loans based on the same
death certificate.

In conclusion, NASLA appreciates the Department's consideration of this
testimony and offers itself as a resource to the Department on these and
other issues. Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Ellen Frishberg.

**ELLEN FRISHBERG:** Thank you. It is really nice to be here among all
of these students. It makes me feel like I am back at work.

I have spent 30 years in a financial aid career. This has been a really
exciting year for us because we have a new grant program. We have not
implemented a new grant program in a very long time, and it has been a
really good feeling to be able to offer new grants to students this
year.

I have three things that I want to mention here today. While I know that
they may be statutory rather than regulatory, I know that you have the
ability to influence the statute, as well, so I would like to talk to
those three points.

The first one has to do with those new grants. When we evaluated our
student population, we thought that we really had a significant group of
students, because we do teach all the STEM courses where I work. What we
discovered, in fact, is that 18 percent of our students who would have
been eligible for National SMART were eliminated because they were
permanent residents. These are students who will become citizens, but
because they are 17 and cannot become citizens yet, or they are 18 and
they are juniors and they have not had time to go through that process,
they have lost out on significant grant funding.

It was very disconcerting to us\--it was a very happy occurrence to find
out that, in fact, we had so many students who are new immigrants to
this country, who have taken up being excellent in those subjects, in
engineering and in technologies, but that we would not be able to help
with additional grant funding. So if there is any way we can change that
statute to include other than just citizens in permanent residence,
which we include for all other programs, that would be a wonderful boon
to the promise of the American Dream.

I, too, along with the students, support the five-point plan, but that
is not why I am here. But I do support it, partially because I am a
student loan repayer myself, and also because I have two teenage
children who are about start applying to college\--it is kind of scary.

The thing that I most want to talk about, though, is the Spellings
Commission, and how they found that students see paying for college as
an unattainable task. The misinformation that is out there in the
community about what college costs is pretty much the norm. Even in rich
communities in Maryland people think that there are very few options out
there and that it is going to cost \$40,000 a year to go to school,
which we all know is not true, but, in fact, people don't see the
options.

So I think it is time that we start thinking outside of the box, in
terms of the system that we use to determine a family's need for
financial aid, and get outside of the system that was designed by the
College Scholarship Service back in 1954 to serve a very elite group of
schools that has now become embedded in the Higher Education Act. That
system had an elaborate application form with a lot of confusing and
arcane questions, and those financial aid programs, because of the
application, are not reaching poorer first generation college students
and their families. And I know this because I was a first generation
college student\--quite a few years ago, but I was a first generation
college student, and I didn't know about the form and the programs, and
I know that is still the case.

We also know from the data that it is ten times more likely that you
will get a BA if you come from the highest income quintile than if you
come from a family from the lowest income quintile, all other things
being equal, that's grade point average and SAT scores, and that is
pretty damning on this nation and the promise.

So money would help, of course, money always helps, but the process of
applying is also part of the problem. So I propose a process that would
improve awareness of the options that are available, and ease delivery
without a large federal cost. Every year, in the mail, you get from the
Social Security Administration, a statement of your year's previous
earnings, and that is taken from data that the Social Security
Administration gets. That document lays out how much you can expect to
receive in Social Security benefits when you retire. It is a government
form, it is filled with basic verifiable and free information, and it
tells a story. People read it and they say, "Oh, no, I will never be
able to retire at that rate," or they say, "I think I am going to start
saving for retirement." It gives them some incentive to act. And, as
citizens, you have information and you can act on it, you can work or
you can save, or you can decide, "No, I can live on that." So why not
clone this type of statement and use it to tell families a different
type of story?

How about a story about how much financial aid one of their family
members could receive if they went to college now, or even in ten years
in the future? You could use the same data that the Social Security
Administration uses to generate these reports, based on who earns
income. And each year families could be asked, when they file their
taxes, if they would like a college benefits statement, we can even give
it a federal name.

\[Laughter.\]

**ELLEN FRISHBERG:** The data could then be transmitted to the
Department of Education, which would, on the basis of earned income
information alone, generate a statement that would say, "You are
eligible for X number of Pell Grant dollars, student loan dollars," and
even, if you know the residency, state aid money, because much of that
is formula driven.

It could illustrate different scenarios of how much aid a student in a
family could receive, based on different costs of schools, so that you
would take care of the issues of segments. And that way a family could
learn when their children are young that either they won't qualify for
need-based dollars or, more importantly, that they will qualify for all
of the money that they need, and then they can act on that information.
They can encourage their kids to go to school, they can plan a savings
strategy, they can motivate them and make them think that college is
possible.

You could also do this with people who don't have taxable income, but
are recipients of untaxed federal or state benefits like SSI or TANF.
The agency that they work with, we just send their names in with their
information and they could request a similar statement, and then the
application becomes easy. When a family member decides to go to college,
you fill in the back with the schools you plan to attend, you send it to
a processor, and then they send back-verified eligibility information to
the school.

I know that some of my colleagues are going to be shocked by the idea
that we could take such subtle information as the need analysis
calculation and do it based on a couple of data elements, but we toss
out complexity to reach a reality. The system we have is complicated,
the Commission said so it is flawed. The analysis currently is based on
income, not on true wealth. Families' most significant assets, their
homes and their retirement accounts, don't count in the current system,
so why put a complex application in front, as a barrier, to college
attendance? Why not make it a piece of information that people have?

Congress could design a formula that would use actual income, and the
data reported on the tax return may give some other indicators of a
proxy for wealth, so that you can determine need. You just use that as
an index so that it does not cost anymore to distribute financial aid.
The present system we have is imperfect, it's complicated. This may not
be perfect, some colleges may still want more information, but it
certainly would get more information out to people, and it is
simplicity, and it would be a statement to get people to enroll.

The last issue I wanted to mention is that we are under a lot of
pressure to spend our Perkins Loan funds on campus. We have had a number
of years where variables have mitigated against that. Perkins Loans were
higher interest rate than Direct Loans, so students were turning them
down to take Direct Loans. Consolidation loans have increased repayments
significantly, so we are trying to figure out ways to make a sustainable
level of repayment. Right now, the regulations don't allow us to keep
cash on hand, and yet we are trying to figure out ways to level out our
repayments.

There is also some threat of losing those dollars, and since we are all
looking for new grant money, it would be our hope that if, in fact, we
ever ended the Perkins Loan Program because we want to get to simplicity
of one loan, that you would all institutions that have managed these
programs for 30 or 40 years to keep the corpus of the repayments, turn
it into endowed scholarship funds that we can then offer to needy
students as grants.

I thank you very much for your attention.

**DAVID BERGERON:** Crystal Calarusso.

**CRYSTAL CALARUSSO:** Good afternoon.

My name is Crystal Calarusso, and I am the Academic Director of the
National Association of Schools of Public Affairs and Administration.

We are the specialized professional accreditor of the master of public
administration, the master of public policy, and other professional
degrees for public service at the graduate level.

I appreciate the opportunity to speak with you today from the
perspective of a specialized, professional accreditor.

NASPA is also a voluntary accreditor. A voluntary accreditation process
denotes that our graduate programs seek accreditation for reasons other
than federal funding or obtaining professional licensor for graduates.
Graduate programs specifically participate in our accreditation process
for three main reasons: to facilitate quality improvement within the
program, to join the national peer review community that makes policy
for the MPA and MPP degrees, and to provide an extreme signal of their
commitment to assessment and improvement.

Our programs, and those of many other professional accreditors, have a
distinct and established voluntary commitment to quality assurance and
assessment. NASPA is not a Title IV gatekeeper, but changes in policies
regarding the national governance structure of accreditation will affect
our practice.

Recent policy suggestions from the Commission on the Future of Higher
Education regarding national data systems and accreditation reforms
could have some unintended impacts on the systems of quality assurance
for programs. Communications from the Commission have affirmed that
diversity of programs is a strength of American postsecondary education.
However, some policy recommendations may have the potential to
homogenize program assessment, specifically in the case of professional
programs. If not carefully designed, some national data system and
accreditation reform efforts could effectively move the policymaking
focus for professional degrees away from the professions, where the
knowledge and expertise to address quality within their own context
resides, and into a national system that provides a basic template for
all, but a good fit for few.

To maintain the hallmark diversity of professional education, the
profession should be recognized for their valuable role as a public in
determining the style and scope of assessment. In fact, only the idea of
increased accountability to the public is mentioned. Professional
accreditors frequently ask, "Which public?" We have an established
responsibility not only to students making a buying decision, but also
very importantly to the professions we serve.

Professional accrediting bodies have provided a valuable service, not
only to students seeking degrees, but also to the professions and to the
public at large by ensuring that we will have competent nurses, lawyers,
engineers, and other professionals to lead our communities. This is
accomplished through a variety of both outcomes and input standards
appropriate to prepare students for practice in a given profession.

Comparability data, both quantitative and qualitative are useful to the
consumer of the education product. However, data recommendations and
assessment requirements not designed by the profession, or not based on
quality indicators specific to that profession can lead to rankings and
decisions that are marginally relevant to program quality. Popular
indicators, for better or worse, can have the effect of motivating
policy and curriculum shifts within individual programs, as programs
attempt to compete for the best students.

If these decisions are based on indicators that carry little relevance
to program mission, national assessment requirements and data systems
that include professional programs may have the unintended consequence
of slowing improvement and development of professional programs. It
could impede the very innovation that the Commission seeks to support.

To avoid these unintended consequences from the results of the
negotiated rulemaking process, and to respect the diversity of programs
and accreditors, I hope the Department of Education will consider
including a representative from specialized professional accreditation
on commissions and rulemaking bodies wherever possible. I also hope that
the process will move forward with the goal of recognizing the value of
program diversity, allowing the professions to determine, with their
many publics, the types of assessments to perform, and the information
to present to the public.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Nick Christianson.

**NICK CHRISTIANSON:** Thank you very much for allowing me to testify on
the issue of student debt. It is not every day that we, as students, are
granted the opportunity to share our side of the story with our
government, and I can tell you, as you can see, we have a lot to say on
this and many other issues.

My name is Nick Christianson. I am a senior at the University of New
Hampshire, and I study politics and justice studies. My experience
dealing with debt from student loans, at this point, is very limited,
although I know that will certainly change the day I graduate.

Back when I was applying to colleges and universities across the country
four years ago, after being rejected by my top choice, I narrowed it
down to American University, here in Washington, D.C., and the
University of New Hampshire. Both of these schools fit my requirement of
being close to national politics, but when I received my financial aid
packages from each institution, I could not really afford either of
them. So I went to the one that my family would have the least trouble
financing, which was, naturally, the state school, albeit the second
most expensive state school in the country.

My dad was a journalist and my mom was a school counselor, until we
opened our small retail shop in North Hampton, Massachusetts the year I
went off to college, where they now both work full-time. I was fortunate
enough to have most of my college expenses paid for by my parents each
year, and I know that many do not have that financial support, but my
family learned that a small business is neither cheap to start up, nor
quickly profitable, so I will be on my own to pay off the loans I took
out to get my education.

The national average loan debt for a four-year state college is
\$18,000. The average student loan debt in New Hampshire is \$24,000.
Many of my friends will have \$30,000 or more of debt. Luckily for me, I
will only have close to the national average of \$18,000, plus interest,
to pay back. Although, thinking about that, it sounds pretty ridiculous
for me to say, "only \$18,000," especially considering that I am looking
for a career in non-profit advocacy organizations, or as a political
campaign organizer, neither is known for its salary, particularly for
those of us just starting out.

The same goes for many other professions, like teachers or social
workers, as many have mentioned today, and for no reason that I can
comprehend, the cost for the education to learn the skills and knowledge
that these jobs require is hardly paid off by accepting the position in
these incredibly important fields. Student loan repayments become a
burden that so many of us will have to factor into our major life
decisions. What job can I afford to take? Where can I afford to live?
When can I afford to start a family? These questions become amplified by
anxiety when the everyday costs of living accrue to form a barrier of
payments and bills. Student debt is just a beginning, and it is a shame
that it exists at all.

Having taken out \$18,000 in loans, people tell me that I better be
smart enough to have a plan to pay them back. Well, I don't have a plan,
few students do when they graduate, and I do know that a plan has been
suggested to you containing five core points lessening the financial
burdens for those of us who may be hamstrung by our student debt.

I know this five-point plan for manageable student loan debt will not
get me out of the red, nor will it lower tuition costs or raise funding
for grants, but the plan certainly serves to round off the rough edges
in the student loan program, and it is a plan that you can put into
action now, because the truth is, despite what people say, student debt
is not a question of stupidity versus planning. We are forced to take on
these costs to complete our educations, and we invest in our educations
for the very reason that we are planning for our future. There are so
many valuable skills for life and career that can only be learned and
perfected at college. Unfortunately, they are all too frequently
accompanied by something else that can only be found at college, student
debt for life.

I thank you again for taking the time to consider my story and others,
and I strongly urge you to help students repay their loans successfully
and fairly by adopting the five-point plan for manageable student loan
debt that has been presented.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Anthony Daniels.

**ANTHONY DANIELS:** Thank you.

My name is Anthony Daniels. Thank you for allowing me the time to
testify today.

**DAVID BERGERON:** Are you picking that up in the back?

**COURT REPORTER:** Not really.

**DAVID BERGERON:** We need you a little closer to the mike for our
transcriber.

**ANTHONY DANIELS:** My name is Anthony Daniels. I want to thank you for
allowing me the time to testify on behalf of me and my colleagues.

Thank you for convening these hearings about how to make college
affordable. I am both professionally and personally concerned about the
issue for management of student loan repayment rules.

Professionally, I serve as the Chairperson of the National Education
Association Student Program, where I represent over 60,000 college
students over 1,100 universities across the nation preparing for careers
in education.

The rising levels of student loan debt threatens their ability to pursue
successful careers in education without being committed to lengthy
student loans plagued by rising interest rates. We are all concerned
about the levels of student loan debt. As a recent graduate with an
outstanding level of student loan debt, I am affected personally by the
costs and concerns of the repayment plan.

I received my bachelor's degree in elementary education in the spring of
2005 from Alabama University, and I am currently pursuing a master's
degree in special education at that same institution. As I completed my
bachelor's degree in four years, I find myself in over \$30,000 in loan
repayment debt. At that time I wondered, "Could I possibly survive as a
first-year teacher off of \$28,000 in Alabama?" I even asked myself,
"Was college the best way to go, or should I have looked for a regular
job?" Working a regular job did not seem so bad after all. At least I
would be making a better living without the stress of loan repayments,
but the decision had been made. I had to look at the situation I was in
after graduation. I looked at my \$30,000 of debt, extremely low
teaching salary, and decided that my only option was to further my
education so I will be able to get more money.

I saw this as my best option, because having just finished my student
teaching two weeks earlier, I could not see how I could possible afford
to travel to another state for an interview or pay relocation fees
should I actually have been offered a job.

Folks, the teaching profession is a calling. I went into teaching
because it was the most rewarding profession in the world. There was
nothing more exciting than helping students discover things that
fascinate, and nothing is more rewarding than seeing a child grasp an
idea and develop an idea of his or her own. But how can I purchase a car
or a home when I am in debt over \$30,000? This is a major concern of
all of my colleagues.

More than 8 million postsecondary students receive student aid, with 30
percent of this support coming from the federal government. In the next
decade, undergraduate enrollment in colleges and universities will
increase by 14 percent, with 80 percent of these new students coming
from minority backgrounds, and 1 in 5 living in poverty. Federal aid is
already insufficient to allow us to want to pursue higher education to
do so.

Recent studies have indicated that typical student borrowers leave
school with almost \$20,000 in debt, and that many young Americans face
such significant college debt that they will defer home ownership and
starting a family. Students are not able to take careers in teaching,
social work, or other public interest fields.

I have attached to my written testimony a table taken from the state
higher education project report, "Paying Back, Not Giving Back: Student
Debt's Negative Impact on the Public Service Center Career
Opportunities." The table shows the percentage of college students who
would have manageable debt if they took a teaching job in the state.
Nationally, nearly a quarter of the graduates from public four-year
institutions would have unmanageable debt on a starting teacher's
salary, and figures rising to almost 40 percent of the graduates from
private institutions. Higher education remains a critical investment for
young people to make it themselves, for families to make a success of
their children, and for the nature to make it in the future.

Current projections are that financial barriers will prevent 4.4 million
high school graduates from attending a four-year public institution over
the next decade, and will prevent another 2 million high school
graduates from attending college at all. I recognize that this is a
complicated problem, and that much of the responsibilities lie within
the purview of the President, Congress, and states.

Folks, the federal government has not been doing its part to help make
college affordable. Last February, Congress passed a measure that
removed almost \$12 billion from the student aid programs, and in the
first year of the 2007 budget, the President proposed \$1.2 billion in
additional cuts from the higher education program. The latest cuts have
further exacerbated the affordability of college education, leaving many
lower income students unable to complete their education. As we look for
a solution to this problem, we are proud of the recommendations in the
recent report of the Secretary's Commission on the Future of Higher
Education to highlight access and affordability, especially the
recommendation to increase the nation's commitment to the need-based
aid.

However, as NEA President Weaver said, "To give the proposal teeth, we
need a commitment from lawmakers to provide adequate funding." In order
to meet broader higher education goals, NEA also calls for improving
student preparation and providing more high schools with programs on
adolescent literacy and dropout prevention, as well as counseling,
smaller learning communities, and expansion of the AP courses.

President of the National Council of Higher Education added, "The
benefit of higher education are much more than bigger paychecks for the
graduate or a stronger economy, higher education is the key to promoting
an informed citizenry and protecting our democratic society."

NEA hopes to continue working with the Department in this area, and
looks forward to the next spring summit on higher education announced in
Secretary Spellings' speech last September. The Department can do its
part on the issue by taking some concrete steps, but it cannot do it
alone. The NEA will be working to increase grant aid and other student
aid programs in order to increase college affordability.

As Chair of the NEA Student Program, I pledge to contribute to that
effort. Cutting interest rates in half for student and parent loans, as
well as increasing grant aid are important steps toward reversing the
recent cuts of higher education assistance. One step the Department can
take is to make changes in loan repayment terms that will provide more
fair and manageable circumstances for college graduates once they begin
loan repayments. This will be a welcome result from the round of
negotiated rulemaking.

I thank you for your time, and I look forward to continuing to develop
the development of this process. Thank you.

**DAVID BERGERON:** Thank you.

We are going to take a ten-minute break. Then we will reconvene at
quarter till 3:00.

Thank you.

\[Brief recess.\]

**DAVID BERGERON:** Okay, we're going to reconvene.

Our next witness is David Baime.

Good afternoon, David.

**DAVID BAIME:** Good afternoon. This is a little bit like being on
trial, here.

My name is David Baime. I am Vice President for Government Relations for
the American Association of Community Colleges, and we represent
virtually all, or over 95 percent, of all the nation's two-year public
institutions of higher education. We also have, as an affiliated
council, the Student Association for Community College Students.

I would like to thank you for convening this group and for giving me a
chance to speak.

I did want to inform you that my organization will be submitting
nominations for two individuals in the negotiated rulemaking process,
and, in general, I would say that the reason why we like to have people
involved in the neg. reg. process, as we have a number of times in the
past, is because our student financial aid officers are sometimes less
resourceful than we would like them to be, and the administrative burden
issues are perhaps more important for our colleges than they are for
other sectors of institutions.

I want to just talk very briefly about two major issues that were raised
in the notice about these sessions. First relates to the Spellings
Commission Report and the issue about whether or not some of the
recommendations of that report ought to be incorporated into the neg.
reg. process, and my organization's general perspective that that's not
a good idea. The recommendations in the Report are very far reaching,
have a lot of policy implications, and these are the kinds of issues
that are best mediated and decided upon in the Congress rather than
through the regulatory process. I think in some areas it would be
possible to create or adopt some of the Spellings Commission
recommendations by the regulatory process, but we don't think that it is
a good idea. Negotiated rulemaking, and rulemaking in general, is a
fairly closed process once the negotiators are selected, and we think
that in a more open process of legislative process, it is probably a
better venue for deciding these. And also, particularly in the area of
outcomes, these are very complicated and very contentious that, again,
we think would be better off discussed at a different level.

I want to just mention that the negotiations over the Student Right to
Know Law, and implementation of that took a number of regulatory
revisions, and quite a long time at the negotiated rulemaking table. So
that is just an example of what you might be getting into if you decide
to move forward, say, in the area of student outcomes and Student Right
to Know by the regulatory process.

Another area that relates to the Spellings Commission report is
accreditation. We have the same caution to you as we do about, more
generally, the Spellings Commission recommendations. Accreditation,
statutory language, particularly the standards of recognition for the
agencies, have been subject to a lot of discussion, and negotiation, and
parsing of language in the legislative process, and, in general, it has
been my organization's position that the regulatory process should hew
as closely as possible to the statutory language. For that reason, we
see going off into new areas of regulation of accreditation without
statutory\--a premature direction\--it is probably a bad idea, given the
sensitivity that our presidents have to the accreditation process, and
the implications it has for their institutional operations. So that is
just very briefly about the Spellings Commission Report.

We did want to talk a minute about the Academic Competitiveness Grants,
where we will be explicitly nominating a negotiator. We would like to be
involved with this because of its importance to our students. I just
mentioned for your information, generally, that our campuses have told
us that the numbers of students who are coming in with ACG eligibility
are lower than they would have expected them to be or would like them to
be. Some of our narrower issues are related to transcripts\--these are
all things that we did mention in our comments in August, but just
quickly\--in terms of the transcripts that are required for
documentation of the completion of the rigorous course of study at the
secondary level, many of our colleges don't collect transcripts. That is
not because they are not interested in the academic qualifications of
their students; it is just that they use up-front diagnostic testing for
them rather than their transcripts. So this is a significant additional
regulatory burden for them in many cases, when they have to go back and
procure the transcripts.

Another point on the rigorous secondary school program, I just wanted to
point out to you that the dual or concurrent enrollment programs are
growing across the country, over 75 percent of community colleges offer
them now with their high schools. They are designed to encourage
students to pursue a postsecondary education, to get them oriented
towards college and making them really see and feel that college is an
option for them. So, to the extent that they are designed specifically
to motivate students to go on to postsecondary education and achieve in
it, we would just recommend that you look at those carefully as you
consider approving the secondary programs for ACG eligibility.

The last item on the Academic Competitiveness Grants I wanted to
mention, and you will notice that we do remain very concerned about the
decision department to not allow certificate students for eligibility.
The impact on our students is perhaps not as great as you might think it
would be. There is sometimes a perception that there are just scores of
certificate programs offered at our colleges. In fact, there is fewer
than one certificate award for every associate's degree that our
colleges grant, so it is not like there is a huge proliferation of them.
Many of our certificate students do go on to get an AA degree, and then
go on to get the BA degree. But most importantly, we are absolutely
convinced that the statute makes those programs eligible, and it bothers
us when we believe that the statute is not observed, particularly when
it is to such detriment to our colleges.

Finally, I just want to mention that the project on students' debt
recommendations are something that are looked at favorably. Our
students, obviously, have lower debt levels than students attending
four-year colleges, but for the over 20 percent of our students that do
have debt, the debt is over \$6,000 now, on average, and debt burden is
a big issue for our students. Our students have had relatively high
default rates in the past compared to other sectors, so we are very
interested in these issues and trying to look at ways to ameliorate
repayment burdens for our lower income students.

Thank you.

**DAVID BERGERON:** Thank you, David.

**DAVID BERGERON:** Barbara Salt. Barbara, you have been very patient.

**BARBARA SALT:** Oh, thank you.

I want to thank you for your attentiveness and patience through a long
day, as well.

I am Barbara Salt, a Ph.D. social worker, a recent 2003 Ph.D. graduate
of the Catholic University of America. I am a member of the National
Association of Social Workers, and Senior Program Associate for the
Institute for the Advancement of Social Work Research.

I speak today from personal experience as a late career returnee to
higher education to pursue a doctorate in social work. This testimony
addresses several issues, which that decision has made on my current and
retirement financial status.

First, I want to note that my early career was facilitated by a
government funded resource no longer available, but which was important
in setting me and others on a course of public service and, I believe,
has provided to this government a substantial return on its investment.

The now defunct National Institutes of Mental Health Grants of the 1960s
provided tuition and living expenses to build the workforce necessary to
launch the War on Poverty. This child of a railroader and factory worker
would not otherwise have been able to attend graduate professional
school of social work at that time. I am eternally grateful for the
privilege, and regret that this opportunity is no longer available to
others like me, nor to the profession. I believe that this also is a
loss to our nation's service provider workforce.

Regarding student loan repayment, I want to encourage regulation,
indeed, future legislation, as well, that would reduce the burden of
higher education to social workers who serve this country's abused and
neglected children, its mentally ill homeless, its returning traumatized
veterans, and its elderly citizens navigating complex medical care
systems at a time when their cognitive abilities are declining or
impacted by serious health debilitation.

I want to raise another issue that merits attention. Not only does the
returning mid-life or later career student thus enter a time of
considerable tuition outlay and reduced income, whether attending school
full- or part-time, this absence from the full-time workforce adds a
further burden to retirement income. Reduced income during these later
years of schooling impacts the level of Social Security income. Mid- and
late-life students, known as the sandwich generation, often also face
support for their children's schooling, as well as support for their
elderly parents in assisted living facilities or nursing homes.

In my case, I found that, as an only child, my parental care
responsibilities preclude my working full-time at the very time when my
income should be highest to maximize my own retirement Social Security
income. In addition, upon graduation three years ago, after four years
of no earned income, I had incurred almost \$40,000 in student loans, so
you can see the impact on retirement income.

Most private social agencies do not have programs to support advanced
education. Burgeoning social work education programs have created a
deficit in doctoral-level social work faculty. Despite that, entering
doctoral faculty in the field face salaries well below mid- to
late-career incomes in the practice arena. Thus, one who seeks to serve
the profession through research and educating future generations faces
not only reduced incomes, but also burdensome student loans, as well as
a reduced base on which the retirement funding of both private and
Social Security is predicated.

While I do not wish to imply that I am impoverished, I do want to
emphasize that the service of social workers to our nation's most
vulnerable, where work, at times, involves high personal safety risk,
should be supported by governmental recognition of this value to our
country through the forgiveness of student loans for providing service,
education, and research.

I am providing information to link to additional information on the
burden of student loans to social workers in my written testimony. We
have also heard that from the NASW. I have in my written testimony two
websites, one of which provides information about loan debt in
proportion to social work salaries by state. It should be noted that
starting salaries in a master's and doctor of social work faculty
appointments are well below that of senior social work practice salaries
in federal agencies. That is, beginning social work faculty may be
\$45-55,000, which is, if you worked through a fair career, you are
probably a little bit beyond that, so you are taking a cut just to move
into the education workforce. Another website is on the need for loan
forgiveness for social workers, and that gives a number of personal
examples that you heard earlier in earlier testimony.

I basically want to conclude by thanking you again for your attention,
and for addressing this part of the solution to meeting the needs of
social work first responders to our citizens in need. Thank you.

**DAVID BERGERON:** Thank you, Barbara.

**DAVID BERGERON:** Roger Williams. Good afternoon, Roger. You have been
another patient soul.

**ROGER WILLIAMS:** Indeed. Well, no one has been more patient than the
three of you, and you are to be commended for it.

My name is Roger Williams. I am the Executive Director of the
Accrediting Council for Continuing Education and Training, ACCET, it
goes by the acronym, ACCET. We accredit approximately 243 institutions
that operate about 650 schools across the country, and a few overseas. I
am also the Chair of the Council of Recognized National Accrediting
Agencies, which consists of six agencies. The vast majority of the
schools accredited, about 3,100 in number, are in the proprietary
sector, and range from certificate level up through the master's degree.

A counterpoint to David's comment to you all suggesting caution, I would
suggest that you need to throw caution to the wind, and I truly believe
that negotiated rulemaking is appropriate in this case. In fact, if you
look back at the last two HEAs, which the last one is so far back, we
can hardly remember it anymore, a great deal of patience has been
demonstrated, and perhaps too much.

When I reflect back on one of the issues that I would like to touch on,
which is accountability, recalling that, in 1992, when the recognition
criteria, for the first time, included outcomes on it\--in 1998, and I
speak from some experience, I served at the negotiated rulemaking at the
time, and would never submit myself to that again, but it is commendable
work, of course\--that recognition criteria was moved up to number one.
And yet, here we are, in 2006, still talking about pilots, and models,
and things that we are going to do, and it makes me wonder how either
Congress or the Department of Education has been that patient.

From ACCET's perspective, we created a set of outcome policies back in
1990, primarily focusing on completion of placement. Prior to which,
there was a single standard in ACCET that had placement listed and the
word "optional" next to it, which is rather odd, when you think that the
vast majority of ours are vocational programs. It wasn't until 1997 that
we finally passed benchmarks, and we have utilized those benchmarks.

We even have a subcommittee of the Commission called the Completion of
Placement Subcommittee that helps to focus on those particular outcomes.
We have benchmarks of 77 percent placement, and 67 percent completion,
and we have found those very important tools. They aren't\--and I think
outcomes, in general, are not simply about trying to find what the
institution does, but rather inspiring them, and inspiring often
requires some difficult decisions.

In fact, we place a number of institutions on "show cause" each year as
a consequence of not meeting those benchmarks. Many programs are removed
because they can't demonstrate that they are really productive. So we
really believe that outcomes are a very important measure.

While it is perhaps in the vocational area, and it is simple to look at
the training-related job placements, it is difficult for us to
understand why those wouldn't be used for associate degrees, as well. We
have occupational associate degrees, and most certainly would think are
fully applicable to them.

With regard to completion, which I think is going to be a very tempting
outcome that many people will not look past, in the coming of the
negotiated rulemaking, and I hope that is not the case, because, while I
believe certainly that retention, completion, and graduation rates are
very important, if they are left to stand on their own without further
outcomes, either in terms of job placement rates or in terms of learning
outcomes, particularly those that might actually have some
quantifiability to them, much as I know that word upsets people, I think
we are going to be in even greater danger of grade inflation, because if
you push with an incentive on completion rates, you are going to push
the process for people to do things that, perhaps, they would not
ordinarily do. While there isn't much talk about it, save the occasional
article in The Chronicle about grade inflation, I think it is a very
serious problem that no one has bothered to look at very carefully.

So, relative to outcomes, in general, I think the time is long overdue,
and we really need to get serious about it, and may even take some
radical approach in negotiated rulemaking. I hope it will provide some
of that.

With regard to transparency, again, if you reflect back in the late
1980s and early 1990s, for the Department of Education to even get a
letter of accreditation, it had to subpoena accrediting agencies. I have
distinct recollections back in those times, and the 1992 regulations
really were an improvement on that. It pushed us all, which is probably
a theme here\--it requires some pushing occasionally, to get the
agencies to begin publishing information. ACCET publishes some of the
actions that the Commission takes---"final actions," of course, is
really the keyword on our website.

We send all of our letters out, the actual letters themselves\--out to
the state agencies and to the U.S. Department of Education. We also
include "show cause" action, which some would call "probation," others,
"warning." It is not a requirement, but we do believe that is an
important component of communication out to the federal and the state so
they have a better picture of what status an institution is run with
accreditation at any given time.

Having said all that, and really being a believer in transparency, I do
worry that there are those who are suggesting disseminating team
reports, which I think would be a disaster. The peer review process does
require a certain level of comfort that requires a certain level of
respect\--confidentiality between accrediting agency and the
institution. If you remove that, I do believe that the peer review
process would begin to collapse, because you will end up with reports
that people know are going to be published, and therefore will be more
filled with platitudes and anecdotes than any helpful information, and I
would warn against taking that approach.

The last issue is relative to transfer of credit. I served with the CHEA
Committee back in, I think, around 1990, working on what became a
framework for transfer of credit, which I think is a very commendable
piece. It has the great pitfall, of course, of not having any teeth in
it, and that is, of course, similarly found in our recognition criteria.
While I am not at all in favor of forcing institutions to merely accept
transfer of credit, the fact of the matter is that there are very
serious implications to the current system. It is often argued that it
is too expensive, and I find that rather odd from the fact that tuition
rates are what they are. I have two kids in college as I speak, so I am
speaking with great authority here.

I would note, incidentally, that my kids' current student fees are what
I used to pay for tuition back in the 1960s and 1970s. If cost is really
the factor that is holding back transfer of credit, I would suggest that
somebody should look at fees, perhaps, as a way to get around that. But
the biggest issue, really, I think, is one of providing an incentive
that says, "This is important." And probably the only way that will take
place is if, in the recognition criteria, it says that institutions must
indeed craft and publish whatever their transfer of credit policy is. At
least it would be seen, and I think that would be an important step
forward.

Finally, I think it is very important to take note that accreditation
really holds great promise, and I think it doesn't quite realize that
promise, often, because it tends to be a bit timid. I think it is a
great enterprise. I think that the real measure of accreditation is not
the fact that an institution, or an agency, rather, has prestigious
institutions with great reputations. The real question is, "Is it
because of accreditation?" I think if we really want accreditation to do
its job better, we need to challenge accreditation to do a little better
job.

Thank you very much.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Devin Ellis.

**DEVIN ELLIS:** Good afternoon.

Number range CHAPTER Thank you all very much for hearing from us today.

My name is Devin Ellis. I am a first-year master's in public policy
student at the University of Maryland, College Park, and I am also the
Director of Academic Affairs for the University of Maryland System
Student Council, which represents all of that state's public higher
education institutions.

I was going to read from this, but I see that you are out of coffee, so
I will just try and come to the point.

**DAVID BERGERON:** We know where to get more.

**DEVIN ELLIS:** As a first-year master's in public policy student at a
public higher education institution, I have already incurred almost
\$18,000 in loan debt, and I do not anticipate that I will make it
through the remainder of my program without incurring more.

You have heard from a lot of undergraduate students this morning and
this afternoon, and also some graduates, as well, but I wanted to
emphasize the fact that the debt burden problem is a plight that is
shared by graduate students, as well. And I don't need to tell you that
this applies particularly to those graduate students who seek to use
their higher education for public service, or for work in the private or
the public sector, which does not pay well enough to make taking on tens
of thousands dollars of debt an attractive prospect.

Social workers, nurses, educators, and also many other graduate
degree-holding professionals who work in the public arena cannot expect
to make the kind of salaries that doctors and lawyers have traditionally
been able to make in the private arena that is used as an excuse to
offset the cost of attaining a graduate degree.

I, myself, am not looking forward to the beginning of my interest
payments, because, seeking to go into the field where I will most likely
be employed as a public servant, I don't need to tell any of you today
that the federal government is not known for its lavish pay packages. I
think that it is vitally important that the Department, in seeking to
fulfill the mission that has been spelled out, of making public and
private higher education in this country accountable to the public by
producing more, better highly educated professionals in engineering, in
the sciences, in leadership, and in academia, that steps be undertaken
to make that possible for people.

I am very much in favor of the five-point plan that you have heard about
today. I think most of its provisions very soundly support lightening
the debt burden on students, graduate as well as undergraduate, but I
think that the federal government also has to undertake longer term
thinking about this issue.

I would like to share with you very briefly, to highlight my concern, a
couple of statistics from my own campus, the University of Maryland,
College Park, which has over 10,000 graduate students distributed across
its departments.

In 1999 and 2000, the University of Maryland conducted a survey of all
of its graduate students, in which one of the series of questions that
they asked concerned debt and affordability. When asked if they thought
that they would incur debt in the course of their degree, 1 in 4
respondents to the survey believed that they would need loans of
\$20,000 or more in the course of their education, and only 2 in 5
believed that they could complete their degree with no recourse to
loans.

When students were asked to rank their most important source of funding
for their education, loans came in fourth out of thirteen categories,
beat out only by university assistantships, fellowships, and income from
outside employment.

When graduate students were asked to list the greatest obstacle to their
academic progress, financial difficulties was the single largest
category, with over 60 percent of respondents listing that as the
greatest obstacle to their completion of their degree.

Contrary to what our automatic assumptions might be in thinking about
the distribution of graduate student population at a large public
university, the single largest percentage of respondents to this survey
were actually from engineering, computer, and the life sciences, the
second largest category were from the social sciences and education, the
third were from business and management and the humanities, and then it
goes down steeply from there.

So, bearing that in mind, I would like to close by urging you all to
recommend and support the five-point plan that you have heard about
today, and also strongly encourage the Department to include students in
any future neg. reg. process that is undertaken.

Thank you very much for you time.

**DAVID BERGERON:** Thank you.

When we conduct a negotiated rulemaking, it is a statutory requirement
that we include students. So even if we didn't want to, we would have
to.

\[Laughter.\]

**DAVID BERGERON:** And from all of the comments that we have heard from
students over the course of these hearings, any of us who would have
thought about not including students have long since thrown that notion
out the window.

We thank you. And also, my niece is a medical student at Johns Hopkins,
and her brother was just accepted to medical school this week. So my
niece and nephew are both going to medical school, and they would take
issue with issues that would be concerned about student debt for medical
students, as well, out of graduate students.

**DAVID BERGERON:** Sarah Levin.

**SARAH LEVIN:** Hi, I am Sarah Levin. I am here on behalf of Elizabeth
Marques, who is President of the Laboratory Institute of Merchandising.
She wanted to be here and she couldn't, which is why I am, clearly,
here.

I am here to talk about the standards for determining the financial
viability of college. The third committee on the negotiated rulemaking
process will consider these institution eligibility issues, and we
recommend that this third committee review the process under which there
are exceptions that institutions can prove their financial stability.

The Department of Education should, indeed, set strict standards to
ensure the financial health of an institution. We encourage rigorous
financial guidelines to protect our students and our college
communities, but we do not agree that these standards are infallible.
While the Department's current standards most often indicate a college's
financial stature accurately, there are inherent faults and flaws in the
ratio testing that unfairly burden colleges that are, indeed,
financially sound.

Currently, the Department determines financial viability through ratios
calculated using the financial statement data using GAAP, or generally
accepted accounting principles. While these statements prepared by GAAP
generally indicate the financial status of an institution, they do
include unfair biases against institutions that hold appreciated real
property assets. With this in mind, the Department should consider
giving the Secretary discretion of reviewing and taking into
consideration the fair market value of these assets.

Colleges may be financially stable, while failing the ratio test using
the GAAP-based financial values. GAAP does not adequately value
appreciated assets. Since assets are reported at book value, book value
does not always represent the fair market value of an asset in cases
where real property has significantly appreciated over time, the GAAP
standards present a severe undervaluation of the asset.

For example, at LIM, a building they purchased was valued at \$500,000;
they purchased that in 1964. Right now, it is valued at between \$18-
and \$20 million, and on the books for GAAP standards it is only valued
at \$100,000, which is a severe undervaluation.

In these extraordinary circumstances where GAAP-based financial
statements exponentially undervalue assets, the Secretary and the
Department of Education should have the discretion to review these cases
and to grant exemptions to the ratio test. It is detrimental for the
financially secure institutions to obtain these costly letters of credit
in order to maintain financial aid for their needy students.

Currently, if an institution fails the required ratio tests using the
GAAP standards, it can remain fully certified by making available a
letter of credit in the amount of 50 percent of the student aid
provided. Also, an institution can be provisionally certified by making
a letter of credit in the amount of 10 percent of student aid available.
We suggest that the Secretary of the Department of Education have the
discretion to allow an institution to remain fully certified by
providing a letter of credit in the amount less than 50 percent after
reviewing a full review of the institution's financial statements using
the current fair market value of the assets of the institution. We are
not suggesting changing the regulations or allowing financially unstable
institutions to harm students' educations, but we are advocating that
the negotiated rulemaking committee have the opportunity to discuss
these standards, and recommend that both the Department of Education and
the Secretary have the ability to consider, and have the discretion to
review, these exceptional cases.

Thank you for your time.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Jennifer Pae.

**JENNIFER PAE:** Speaking of students on the committees, my name is
Jennifer Pae, and I am the elected President of the United States
Students Association. We are the country's oldest and largest national
student association, representing millions of students nationwide.

As a coalition of student governments and statewide student
associations, we are here today, again, from Berkeley, and Chicago, and
Orlando to once again express our concerns in high hopes that the
Department will adopt for the negotiated rulemaking process.

As students have organized across the country for this year's midterm
elections, they have used issues such as divestment from higher
education as a driving force to turn out to the polls. In the past two
months, USSA has registered more than 40,000 students in five targeted
states, and so many students turned out in record numbers over the 2002
numbers. The University of Michigan at Ann Arbor\--they stated their
numbers were over 160 percent.

Today's students are committed to securing access to higher education,
and we urge you to consider ways to reduce student debt burdens,
increase grant aid, and increase access to higher education as you begin
negotiated rulemaking. The newly created ACG and SMART Grants can
provide an additional 500,000 students with funds necessary to pursue a
college degree, but existing regulations have made the grants confusing
to students, and difficult to allocate for financial aid administrators.
At a time when it has become more difficult to access higher education
due to costs and opportunity, we should be providing these grants for
the most needy students in order to achieve success in this country.

In addition, restricting these grants to only full-time college students
who recently graduated high school excludes many non-traditional
students and part-time students. As our organization represents millions
of students across the country, these grants clearly do not create
access for them. Furthermore, students who are eligible for the Pell
Grant, but are not recipients, should be allowed to receive these
grants. The current regulations only allow Pell Grant recipients to
benefit from this award. While we applaud the Department for creating
these new grants, we hope that you will consider amending the
regulations to ensure that more students have the opportunity to receive
them.

An additional concern for students include the need to make college more
affordable, of course, by limiting student loan repayments to a
reasonable percentage of a borrower's income. Recent graduates who
pursue careers as teachers or in the non-profit sector will have the
ability to successfully manage their student loan repayments. We would
also like the Department to recognize that borrowers with children have
less income available for student loan payments. Family status should be
taken into account when determining their loan repayments.

Finally, we urge the Department to protect student borrowers from high
interest charges when they face hardship situations. Due to the recent
cuts in the student loan program, students are facing much higher
burdens, and we must ensure that students are protected from
unmanageable levels of debt. It is important for students to not only be
able to afford the repayments of their loans, but there should be
safeguards in place to help them in times of financial instability.

Research shows that 40 percent of students do not pursue graduate school
because of their student loan debt. Each year, millions of graduates
delay some of life's most important decisions, as you may know,
including purchasing a home, getting married, and starting a family
simply because they are burdened with student loan debt.

As college costs continue to skyrocket, the average family is
continually finding it harder to afford college. Just yesterday, while I
was in the state of Michigan, they passed an extremely harmful ballot
initiative, similar to a proposition in California ten years ago, which
has dramatically affected the higher education system, which will
eliminate Affirmative Action programs, not only in education, but the
job market, as well. Unfortunately, this will target many first
generation, low-income students of color, and will close the doors of
higher education for many qualified individuals. We must provide for the
success of today's students, and for future students, in order for our
country to succeed in a global economy, especially for those that have
the most potential.

The Spellings Commission Report concluded that 90 percent of the
fastest-growing jobs in the new information and service economy would
require a postsecondary degree. If our nation intends to compete in this
changing global economy, we need an educated workforce, and, sadly, many
of those students who are shut out from pursuing a higher education are
low-income and minority students.

We urge for the Department to provide a higher educational system that
is affordable and accessible to all. Twenty years ago, anyone who wanted
to pursue a college degree was granted that opportunity. Unfortunately,
students today do not have that luxury. Millions of students are working
full-time, raising families, and drowning in unmanageable debt, just to
put themselves through school.

Increasing grant aid and making loans more manageable will allow more
students an opportunity to access the doors of higher education. While
we know that it is not within the Department's jurisdiction to increase
appropriations for these federal programs, we ask that you do whatever
you can to make college a reality for students across the country, and
not simply a dream.

We are eager to work with the Department, and truly represent students
from across the country throughout the negotiated rulemaking process and
the table, as we have in the past. So, look forward to our nominations,
not only for myself and the Vice President, but our Legislative
Director. And we hope through all the testimonies for the Commission on
the Future of Higher Education, as well as these public hearings for the
Department, that you take these testimonials to heart, because they are
true stories of what is going on in today's higher educational system.

Thank you for the time and the opportunity, and we look forward to
talking to you again soon.

**DAVID BERGERON:** Thank you, Jennifer.

I would note, as I said earlier, we can't change statute; full-time is a
requirement of the statute for Academic Competitiveness Grants and
National SMART Grants. We did make a change in the final rule to address
one of your issues related to Pell recipients.

**DAVID BERGERON:** Jesse Fenner.

**JESSE C. FENNER:** Good afternoon.

**DAVID BERGERON:** Good afternoon.

**JESSE C. FENNER:** My name is Jesse Fenner, and I am an alumnus of the
Upward Bound Program from the University of Chicago, and I am here today
to voice my support for Upward Bound, and to ask that the Department
ensure that its proposed priorities take into account, reflect upon,
three things that I think make the Upward Bound Program that I
participated in a successful program.

Those three things are: establishing trust, a partnership, and a safe
haven. Many Upward Bound participants or potential Upward Bound
participants have, at some point in their life\--they have been failed,
either by schools that did not adequately prepare them for high school
and college, by family that did not adequately support them in their
endeavors, or by their community that failed to provide them with safe
schools or safe neighborhoods.

These things create barriers to reaching out to students. I don't think
that the Upward Bound Program needs any more barriers. I would ask that
the Department make sure that its proposed priorities give the Upward
Bound Program the flexibility not only to reach out to the students who
fall within the four corners of your proposed priorities, but those
students who come to Upward Bound.

I was one of the students. I wasn't a poor student, I was just poor.
There were a lot of factors pulling at me, and pulling at my family.
Among my brothers and sisters, there are six of us. All of us were
excellent students up through the eighth grade, but three dropped out of
high school, two graduated from high school with no college, and then
myself. With partnership with Upward Bound, I was able to go to Harvard
University, and am now an attorney today.

So I think that Upward Bound\--in the program that I participated in, it
has to engage in a trust-building process with the participants, and it
needs the flexibility to do that. I think, because of that, that the
students or the participants who come to the program won't necessarily
fit in the four corners of the proposed priorities, and I would ask for
flexibility in that.

The second thing is partnership. I was able to achieve the things that I
was able to achieve in partnership with Upward Bound, and I would ask
that the proposed priorities enable all participants, all students
enrolled in Upward Bound, to be full partners with Upward Bound in
mapping their educational achievement. I don't know what I would have
done if I were in a control group. I don't think I would be standing
here today, but I would ask that the Department include some flexibility
that, if a student wants to be a full partner with Upward Bound, that
they are not rejected, and that they are able to get the resources that
they request.

And the last thing, a safe haven. I know my neighborhood was not safe. I
spent as much time as I could at Upward Bound and, at times, I brought
people with me who were there, and none of them got rejected; none of
them were asked what their grade point average was, what their test
scores were, they were just provided with help. I would ask that the
Department, in its proposed priorities for Upward Bound, ensure that the
program remains inclusive, that it is not restrictive or exclusive, and
that the students who come to seek help from the program can actually
get it.

Thank you.

**DAVID BERGERON:** Thank you.

**DAVID BERGERON:** Alys Cohen. How are you?

**ALYS COHEN:** I am great, and I am impressed that you pronounced my
name correctly.

**DAVID BERGERON:** It's been one of those days that I have had good
success and bad success with pronouncing names, but thank you. You are
our last scheduled witness. There may be others that may want to say
something, but they are not on our list.

**DAN MADZELAN:** So take your time.

**DAVID BERGERON:** Take your time. You have half an hour.

**ALYS COHEN:** I am Alys Cohen. I am a staff attorney at the National
Consumer Law Center.

Twenty years ago, I was a member of NYPIRG and USSA, so I would like to
associate myself with all those students who made wonderful remarks
today.

As a public interest lawyer, I will be paying back my student debt until
my three and four-year-old are starting to enter college, and I am the
sister of a social worker.

But today, I am here on behalf of members of the legal assistance
community who represent low-income students and borrowers. We support
the lawyers and the borrowers directly in their effort to deal with
their student loan problems, and we get calls every week from lawyers,
and not all borrowers have lawyers, trying to parse through the
situations that their clients have. Most of the time the answer is, "The
regulations don't go far enough for your client."

Let me talk about some of those regulatory issues. We urge you to
address the issue of student loan repayment burdens in the negotiated
rulemaking. Debt has become a primary way that Americans pay for
college. Borrowers are increasingly, through no fault of their own,
faced with payments that are simply unaffordable. It is important for
students to understand the importance of fulfilling their obligations;
however, these obligations must be balanced against other important
interests, including encouraging access to education and providing
relief for vulnerable borrowers and victims of fraud.

Unfortunately, the current federal protections are poorly designed, and
fail to provide a functional safety net for student loan borrowers.
Fortunately, you have the legal authority to improve their safety
through the upcoming rulemaking. We ask you to adopt the five-point
plan, about which you know very much, and we especially ask you to give
special consideration to some additional recommendations that
particularly affect the lowest income borrowers.

Number one, we ask you to expand the availability of income-contingent
repayment plans by offering these plans through rehabilitation, in
addition to consolidation, and by allowing borrowers in default to
reconsolidate defaulted, Direct, and FFEL consolidation loans in order
to access the ICRP.

Number two, we ask you to strengthen the safety net for the most
vulnerable borrowers by tying the definition of disability for purposes
of canceling loans to the standards set by the Social Security
Administration, by restoring the seven-year grounds for discharging
student loans in bankruptcy, and by repealing the bankruptcy
non-dischargability provisions that apply to private loans.

Number three, we ask you to develop and support programs that can
provide objective, in-depth assistance to borrowers experiencing
problems with student loan debt.

Number four, improve monitoring of private collection agency activity,
and relieve other collection burdens by only charging collection fees
that are bona fide and reasonable by re-imposing a statute of
limitations for student loan collections, and by creating a rigorous
training program for collectors that includes regular oversight and an
accessible system to handle borrower complaints.

And number five, since it is a companion to the five-point plan, ensure
that borrowers can enforce their rights by creating an explicit private
right of action to enforce key provisions of the Higher Education Act.
As a former government lawyer myself, I appreciate the power of
government enforcement, but there is nothing like a private cause of
action to get actors to do the right thing.

One other thing that is not on here that I would like to add. Right now,
in Congress, they are looking at FHA modernization. What they are trying
to do is make the FHA program for low-income homeowners be relevant. The
biggest challenge to that is the abuse in the private loan market. As
the private loans expand in the student loan market, I don't want to see
the same thing happen because of the heaviness, and the complexity, and
the limitations of the government student loan programs.

On the subject of who participates in the rulemaking, we nominate Deanne
Loonin, staff attorney with NCLC, and Bob Shireman, Executive Director
of the Project on Student Debt, to represent legal aid organizations and
their low-income clients in the upcoming negotiated rulemaking process.
We appreciate the consideration of our nomination.

When I was coming in here today, I came to the first building with the
little red school house and it said, "Door closed. Try the next
entrance." And I came to the next door and it said, "Door closed. Try
the next entrance." I hope that we won't have a lot of doors closed for
those that are trying to better themselves.

Thank you.

**DAVID BERGERON:** Thank you.

That is the last witness we have scheduled. We will stay here for the
next 25 minutes if there are other people who want to say something.

But while there is no one here at the microphone to do that, let me just
say\--I have said my thanks to students at various times during the day.
As we have gone around the country, we have been tremendously impressed
by our students. They have provided, in every case, something unique and
special associated with that particular student, but also, they have
spoken for their friends and colleagues on the campuses, and we have
appreciated that. I appreciate everybody's patience who stayed all day
today, and there have been a number of you listening with us as we have
listened to testimony.

So, with that, we are just going to sit here and hang out for the next
24 minutes, unless there are others. If there are others that are here
that want to speak, they can do that.

**DAN MADZELAN:** We are considering this open mike time.

\[Open microphone from 3:38 to 4:00 p.m.\]

\[Whereupon, at 4:00 p.m., the hearing was adjourned.\]