U.S. DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

**PUBLIC REGIONAL HEARING ON**

**NEGOTIATED RULEMAKING**

Monday, October 6, 2008

9:00 a.m. -- 4:00 p.m.

Johnson C. Smith University

100 Beatties Ford Road

Charlotte, North Carolina

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

**MS. McCULLOUGH:** Good morning. I\'m Carney McCullough from the
Department of Education, the Office of Postsecondary Education. To my
left is Pamela Maimer, also with the Department of Education Office of
Postsecondary Education. Out front, we have Nicky Harris and Patty
Chase, from the Office of Postsecondary Education. They are the ones you
met when you came in and signed you in.

On behalf of Secretary Margaret Spellings and Acting Assistant Secretary
Cheryl Oldham, I would like to welcome you today to our fourth regional
hearing. I also want to say a particular thank you to Johnson C. Smith
University and President Ronald Carter for hosting this event this
morning. We really appreciate that. As I mentioned, this is the fourth
of six hearings throughout the country that we are having on gathering
information from you about the agenda and the issues that we should
consider during the negotiated rulemaking that we will be conducting as
a result of the recently enacted Higher Education Opportunity Act of
2008, the reauthorization of the Higher Education Act. So, basically,
today, we are listening to you, to what you have to say to us. There is
a sign-up sheet out front. Some of you may have come in through the back
way. So, if you are interested in testifying or presenting oral comments
today, if you\'d come down and sign in, you can sign in anytime
throughout the day. We\'re going to allow about five minutes for each
commenter. We have a sign interpreter up here, if you need assistance in
that way. We are also accepting written comments through October the
8th, which is Wednesday. Also, if you brought written comments and you
want to give them to us after you finish testifying, that is fine as
well. The address for the written comments is, through the Internet, it
is <HEOA08@ed.gov>, if you wish to submit written comments.

There was more information on the Federal Register notice that we
published on the 8th of September. Let me just talk a little bit about
negotiated rulemaking, for those of you who may not be as familiar with
it. The first thing we do when we are conducting negotiated rulemaking
is we are required to do for certain parts of this act is we have public
hearings. We hear from you about what are the issues that you think are
important for us to focus on and to hear what you have to say about
that. We go back, we consider what we\'ve heard and figure out exactly
how many committees we are going to need to have and sort of what those
committees are going to talk about, what is going to be sort of the
scope of their work, and then we\'ll publish another Federal Register
notice sort of announcing that information and soliciting nominations
for negotiators to come and sit at the table and be negotiators in this
negotiated rulemaking effort. Our actual negotiations will probably
start around February. As you know, we will be having a new set of
bosses in January. So we are doing as much as we can in anticipation of
that, but we probably won\'t start actual negotiations until February.
Each one of the committees meets three or four times over the course of
three or four months and, at the end of that time, we hope to have
consensus on the Notice of Proposed Rulemaking to be published in the
Federal Register.

And then we go through the normal and usual and customary process of
accepting public comments on that Notice of Proposed Rulemaking. After
that, we go back and we review the public comments, to get everything
right, is there tweaking that needs to be done here or there, what might
we need to change, and we\'ll publish the final regulations. For the
Title IV programs, we\'re subject to a master calendar, which means that
we\'ll have to have those final regulations published by November 1st of
2009 for them to go into effect for the 2010-2011 award year.

Pamela, would you like to say anything?

**MS. MAIMER:** Well, thank you, Carney.

It\'s wonderful to be here. It\'s a beautiful campus here at Johnson C.
Smith, and we are very pleased and honored to be able to listen to your
comments today. If you would, make sure that when you speak that you are
speaking so that everyone can hear you and that we have 10 minutes per
person for your comments. So I just wanted to say welcome. Now, I\'m
going to turn it over to the President, Ronald Carter, to give you some
comments.

**MR. CARTER:** Thank you very much. A very good morning to all of you.
I am Ron Carter, a three-month, eight-day-old 13th President of Johnson
C. Smith University. The trustees, faculty, staff, and students are very
honored to have the opportunity to host this regional hearing for the
United States Department of Education. Want to thank all of you for
coming to Johnson C. Smith University today to participate in this
important first stage in the negotiated rulemaking process. I also would
like to thank Secretary Spellings and the Department of Education staff
for choosing Johnson C. Smith University to host the fourth in a series
of six regional hearings. We strongly support the Department\'s efforts
to carry out these public hearings in compliance with the new law.

Ms. Cynthia Anderson, Johnson C. Smith University\'s Financial Aid
Director since 1995, will present testimony later today. Cynthia has a
deep understanding of student financial aid administration. While Mrs.
Anderson will make recommendations on behalf of Johnson C. Smith
University, others will suggest particular issues and agenda items that
we want to convey to the Department of Education as they work on
implementing the changes made to the Higher Education Act of 1965 by the
Higher Education Opportunity Act of 2008.

As you know, negotiated rulemaking is required for all Title IV Federal
financial aid programs and a new teacher preparation program provision.
Funding for higher education is a vital investment the Federal
Government makes for millions of our students. As Charlotte\'s
independent urban university and one of the country\'s Historically
Black Colleges and Universities, we feel it is important to have the
HBCU community represented as a negotiator as this important process
progresses. The United Negro College Fund, the Thurgood Marshall College
Fund, and the National Association for Equal Opportunity in Higher
Education would like to work with the Department in identifying the
negotiators to represent the HBCU community. Some issues that are of
particular importance to Johnson C. Smith include: One, establishing a
new policy governing institutional and student eligibility and
participation in the year-round Pell Grant Program during a single award
year; two, propose regulatory changes governing the statutory
modifications and the calculation of cohort default rates; and, three,
proposed regulations that would implement the new statutory requirement
limiting student eligibility to receive a Pell Grant to 18 semesters.

Again, I am delighted that we are hosting one of the six regional
hearings, and I want to welcome all of our panelists and you from the
Department who are here today. Do your best thinking, for the future of
our institutions is in your hands.

Thank you.

**MS. McCULLOUGH:** Our first speaker is Belle Wheelan, from SACS.

**MS. WHEELAN:** Good morning. My name is Belle Wheelan, and I have the
pleasure of serving over 800 institutions in 11 Southern States, Latin
America and now Dubai, as President of the regional accrediting body
known as the Commission on Colleges of the Southern Association of
Colleges and Schools or SACS. Additionally, I am a member of the Council
of Regional Accrediting Commissions, or CRAC, the organizing body which
ties together each of the seven regional accrediting commissions that
collectively represents more than 3,000 institutions of higher education
in the United States, enrolling more than 17 million students.
Appreciate the opportunity to address this panel on the crucial issue of
accreditation and several other issues under consideration during the
Department of Education\'s rulemaking process for the recently
reauthorized Higher Education Act.

Accreditation in the United States is a nongovernmental, peer-review
process, designed to evaluate and ensure the quality of educational
institutions and programs in our institutions of higher education. Each
of the accrediting bodies is recognized by the United States Department
of Education and the Council on Higher Education Accreditation, or CHEA,
and SACS has been continuously recognized by the Department since the
recognition process was initiated in the early 1950s. Not only does
accreditation signal to the general public that an institution has
successfully demonstrated that it meets all of the standards that have
been developed to ensure quality in all of its programs and services,
but we also know that DOE uses accreditation as a prerequisite for
institutions to obtain Federal Title IV student aid. Through a network
of professional peers and members of the general public, the evaluation
process assesses formal educational activities, including the
development and assessment of student learning outcomes as well as such
things as governance and administration, financial stability, library
and learning resources, admissions and student support services, and
institutional and educational effectiveness.

During the recent process to reauthorize the Higher Education Act,
accreditation was one of the central issues addressed. Consequently, we
believe that it will also continue to be one of the most important
topics facing the Department as it drafts regulations to implement this
new law. We urge the Department to take special care to ensure that the
committee structure that is chosen for this rulemaking process is done
in such a way as not to lump accreditation in with dozens of other
unrelated issues. We also ask that care be given to getting the right
people with the right expertise at the table when this issue is
considered. Please know that the members of CRAC stand ready to be
helpful and active participants in the rulemaking process. While
Congress made it very clear that the negotiated rulemaking process
should not promulgate regulations dealing with the standards used by
accrediting bodies to ensure academic quality, there are other key
policy issues that we believe could be clarified during the neg-reg
process. Would like to briefly outline a few now.

Under distance learning, CRAC is uniquely aware of the issues facing
online education today. We were in front of this issue several years ago
when we adopted and implemented a common statement called, \"Principles
of Good Practice,\" an electronically offered academic degree and
certificate program that had been developed by the Western Cooperative
for Educational Telecommunications or WCET. WCET has recently developed
another document that identifies some of the strategies that have
already successfully been adopted by institutions to ensure the
integrity of their electronically delivered programs. Though the student
authentication requirement would not be overly onerous to the majority
of accredited online and distance learning providers, it could drive up
the cost of these programs if expensive procedures are mandated.

There is an obvious concern on the part of Congress to ensure that
students who enroll in courses delivered through this medium are the
same ones who attend and participate throughout the entire length of the
course. However, the community is not aware of a significant problem in
this area. Therefore, during the rulemaking process, it will be
important to know the extent of the problem before mandated solutions
are put in place. Since the majority of students who enroll in distance
learning courses and programs are adult learners, many of whom are
returning for job preparation and who have limited incomes anyway, the
cost of implementing the system will be another unfunded mandate and the
cost will fall to them to bear.

Due process. The issue of ensuring that accrediting bodies provide their
members with due process throughout the accreditation process, including
during possible withdrawal procedures, has always been of vital
importance to members of CRAC. Loss of membership is never taken lightly
and procedural fairness and due process have always been integral parts
of the process. At the same time, we must not have so many stringent
process protections that we lose our ability to take decisive action to
protect the best interest of students and their families when we find
wrongdoing or an inability of an institution to comply with the
accreditation standards. Over the years, CRAC members have made a number
of positive changes to their procedures, and we believe that every one
of the regional accreditors already have processes in place to reflect
nearly all of the changes in the new law.

Under monitoring institutional growth, there is language in the new law
requiring accrediting bodies to monitor the growth of institutions that
are experiencing significant enrollment growth. Regional accreditors
already make a practice of monitoring the growth of our institutions and
unusual changes they might experience. Any attempt to define the
parameters of what constitutes significant growth or define steps that
must be taken to address a particular situation would likely be very
difficult, in our view. Rulemaking that creates a rigid, one-size
fits-all structure will limit our ability to respond in a nimble and
efficient way. Transfer of credit. The law requires accreditors to
confirm that an institution has transfer of credit policies that are, A,
publicly disclosed and, B, include a statement of the criteria
established by the institution regarding the transfer of credit earned
at another institution of higher education. These provisions give clear
direction to accreditors to ensure a transfer of credit policy is in
place and does not give license for an overall evaluation of any
particular policy used by an institution or group of institutions. We
believe that this language is fairly straightforward and unambiguous and
does not need to be further refined in a regulatory process. The
protections of the Higher Education Opportunities Act have struck a
careful balance between all segments of the higher education community.
Too much regulatory tinkering or reaching beyond the original intent of
the law or allowing too many outside interests to reopen issues that
were resolved by Congress could upend this balance.

Finally, we urge the Department to keep two overarching principles in
mind during this rulemaking process: consultation to achieve buy-in from
all parts of our community and flexibility to allow accreditors to adapt
the policies to the individual circumstances that present themselves to
our Commissions. Thank you for allowing me to testify today. Please feel
free to call upon me or any of my colleagues in accreditation if we may
be of any assistance, formal or otherwise, during the rulemaking
process.

**MS. McCULLOUGH:** Thank you very much. Jack Henderson.

**MR. HENDERSON:** Good morning. My name is Jack Henderson, and I am
President of the Brookstone College of Business, a proprietary
institution with two campuses here in North Carolina. I am also
President of the North Carolina Association of Career Colleges and
Schools, a professional organization of North Carolina private career
schools. From 1998 to 2003, I served as a Commissioner with the
Accrediting Council for Independent Colleges and Schools, ACICS, a
nationally recognized accrediting agency by the U.S. Department of
Education, serving in 2003 as chair of the Council.

While a Commissioner, I also worked with the Department in the selection
of Round 1 and 2 for the Department of Education\'s Distance Education
Demonstration Program, reviewing the applications on their behalf. I
would like to thank the Secretary for this opportunity to come before
you and present my views on the Higher Education Opportunity Act.

I would like to address two areas of the Higher Education Opportunity
Act, 90-10 and copyright infringement. The Higher Education Opportunity
Act provides additional flexibility to institutions for the period July
1, 2008, to June 30, 2012, allowing them to count the net present value
of institutional loans made during that period on a cash basis toward
90-10 compliance. There are several issues related to this provision
that I would like to address.

One, the language requires that the loans be issued at intervals related
to the institution\'s enrollment periods. This language should be
interpreted broadly to allow an institution to issue these loans on an
annual basis to students and not require that there be multiple
disbursements. The concern that this provision was trying to address was
that institutions would wait until the end of their fiscal year and only
make institutional loans needed to reach their 10­percent target. My
institution and many others have multiple class starts each fiscal year,
providing these institutional loans to students at the beginning of
those students\' academic year would spread the loans out over the
course of the institution\'s fiscal year. Auditors and program reviewers
could easily cross-reference disbursement dates with the institutions\'
enrollment periods.

Two, the law also requires that the loans be subject to regular
repayment and collections. The regulations related to this provision
need to allow for the deferment of payment on an institutional loan
while the student is enrolled. Deferment of payments is in the best
interests of student borrowers.

Three, the provision requires that the net present value be determined
by the CPAs in accordance with generally accepted accounting principles
and related standards and guidance. Would ask that the Department not
regulate this concept but rather leave it to the expertise of the CPAs.

Four, the law provides that an institution cannot, in later years, use
the revenue derived from repayments on loans toward 90-10 compliance if
they use the accrual value of those loans in a prior year. This
provision requires an institution to make a choice each year as to
whether to use the accrual method or to save those loans for use on a
cash basis later. The law is intended to provide flexibility to schools
in achieving 90-10 compliance through the use of this temporary
provision, and that intent would best be served by allowing institutions
maximum flexibility to make a decision on a loan-by-loan basis each year
rather than being required to treat all loans in a given year the same
way.

The Higher Education Opportunity Act provides that for loans disbursed
from July 1, 2008, to June 30, 2011, an institution can treat as
non-Title IV revenue the amount of Stafford Loan disbursed to a student
that exceeded the loan limits that existed prior to enactment of the
Ensuring Continued Access to Student Loans Act, Public Law 110-227. The
intent was, during this period of a tightened credit market, to allow
funds that otherwise would likely have been provided by private lenders,
but will now be provided under the authority of the temporary increase
in loan limits, to count toward 90-10 compliance. A couple of
implementation issues arise.

One, because Stafford Loans are divided into multiple disbursements, the
question arises as to how an institution will attribute the extra loan
amounts, especially in instances where some disbursements will cross
over into the next fiscal year. The most sensible method for handling
this issue would be to attribute the extra loan amount to each payment
period in proportion to its relation to the total amount of Stafford
Loan as it was initially packaged. For example, assume a financial aid
package includes a \$6,000 unsubsidized Stafford Loan. The loan will be
disbursed in two disbursements, with the first disbursement occurring in
one fiscal year, the second disbursement occurring in the subsequent
fiscal year. The amount of each disbursement is \$3,000. The law allows
for \$2,000 of the \$6,000 to count as non-Title IV revenue. In this
example, the institution should be allowed to count \$1,000 from each of
the two disbursements as non-Title IV revenue. Schools should not be
required to go back after the close of the fiscal year and reattribute
the loan back to Title IV revenue if the student subsequently drops out
and does not receive the remaining disbursement. Adopting a narrow view,
allowing only amounts in excess of the original loan in this example,
defeats the purpose and intent of the provision. Similarly, if a student
drops out during the fiscal year and the funds are subject to return of
Title IV funds calculation, the amount of Stafford Loan returned should
be proportionately attributed to the extra and regular Stafford Loan
amounts for purposes of the 90-10 calculation. The Higher Education
Opportunity Act requires that institutions take steps to prevent
students from illegally downloading and peer-to­peer sharing of
copyrighted material. This provision was aimed mainly at traditional
colleges and universities that provide high-speed Internet connections
to their students in dormitories. My institution does not offer housing.
Computers are utilized in the classrooms under the supervision of a
faculty member. The risk of illegal downloading and sharing of
copyrighted material is minimal at best. The regulations implementing
this provision should, therefore, place less of a burden on institutions
that do not have dormitories or other residential facilities where
Internet connections are provided for students. Burdensome regulations,
where there is little risk, serve only to increase the costs to the
institution and, ultimately, the students.

Again, I wish to thank the Secretary and the panel for the opportunity
to express my views. Thank you. Have a great day.

**MS. McCULLOUGH:** Thank you. Sherri Avent.

**MS. AVENT:** Good morning. My name is Sherri Avent, and I am the
Director of Financial Aid at North Carolina A&T State University.

I bring you greetings on behalf of our Chancellor, Dr. Stanley F.
Battle. I have worked in the financial aid field for about 27 or more
years, including service at St. Augustine\'s College in Raleigh. I am
pleased to appear this morning as a member institution on behalf of
Thurgood Marshall College Fund. North Carolina A&T is North Carolina\'s
third oldest and its largest Historically Black Institution, as well as
its only Historically Black Land Grand Institution. It was chartered by
the North Carolina General Assembly in 1891, as a State\'s Historically
Black Land Grant Institution, following Congress\'s enactment of the
second Morrill Act of 1890. We are proud to be America\'s largest
producer of African-American engineers. The Thurgood Marshall Fund was
founded in 1985 as the fund-raising organization for the nation\'s
Historically Black Public Colleges and Universities. The Fund launched a
major public policy advocacy and information initiative for its 47th
Historically and Predominantly Black Colleges and Universities member
institutions in 2003 and has worked closely with its member
institutions, the Congress and its HBCU partners association during the
five-year Higher Education Act reauthorization process. I am pleased to
join the dedicated representatives of the U.S. Department of Education,
my peers and friends in the financial aid community, my colleagues in
the higher education community to outline several of the primary issues
that we believe should be included in the plan agenda for the 2008-2009
negotiated rulemaking session with regard to the Title IV student
assistance. Mr. Dwayne Ashley, President and CEO of Thurgood Marshall
Fund, has sent a letter to Secretary Spellings, outlining all of the
issues that the Fund believes should be addressed in the negotiated
rulemaking sessions. I will simply highlight several of these issues.

First, the Higher Education Opportunity Act includes a statutory change
that would amend Section 401 of the Higher Education Act to establish a
limit of 18 semesters or the equivalent with regard to the students\'
eligibility to receive a Pell Grant for all the students who receive
Pell Grants on or after July 1st, 2008. The Secretary of Regulatory
Authority to interpret this new statutory requirement could have
significant impact on the persistence of lower income and some minority
and first-generation college students. Accuracy and clarity in any
regulation implementing this statutory change are critical to a
successful implementation.

Second, the Higher Education Opportunity Act also includes a statutory
change with regard to the calculation of institutional cohort default
rates. Section 435 was amended to add a third year to the period for
calculating an institutional cohort default rate, which will have the
practical effect of increasing default rates at certain institutions. It
appears that the new calculation could negatively impact the default
rate at Historically Black Colleges and Universities.

Third, the Higher Education Opportunity Act also includes numerous
changes in the Federal Family Educational Loan Program and the Ford
Federal Direct Student Loan Program. Since HBCU students rely
disproportionately on Federal student loans to pay for college, any
change, good or bad, can impact enrollment and the opportunity for our
students to gain access to college and the ultimate survival of the
HBCUs because of the high tuition dependency. Thurgood Marshall and the
HBCUs would like to be represented on the Loan Committee organized for
this 2008-2009 negotiated rulemaking.

Finally, Thurgood Marshall was one of the only three or four national
higher education associations, including the United Negro College Fund,
that advocate for the creation of the year-round Pell Grant. We believe
that our students will benefit from the award of a second Pell Grant in
an award year, allowing them to attend college year round by enrolling
for a third summer semester. While some students that would normally
graduate in four years would finish in three by attending year round, we
strongly support a regulatory interpretation that provides for maximum
institutional participation and student eligibility for the year-round
Pell Grant Program. The Historically Black College and University
community has been represented at each negotiated rulemaking session
that follow a reauthorization of the Higher Education Act. The three
major HBCU associations, the National Association for Equal Opportunity
in Higher Education, NAFEO, the Thurgood Marshall College Fund and the
United Negro College Fund, have collaborated in order to ensure the
presence and participation of the entire HBCU community and our member
institutions in these important regulatory deliberations.

Because of the important issues outlined above and others that impact
our community that we have not mentioned, we look forward to
participating in the 2008-2009 round of negotiations. My comments
relative to the hearing today represent my thoughts and views on behalf
of Thurgood Marshall College Fund.

Thank you for the opportunity to speak before you today.

**MS. McCULLOUGH:** Thank you. William Cameron.

**MR. CAMERON:** Good morning. My name is William Cameron. I am the
Assistant Vice Chancellor for Information Security at the University of
North Carolina, Chapel Hill.

I would, first, like to thank the Department of Education for providing
this opportunity to make comments. I would also like to thank Johnson C.
Smith University for hosting this event.

In response to the recent signing of the Higher Education Opportunity
Act, with the sections imposing new duties on universities to take an
active role in combating illegal file sharing, we, as representatives of
the University of North Carolina at Chapel Hill, would like to take this
opportunity to submit the following comments regarding any new rules
that may be developed to further define and/or enforce Sections 488 and
493. Specifically, Section 493 requires that every college and
university develop plans to effectively combat the unauthorized
distribution of copyrighted material, including through the use of a
variety of technology-based deterrents. We believe this language is
intentionally vague. Appropriately, the lack of further definition
intends to provide academic institutions with the maximum flexibility in
meeting this new requirement. We are concerned that, as a part of the
planned enforcement efforts, further rules will be developed which may
limit colleges\' and universities\' options in how they pursue
effectively combating the unauthorized distribution of copyrighted
material. Such additional rules may result in significant and unintended
consequences. As we are sure you are aware, in terms of information
technology, college environments are both diverse and complex.
Institutions have made significant investments in their IT
infrastructure with the goal of enhancing information sharing. Should
the Department of Education seek to be more specific in its rulemaking
process to define and limit what is meant by acceptable technology-based
deterrents or if inappropriate metrics are applied to measure an
institution\'s success in effectively combating the unauthorized
distribution of copyrighted material, we are concerned that long-term
severe and unintended consequences may result.

If implemented without proper consideration, rules may be established
that require specific technologies that are expensive, limiting and
ineffective. Arbitrary deadlines could be set which will require a
reprioritization of equally or more important initiatives. Additionally,
the selection of poor metrics to measure effectiveness could result in
wasted resources and inaccurate assessment of a college\'s progress in
helping address the illegal distribution of copyrighted material. These
profound and unintended consequences are possible if thorough
consideration is not given during the rulemaking process. In conclusion,
we, the representatives of the University of North Carolina at Chapel
Hill, recommend that any planned rules directed at enforcing Section
493, as well as Section 488, be included as a part of a negotiated rule
process to ensure that thorough consideration has been given before
developing any related rules. We further request that the rules for
Sections 493 and 488 be tasked to a negotiated rulemaking committee that
is dedicated just to this issue. The rulemaking committee should be
composed of members with the background, skill, and diversity required
to develop appropriate rules that meet the language of the act, while
providing institutions with the maximum flexibility to meet the new
requirements of the HEOA in a way that minimizes the adverse impact to
college environments.

We specifically request that EDUCAUSE be included in any rulemaking
body, as this association has a rich history of addressing this issue on
behalf of our community and a deep understanding of the issues facing
higher education institutions in dealing with this complex and difficult
issue.

Thank you, again, for this opportunity today to express our comments and
our concerns.

**MS. McCULLOUGH:** Thank you. Cynthia Anderson.

**MS. ANDERSON:** My name is Cynthia Anderson. I want to thank you for
inviting me to speak. I am the Director here, tomorrow will be 13 years.
My background, for the last 20-something years, has been financial aid.
I started at the University of Wyoming, which was a state school, I went
to a proprietary school for several years and then went into the private
schools. I think what I would like to say is more from the trenches
because those that make the rules are out there, but we have to enforce
the rules.

Some of the things that I have seen that has change drastically in the
last several years is the Pell Grant eligibility. They have raised the
eligibility, but they have lowered the EFC, so we have a lot of
middle-class parents that are not eligible for the Pell Grant anymore.
So we can limit the semesters they get it or we can broaden the
semesters they get it, but we have a huge gap for middle-income
families, and it is stopping those students from coming to school. The
adding a semester for students I believe would help them. They could
possibly finish quicker. And with a private school, that would be very
important just because of their loan indebtedness that we see now.

The default rates. I hate to even mention the default rates because they
are confusing, as it is now. I know that a lot of schools it affects
them so dramatically and schools work very hard on trying to keep them
down, working with the students while they\'re in school, out of school
and for someone\--for that to change, it\'s a huge impact on every
school that is out there, from the community colleges, for those that
don\'t even give to loans anymore to these students because they are
afraid of the default rate.

Thank you for inviting me. This is our seeing-eye dog that we have here,
I understand. Thanks a lot.

**MS. McCULLOUGH:** Thank you. Bill Zahn.

**MR. ZAHN:** My name is Bill Zahn. I\'m the Associate Director at the
University of North Carolina at Greensboro. I am really here more as not
representing the university but just as the profession. Some of my
concerns are that as I was going through provisions of the Higher Ed, it
seems that there are a number of things that are coming out, the new
definitions for independent students and the documentation that is going
to go along with that. The schools are going to be responsible for
collecting, although it is self-reported. One of the things, at least in
what I was reading, is that they adopted, to clarify that an orphaned
individual in Foster Care or an emancipated minor can be declared an
independent. Does that mean it is permissive or is it that they will be?
The language is there. Hopefully, that will be brought out.

I hope that when it comes into the negotiated rulemaking that some of
these provisions that have a cost factor associated will be taken into
consideration. There was another one, which I\'m not sure I can find it
now, but basically it was, it prohibits somebody that was convicted of a
sexual crime. Who is going to monitor that and how will that reporting
be done?

Hopefully\--oh, there was one other one. That in the area where there
were prohibitions against\--and it was in the lending section and in the
guarantee section, that allowed for exit counseling, but it was silent
on entrance counseling. Is that prohibited? And yet when you look at
some of the other provisions and language, it included both entrance and
exit. So it just appeared to be that there was sort of a disconnect in
the process. Of course, that may be typical for stuff coming out of
Congress.

That was basically it. Thanks.

**MS. McCULLOUGH:** Thank you. Bill Spiers.

**MR. SPIERS:** Good morning. I\'m Bill Spiers. I am the Director of
Financial Aid at Tallahassee Community College, but today I\'m
representing the Florida Association of Student Financial Aid
Administrators and our some 800 members.

I am going to try to keep my remarks brief because I know there are
others following me. Today, we wanted to talk very briefly about Section
483 and simplification. As a public two-year institution, I feel that I
can implement simplification without any difficulties. My concerns and
our concerns as an association arise from the fact that as we continue
to simplify the free application for Federal student aid, we turn
schools away from using solely the free application to using other
sources that provide additional information and are fee based to
students. So what we have done is we have taken a free process, and we
have added a fee to it unintentionally, but because we continue to
remove the items that are needed by financial aid administrators to do
their job on a day-to-day basis. It would be much better to slow down
simplification. I was part of the initial effort on this. I was part of
the College Board CSS Assembly Council, and we were privy to the initial
discussions on this topic. And my concern was then, and is now, how are
we going to do our day-to-day job and administer our institutional funds
with the elimination of the items that we are talking about at this
point?

Another concern that I have are the estimates that have been bandied
about over the last few months in concern to simplification is that it
would increase the population applying for aid by approximately 40
percent. If that number is true, if that number is even in the relative
ballpark, and we see an increase in applications of 40 percent in
need-based funds, where are the funds coming from to fund these
students? So you have to understand, as we understand, I know that we
are all in agreement that this is not a need-based formula that we are
using but rather a rationing device to distribute limited funds over the
largest population possible. So if we increase it by 40 percent, I do
not see additional funds coming or being funded by the Congress at this
time with other pressing issues that we know of existing. So we have to
ask ourselves that question.

In conjunction with that, Section 484, in model forms, it always
frightens me when we start talking about model forms. If you will think
back, I forget, two reauthorizations ago, we were all dictated to put in
front of Pell, Federal Pell; in front of Stafford, Federal Stafford. The
reason for this because students didn\'t realize they were receiving
Federal funds. I don\'t think students realize anymore today that they
are receiving Federal funds than they did before we put the word
\"Federal\" in front of them. I think that to dictate what we put in our
forms and how the forms are laid out will actually serve to erode what
we can communicate to students because each of our institutions
collectively work diligently to ensure that the message to the student
is clear, that the message is concise and that the message is correct.
So it is very important to us that the student understand what we are
telling them because we realize that our packages are being compared
against other institutions and we want students to see us in the best
light possible too. My third point is from Section 111, reporting
requirements. Again, this frightens us because we don\'t know what
we\'re getting into. What of this information isn\'t already available
either through the various reports we\'re filing or through other
actions that we have to take from our program participation agreement to
other items? What\'s really not available and why are we adding
additional burdens on the schools in order to provide additional
documents? I think this is an unnecessary burden that we need to look
at, possibly even take back as a technical amendment, but those are the
three things that we wanted to highlight today.

I want to remind you that in the last real reauthorization we had, we
were given a great gift. It was called \"Return to Title IV.\" None of
us have figured that out yet, and now we are looking at these additional
items. So the main thing to remember as we move forward is that the
Higher Education Act and the Title IV funds that are available to us are
for students. And everything we can do to keep this process clear for
students, keep it free for students, and encourage students to apply,
they are good things. But let us also remember we are dealing with
limited dollars and that we have to tell the students, if we have
another episode of linear reduction, and it falls on us to convey that
message.

Thank you.

**MS. McCULLOUGH:** Thank you. Kim Jenerette.

**MR. JENERETTE:** My name is Kim Jenerette. I am the Director of
Financial Aid at University of South Carolina Upstate, just up the road
two hours from here in Spartanburg, South Carolina. I serve on the
Legislative Relations Committee for SCASFAA, a nine-state association,
as well as chair the same committee in South Carolina.

It is my first time at a regional hearing. I was a little bit nervous
when I first got here. That nervousness quickly evaporated when I saw
Carney and her smile, her warm demeanor. And as I say that now, Carney
has not always been friendly to us. I\'ve gone to her before and asked
her some certain things when I was at Furman University, and she came
back and told us no. But we still like Carney. She still works with us,
and she still listens to us. So it\'s a pleasure to see you here this
morning.

As Cynthia noted earlier, and Bill\--both Bills\--I am in the Financial
Aid Office as well. So we\'re in the trenches, and I want to get right
down to some things that I believe are important. So what better place
to start than the Financial Aid Office than Section 402, the Academic
Competitiveness Grant. I believe we\'re in the third year of a
5-year-funded program. The last time I heard numbers, we\'re about 50 to
60 percent of appropriations\--50 to 60 percent of the appropriations
were actually spent. That cheer you heard a couple of weeks ago, or
whenever, was not the folks cheering for their favorite football team;
it was those of us in the Financial Aid Office when we heard or read
that ECASLA had changed the basis of tracking progression from an
academic year to just the word \"year.\" That\'s a major fundamental
shift in the Financial Aid Office. I never really knew there were
different definitions between academic year, award year, and year until
we came up with the Academic Competitiveness Grant. My first
recommendation would be when the ACG and SMART abolish the weeks of
instruction. By trying to mirror this with ours and looking at this,
this has greatly reduced the efficiency for us delivering financial aid.
And in some institutions, the last SCASFAA meeting, there were well over
100 schools that had not made one award yet. So it has not only greatly
reduced the efficiency in delivering awards but just awarding in
general.

I am hoping that using grade level may be the somewhat universal
standard that we can use in determining eligibility for the ACG award
for students. With that, we could allow for the inclusiveness of all
hours, collegiately earned hours. That would include AP, IB or dual
enrollment hours. Now, that would be a little tricky, but about two
years ago, we had a combined Carolina conference at the Grovepark Inn in
Nashville, and Anthony Jones, our friend, talked about the assumption
versus the tracking methods.

This would allow us to work with what educators called an individualized
education plan, when dealing with kids in high school, in elementary
school, in middle school, and it allows us to work with students who may
come in with 24 or 30 hours of earned work already. And for those
students who are on an accelerated track, we could possibly view them,
and if an appropriate measure, they could get a SMART Grant later on,
since they may graduate in three years, but for those students who would
still continue to come four years and not be SMART Grant eligible, we
could go with the tracking method and allow them to be more efficient
and receiving the ACG-1 and ACG-2, should they be eligible again. I
would like to mention maybe considering for ACG-2 for students who did
not meet the rigorous high school requirements to be eligible to receive
the ACG-2 by reaching the certain hours, whether it be 24 and 30 as we
have it in the current environment and the necessary 3.0 GPA, if they
have proven academic success or academic strength.

Section 401, the Federal Pell Grants, I agree with my colleagues about
the 18 semester limits and concerns. I would just like to state, through
technical amendments or what have you, allow institutions to continue to
monitor this through satisfactory academic progress. If there are
institutions who are abusing this, we have existing laws on the books,
we have program reviews, we have audits to deal with it accordingly. For
multiple Pell Grants within a single year, I don\'t think there would be
anyone in this room that would be against that. The only thing I would
carefully ask the Department to do, through negotiated rulemaking, is to
allow the regs to be drafted which will allow us, as institutions, to
meet 668.16. And if memory serves me correctly, that is to capably
administer the types of aid we have. Section 412, the TEACH Grant. That
has changed all my presentations. I am now allowed to use the word
\"caveat\" in my presentations because this grant is not gift-based aid.
By the Department\'s own statistics, they have conservatively noted that
80 to 86 percent of students will not meet the service obligations. For
those of you who are in this room and you are not in the Financial Aid
Office, let me say that again. This is called the TEACH Grant. It is a
grant that converts to a loan. We in the Financial Aid Office call it a
\"groan.\" And the Department has come back and said 80 to 86 percent of
students will not meet the service requirements. So if a student
receives a \$16,000 grant undergraduate, which is the aggregate limits
currently for a student and they do not meet the service requirements,
that grant, for those of you not in the office, I want you to
understand, this converts to an approximately \$37,000 unsubsidized
loan. That\'s in addition to the annual and aggregate limits a student
can receive on the Stafford Loan.

So, very simply, while we applaud the Department allowing for the
flexibility to utilize majors at each institution, we just want the name
of this program changed from TEACH Grant to TEACH Loan. That allows, in
gear-up programs that we have everywhere, it allows early awareness for
the students to understand what type of funds they may be receiving and
maybe consider that this loan converts to a grant not after four years
of service but perhaps after two years of service.

Lastly, I want to close by just reviewing Section 151. Section 151 deals
with definitions. And we would like to consider revising the definition
of a \"preferred lender arrangement,\" substitute that to perhaps
\"participating lender arrangement.\" The word \"preferred\" denotes a
school has an active preference for a specified lender, when
recommendation of such a preference to a borrower is otherwise
prohibited by law. The word \"participating\" connotes the appropriate
distance between the school and the lender that schools are required to
maintain.

Thank you both for allowing me to speak.

**MS. McCULLOUGH:** Thank you. Bob Stovall.

**MR. STOVALL:** Hello. Thank you. I\'m Bob Stovall. I\'m from Merit
Network. It\'s a 501(3)(c) organization based in Michigan, and our
community members are the public universities and private colleges and
other higher eds in Michigan.

I\'m here to talk about the peer-to-peer copyrighting infringement
provisions that are in this act. The concern we have here, and I think
some other folks have talked about this, is that we are worried that
it\'s going to be a one-size-fits all approach, and that is going to be
not manageable on the technology side. And our concern is this, is that
it\'s really focused against the larger universities, and the smaller
colleges and junior colleges that have small dormitories or don\'t have
dormitories at all, they\'re going to have to abide by the same rules,
and we don\'t think that\'s going to be manageable or affordable for
them. There is another concern here, too; that they are talking about
the peer-to-peer applications and file sharing. There\'s a whole
plethora of legitimate use for those applications in research and
content management within campuses and external to campuses to the
remote campuses and to the online students, and we don\'t want to damage
that ability for the content to be provided. We don\'t want to prevent
our institutions from meeting their mission, which is to educate our
students in our community. So we\'ve got to create the rules. And as one
of our colleagues has mentioned, and bring in organizations like
EDUCAUSE in part of the rulemaking, to make sure it is measured and the
whole community is represented, that we\'re just not trying to say,
well, the large universities can do this, the research universities can
do that\--so everyone can do that. No, we\'ve got to have measured,
leveled rules for each part of our community. It\'s really, really
important. Because as we move forward, we need to use our technology to
educate our communities and to use the technology to get the word out
and not prevent it. Some of these rules could be made that would prevent
us from being able to use the right technology for the right
applications. So I would like to thank you for the opportunity to speak
on this. I really recommend or just strongly recommend that
considerations of the smaller campuses are taken when you create these
rules.

Thank you.

**MS. McCULLOUGH:** Thank you very much. Jim Kessler.

**MR. KESSLER:** Good morning. I don\'t know if anyone has formally
welcomed you to North Carolina. So welcome. We have this weather that we
have to put up with all the time, including today.

My name is Jim Kessler. I\'m the Director of Disability Services at the
University of North Carolina. I am here representing the Association on
Higher Education and Disabilities, of which I have been fortunate enough
to be a past President. I want to thank you for allowing us the
opportunity to speak to you today. And, first, let me say that AHEAD
fully supports the Higher Education Opportunity Act reauthorization,
which we believe supports the efforts of institutions of higher
education and our core constituency to improve transition, support and
instructional services, service and instructions for all students with
disabilities. While 77 percent of students with disabilities hope to go
to college, only 31 percent are able to attend. We are hopeful that
these new regulations will increase the opportunities for all students
with disabilities and thereby make higher education a reality for all.
AHEAD is a professional organization of individuals involved in the
development of policy and the provisions of quality services to meet the
needs of persons with disabilities involved in all areas of higher
education\--undergraduate, graduate, professional two-year and four-year
schools all over. We have about 2,500 members throughout the United
States and in other countries. We are fortunate to have a formal
membership with 30 affiliates around the country and numerous other
professional organizations working to advance equality in higher
education for persons with disabilities.

AHEAD dynamically addresses current and emerging issues with respect to
disability, education, accessibility for persons with disabilities and
trying to be able to achieve universal access. As such, we are actively
involved in all facets of promoting full and equal participation by
individuals with disabilities in higher education and supporting the
systems, institutions, professions and professionals to attend to the
fulfillment of this obligation. There are five points we would like to
address this morning.

Under Title II, Part B, Section 3, Subpart 3, Section 251, Preparing
General Education Teachers to More Effectively Educate Students with
Disabilities. AHEAD supports a structured, multi-sensory approach as
outlined by the National Reading Panel, which highlights five pillars of
literacy that are critical to the essentials of reading skills. As part
of this, AHEAD supports the use of research-based methodologies in
determining the best approach to instructions in reading and
mathematics. The education of teachers takes place within higher
education. Our approach toward disabilities and accommodations form the
foundation for the expertise of the future teachers and the employers it
prepares.

The necessity for students in K-12 to be able to learn the skills to
learn is critical for the transition to higher education. Because of the
influence of the climate and the importance of modeling the best
practices, AHEAD supports the model demonstration projects of Title VII
to provide technical assistance and professional development for
faculty, staff and administrations in institutions of higher education
in order to provide students with disabilities quality education at all
levels. We also encourage the investigation of models, whereby
teachers\' preparation programs can more effectively model and assist in
accelerated training of those teachers recruited from model national
programs such as Teachers of America. Point two, under Title VII, an
advisory commission on accessible instructional materials and
postsecondary education for students with disabilities. This also is a
concern for the other gentleman who spoke about copyrights. AHEAD fully
supports all efforts to make instructional materials in a timely and
useable format for all students with disabilities. This is particularly
important for those students with print disabilities, as was outlined in
the Wall Street Journal article on September 17th of this year, which
chronicled the increasing number of students with learning disabilities
entering postsecondary education and their needs for varying levels of
alternatives to print. AHEAD and its members have been important leaders
in the creation and the development of expansion of services to fill the
void of alternative print, such as Book Share, and to encourage RFB&D,
Recordings for the Blind and Dyslexic, efforts to provide materials in a
digital format.

AHEAD member institutions have an obligation to ensure nondiscrimination
of all persons with disabilities in accordance with the language of the
Americans with Disabilities Act and its amendments and the
Rehabilitation Act of 1973. We feel that the current definition, as
listed in the Higher Education Textbook Access Act of 2007, referring to
print disability, would exclude or not sufficiently encompass people
with disabilities who would participate in or benefit from the use of
books in an electronic format. The definition needs to be revised to not
be based on the outdated National Library Service standard definition,
but on the definition that reflects today\'s scientific realities. As
our campuses are beginning to deal with issues confronting returning
service men and women with disabilities, we need to broaden our ability
to understand and address the disability-related impacts to reading and
other academic tasks are essential.

AHEAD believes that an advisory committee will be able to examine a
broad spectrum of materials and needs to encourage the common approach
to flexibility and formats that will allow students to move between and
within our educational systems. We look forward to participating and
consulting and assisting in these efforts.

Point three, an e-text clearinghouse. Under Title VII, a model
demonstration program to support improved access to postsecondary and
instructional materials for students with print disabilities. Through
our e-text initiative, a collaborative project involving numerous
student organizations and institutions they serve, publishers, AHEAD has
developed an understanding of stakeholders\' positions and current
capacities. AHEAD supports the idea of a national clearinghouse for
accessible text, seeing it as a necessary and efficient first step to a
seamless provision of accessible digital technology directly for
students with print impairments. We support the goal and the intentions
of this legislation to improve timely and useful access to printed
instructional materials for people with disabilities. We absolutely
realize that while the current section is not the final answer to the
issues of text accessibility, it clearly provides for a critical first
step in attacking a significant area. Point four, data collection under
Title IX. Colleges will be asked to report the \"percentage of
undergraduates enrolled in the institution who are formally registered
with the Office of Disability Services of the institution or the
equivalent office for students with disabilities.\"

The collection of data on students with disabilities has been
inconsistent over time and across institutions. The lack of consistent
data has hindered the evaluation of our progress toward inclusion, our
identification of best practices and our ability to predict future
resource needs. AHEAD sees the simple headcount of students with
disabilities seeking services or accommodations as an opportunity to
develop an infrastructure for the collection of more meaningful data and
the development of reliable models for service delivery and resource
planning. We are pleased to see the addition of this provision because
students with disabilities, like all of the minority populations on
campus, deserve to be included and counted.

Currently, there is no defined system or methodology in place to count
college students with disabilities, and determining how this task is
accomplished is critical. Some questions that need to be considered when
looking at this provision are, are we going to count students with
disabilities like we do other minorities or only those students who
request accommodations? If so, how do we ensure that we include students
with disabilities who do not register with our offices? We need to
ensure that students who receive financial assistance through the
various agencies, such as vocational rehabilitation and other services
with disability services are not counted more than once. Considering
that not every disability fits nicely into every category, we will be
asked for a\--we will work on a tracking methodology. In the end, what
will be the purpose of the data for the individual institutions as well
as the government? We are pleased to see the addition of these
provisions because students with disabilities, like all other minority
populations on campuses, deserve to be included and counted. However, as
indicated above, AHEAD feels that further clarification is necessary in
order for the data collection to be efficient and meaningful. AHEAD
would be happy to participate and consult in this discussion.

Thank you, again, for the opportunity to speak and listen to the views
of the Association of Higher Education and Disabilities. And thank you,
Johnson C. Smith, for taking the leadership and hosting us this morning.

**MS. McCULLOUGH:** Thank you. Meghan Trowlbridge.

**MS. TROWLBRIDGE:** Good morning. My name is Meghan Trowlbridge, and I
am speaking today on behalf of the Center for Disability Resources at
the University of South Carolina. The Center for Disability Resources,
or CDR, is one of 61 university centers for excellence in developmental
disabilities education, research and service, located in major
universities throughout the United States. We function as a bridge to
connect the knowledge, expertise and resources of the university to
persons with disabilities and the service delivery systems in the
community. Our mission is to enhance the well-being and quality of life
for persons with disabilities and their families. We collaborate with
persons with disabilities and their families to develop new knowledge
and best practices, train leaders and effect systems change.

I\'m here today to provide recommendations on the development of
regulations regarding financial aid for students with intellectual
disabilities. We are delighted that Congress included provisions in the
law that will make it possible for students with intellectual
disabilities, mental retardation and other significant cognitive
disabilities who are enrolled in comprehensive transition and
postsecondary education programs to access financial aid. Research shows
that students who have the opportunities to participate in postsecondary
education are more likely to become employed and to live more
independently than students who do not have these opportunities. We
found that students who are more self-determined were more independent
overall, and they were more likely to be working for pay at higher
hourly wages. These postsecondary actions for students will positively
impact the overall quality of life. However, affordability is a real
issue. The new provisions in the law that allows students with
intellectual disabilities enrolled in programs designed for them to be
eligible for work study programs, Pell Grants and Supplemental Education
Opportunity Grants will be a real help to these students and their
families.

The CDR is pleased to partner with the College Transition Connection and
the National Down Syndrome Society, supporting an innovative initiative
in South Carolina. This collaboration works to provide grant monies for
postsecondary education programs at colleges and universities in South
Carolina. The grant covers a planning year, start-up costs and
personnel. Students or their families are responsible for tuition and
fees. Partnerships with the Developmental Disabilities Council,
Vocational Rehabilitation and the Department of Disabilities and Special
Needs are being cultivated to enhance these opportunities and provide
support for the students. Currently, there are grants being administered
to three South Carolina universities: the University of South Carolina
began the Carolina LIFE, which stands for Learning Is For Everyone,
Program in August 2008 with the admission of three students. Clemson
University is halfway through their planning year, and they will admit
students in the spring of 2009. Coastal Carolina University has been
awarded a planning grant, and students will start classes there in the
fall of 2009 semester.

These programs will provide students with opportunities to participate
in regular classes, with support, to be involved in extracurricular
activities on campus and to experience inclusion on a college campus.
Each LIFE program is different based on the specific culture and
opportunities offered at the universities. Some specially designed or
program-specific classes are offered, as well inclusive classes with
\"typical\" students. The goal of the LIFE programs is to prepare
students for employment and independent living upon graduation. Our
first recommendation is that the negotiated rulemaking team includes at
least one expert in this area to ensure that the regulations properly
reflect congressional intent. We also recommend that the following
principles and suggestions be used in developing the regulations.

Number one, ensure that the process be as simple as possible for
families and institutions of higher education to navigate.

Number two, ensure that the financial aid process is as easy as possible
for families to understand and use and is closely linked to the process
that other students use.

Number three, ensure that institutions of higher education do not have
to jump through multiple hoops to provide assurances that they offer a
program.

Number four, in providing clarification on the definition of a student
with an intellectual disability, include language in the conference
report that makes it clear that a student with an intellectual
disability who attends or has attended private school or is home
schooled is eligible.

Number five, make it clear that a student who receives financial support
from a school district or other government agency is still eligible to
be considered for work study jobs and tuition that they pay, if any.

Thank you for this opportunity to address you today. We would be very
pleased to provide any follow-up information and my contact information
is in the written statement.

**MS. McCULLOUGH:** Thank you very much.

Let\'s take a 15-minute break. When we return, it will be Jeff Arthur,
from ECPI College of Technology. So we will reconvene at 10:30.

**\[Brief recess.\]**

**MS. McCULLOUGH:** We will now reconvene the hearing. Our next speaker
is Jeff Arthur from ECPI College of Technology. Before we get started,
let me remind you that if you have not signed up for a time slot, we
have plenty of times left available. Just sign in with Patty and Nicky
in the front, and we\'d love to hear from you.

**MR. ARTHUR:** First of all, I\'d like to thank the Secretary for
giving us the opportunity to participate in these hearings. I was a
negotiator at the loan issues neg-reg last year and understand the value
and the impact that this process can have. So I applaud this process,
and I\'m glad to see so many people participating.

I am the Vice President of Information Systems and Financial Aid at ECPI
College of Technology and here representing the Career College
Association. ECPI has 12,000 students and 18 campuses. I do have a staff
of six people that have over 20 years in financial at ECPI. So I know we
still struggle with this. I don\'t know how everybody deals with a lot
of the complexities, but we\'ll get through it, won\'t we.

The first issue I would like to address is the year-round Pell issue. I
am very grateful for this provision. With most of our students attending
one and two-thirds academic years each calendar year, we always struggle
to deal with students that want to accelerate their education and with a
system that has disincentives to do so right now. So this is a good step
to try to remedy some of that. Because of our crossover payment periods,
our students can have these periods actually occur over 16 months. You
can have an award year with payment periods that cover a 16-month span.
So I do ask that the Secretary give maximum flexibility and
consideration of these issues when we award these students in dealing
with this issue. In regards to the 90-10 issue. With the application of
non-Title IV programs being counted as revenue now, I would remind the
Secretary or, hopefully, understand that many of our institutions, our
states and our accreditors approve institutions on an institutional
basis not on a program basis. So where I have programs, a lot of
Microsoft certification programs and phlebotomy courses and things like
this that it appears the intent is to allow us to include those in the
revenue, those programs may not specifically be approved by the state or
accreditor other than they are automatically approved in our scope of
our accreditation to give deference for that and not require us to go to
those agencies to \"Can you approve this program and all these several
programs.\"

With regards to the application of the additional \$2,000 that was
granted to us in July, while it seems logical that when you apply the
use of that \$2,000 in the 90-10 rule, that that would be applied
proportional that all loans that a student gets, even if there is a
refund calculation or other issues like that, to allow the use of that
\$2,000 as a non-Title IV aid proportional to all of their student
loans. The next issue I would like to address is the cohort default
rate. I learned with the last speaker that CDR has another meaning, too,
but I know it has a definite meaning to us. We are going to have an
interesting time when these CDRs are transitioned to three-year rates
from two years. It seems that there will be a couple of years there
where there will be both a two-year and a three-year rate published for
core default rates. It will be important to allow appeal challenges to
both rates under the rules that apply to each of those rates. It is
currently a two-year appeals and provisions allowed to challenge and
penalties incurred with a two-year rate that we would want to see that
retained for the two-year and that the new rules that are related to the
three-year apply to the three-year rate and keep those kind of straight
there. In regard to the preferred lender lists and opportunity pools,
please understand and consider, as regs are updated and written
regarding loan programs provided by lenders to our students, that we are
struggling, on a weekly basis, to find any lender that will provide a
reasonable program for our students. It would work against the interests
of students if we were to be required to put a program in front of
students that is not in their best interests. Right now I only have two
private loan programs that I consider reasonable for our students. It
could easily become one in these times or possibly none, but hopefully
we\'ll retain at least one. But I would hate to have to go through any
hoops or things to try to put a program in front of students that does
not make sense at all.

An additional issue, we are going to be required to disclose retention
rates, it seems. Being a year-round school, with a very
restrictive­-there\'s really restrictive leave of absence requirements
right now. In light of that, some of our students create their own
summer term, which they may actually take any time of the year, but
because we are year round, I would ask that when we calculate retention
rates that we give consideration to students that return within a
reasonable time to their program and not have to count those as dropped.
So when you look at retention rates, you really do need to leave a
window from the time you close off the end of the cohort period to the
time that you calculate the rate and allow students a reasonable time to
return.

I also understand that there\'s some issues regarding distance
education, verifying that students that are taking courses online are
actually who they say they are. I could definitely see on the surface
how it seems that it\'s a reasonable question, how do you know the
person on the other end of that on-line course is really how they say
they are? But in reality, going to college is a lot of work, and I
don\'t see that you would find people prepared to attend college for
someone else\'s benefit. So I would say keep the administrative burden
low on this. Keep the impact of this in perspective. I really\--we have
struggled with this issue many times. I\'m sure we\'d be concerned, but
when they go through the financial aid application process, you
definitely know who is getting the financial aid. That we ensure. So the
question is do they actually have somebody that might be taking a course
on their behalf. Well, it\'s a lot of work, and I would suggest it\'s
probably not the issue that it may seem to be on the surface, so keep
the burden low. And then my last comment, regarding the copyright
infringement. I want to echo something that Jack Henderson said earlier,
but expand on that a little bit. Our institution, bandwidth is precious.
We do not have bandwidth available for entertainment purposes. Our IT
people have phones that go off when there\'s unusual bandwidth activity.
And so it would be important to us to keep the administrative burden low
in an institution like ours, where this is absolutely no issue. It is
something that we have under control. And if we can minimize the impact
on us administratively, it would be appreciated in consideration of
those institutions that are in that scenario.

Thank you.

**MS. McCULLOUGH:** Thank you. David Harrison.

**MR. HARRISON:** Good morning.

**MS. McCULLOUGH:** Good morning.

**MR. HARRISON:** I\'m David Harrison. I\'m the Associate Vice President
for Legal Affairs at the University of North Carolina, General
Administration. My business card is this big. You can\'t have a public
hearing without a lawyer or two, so I am here.

You have heard from some of my colleagues from our campuses. General
Administration is the common enemy around which they unite. We are going
to be submitting to the Secretary a written statement, a formal
statement, but I thought I\'d take some time, a little bit less formal,
to talk about peer-to-peer and how important that is to us. A couple
years ago, I published a journal article for Notre Dame Law School and
the title was, \"The File-Sharing Wars: It Feels Like Belgium Over
Here.\" And that\'s what higher education is. We have this war that we
didn\'t ask for. We\'ve got the content community and we\'ve got file
sharers who shouldn\'t be doing it, and we do the best we can to stop
it. I think we haven\'t told our story very well. The story that we
should have been telling is that we are the group that educates students
about not infringing. We do everything we can technologically to stop
the infringement, and we\'ve done a good job of it. We\'ve done a good
job of it for many years. When this went to Congress, and we had I guess
the prospect of having very strict, narrow rules, we were very
concerned. We were scared. We\'ve seen this before. You start with the
player piano, you go through the phonograph, you go through cassette
tapes, you go through MP3 players, and we\'ve all seen the same
thing\--streams of piracy. We were worried that we were going to get
nailed with some really strict technological measures and some difficult
administrative measures in order for us to keep going on and stopping
the infringement and educating our students. When it came back from
Congress, and it was very sort of broad language, I think very
understanding language, we were encouraged. We were delighted that
Congress looked at all the things that we were doing already. We don\'t
certify to the Secretary about what we\'re doing, but you can look at 17
different plans at my university.

Last week we had a meeting of the university attorneys, and I asked all
these different campuses, you know, we go from 3,000 students at a
liberal art community at Asheville to Chapel Hill and State, which are
R-1 institutions, and said, \"Is there a common approach that we could
take for this problem?\" And they said, \"No, there is no common
approach.\" We have an overarching copyright policy which applies to
everyone, all 200,000-plus students, all of our staff, all of our
faculty. But what each campus does with infringement is totally
different. At East Carolina, they will go to the student and take the
peer-to-peer program off their computer. At Chapel Hill, they\'ll send
them up into discipline. They have to sign a contract, cut them off from
their laptops. They\'ll have to go do their work at the computer labs.
Western Carolina has expelled some students for file sharing. There just
is not one size fits all, as one of our colleagues said earlier.

So what we would ask is that the Secretary balance the concerns in the
same way that Congress and the courts have balanced, whether it was the
beta max player, when the courts talked about substantial
non-infringement, or it was compulsory licenses when it comes to music.
All those things are potential piracy, the balance was made. And so what
we want is a dedicated committee for the peer to-peer and an assumption
that we are doing the right thing and that the Department will help us
continue doing the right thing.

The law is never going to catch up to technology, but we are delighted
to have this type of rulemaking, and we would be delighted to
participate in any way.

Thank you.

**MS. McCULLOUGH.** Thank you very much. Marlene Hall.

**MS. HALL:** Thank you very much. I am very glad to be here, and I will
tell you, quite frankly, this is the first time I have ever spoken at
one of these regional hearings. So please forgive me if I slip up a
little bit.

I originally came in to simply watch the hearing for UNC Charlotte, and
particularly for the Police and Public Safety Department. But I found
that several of my colleagues are quite interested and as members, we
are all members of IACLEA, the International Association of Campus Law
Enforcement Administrators, we also are members of the Southeastern
Chapter too. We found that we have a lot in common in terms of avid
interest in what the public safety and emergency management provisions
are in the proposals being made. I do want to thank you for the
opportunity for us to be able to say some of these things. I\'d like to
just quickly recognize the fact that we have Winthrop, Johnson C. Smith,
Duke, and Johnson & Wales also with us here.

One of the things that we were asking that might be considered is the
fact that we could take some of these public safety and emergency
management provisions and look at them to clarify some of the
definitions and parameters that are stated in the regulations, and I
will get into that in just a moment. Those would be the provisions
contained within the Title IV, Part G, Section 488 of HEOA. And then we
also would like to ask that serious consideration be given to forming a
separate negotiating committee so that we could go through some of these
critical, yet very complex, issues that are affecting our campus
communities. One of the examples would be with disclosure of the fire
safety standards and measures. We need a little more clarification, if
possible, on the fire safety report. For instance, several times student
housing is referred to. But every once in a while there will be larger
parameters in there. And so when we are talking about drills, policies,
future improvements, is there an interest just in student housing for
the report or do we need to look further, you know, more expansively on
the campus? The other thing is that with certain types of incidents and
students being students, we have all sorts of interesting incidents that
occur sometimes, but if there is, for instance, a piece of paper that is
taped to a student\'s door and someone catches fire to it, is that
considered property damage? If there is a free newspaper, which
oftentimes they are there for the picking, is that considered property
damage? If so, what is the base value that we need to put on there for
the reporting on that?

One other thing that we notice is that it talks about being sure to
report injuries that require medical treatment. Every once in a while,
you\'ll have someone who refuses medical treatment. So do we need to go
ahead and include those in the reports, too, for the spirit of the law?

Another area is on the criminal offenses that need to be reported, the
four new reporting crime categories\--larceny, simple assault, vandalism
and intimidation\--under the Cleary Act, in the section for the hate
crimes. Overall, I think most of my colleagues and I would say that\'s
pretty easy to add to the record keeping that we are already doing. What
we would ask is that let\'s not forget that we already have some
established guidelines under the old Cleary regarding criteria and
deadlines. And if we could look toward those to help us regulate the new
hate crime categories, that would be very helpful. One other thing that
was mentioned, too, was the term \"intimidation.\" It needs a clear
definition because it\'s not listed in the Uniform Crime Reporting
Standards for other events that are recorded. So we could really use the
help on that. One other area is on emergency notification. Of course,
the terms that are involved in that, we need to carefully look at those
and how they are defined. Just using some of the events of the past 2
years as examples, notification of an incident needs a clear definition
for the reporting of an event, after confirmation of that event, and an
allowance for professional evaluation of that event prior to a campus
wide alert. For example, there may be some sort of protocol that we need
to take a look at, not just for when there is a crime, but let\'s say if
a student has a health hazard, such as meningitis or tuberculosis, that
would obviously cause some concern.

Looking at some earlier attempts to define some issues in the Cleary
Act, a term as simple as \"calendar\" needs to get a little more
attention, if you could. Seeking some clarity was a little bit-­well, it
was far from easy. The definition of the terms are essential to useful
compliance and, more importantly, the exercise of notification
procedures to protect those on campus. Events off campus tend to spread,
and it\'s oftentimes a case-by-case judgment. It makes it a little bit
difficult. We would be very glad to invite a little more definition in
that too. All cases we have got to use professional judgment of first
responders, emergency managers and other campus health and safety
personnel. They all must be balanced with the notification requirement
to ensure that emergency situations are communicated to those on campus
in ways that are timely, accurate and useful, and I would like to
probably emphasize the word \"useful.\" Another area was missing person
procedures. This law requires the creation of a plan for dealing with
reports of students missing for more than 24 hours. This could be an
effective idea for any campus that does not have a protocol for missing
persons, but regulations must ensure that the balance of student privacy
and contact provisions are smoothly intertwined. I notice that
oftentimes there was reference to students being 18 years of age and
looking at parent notifications, and we appreciate that. We just want to
make sure that we keep in mind that most students are legally adults and
that campuses usually have little or no legal function in local
parentis. MOUs, or Memoranda of Understanding, was another area with
local law enforcement. We think that MOUs should be encouraged, but we
want to also make sure that it is understood that that is usually by
mutual consent between the two or more agencies, and it\'s not a
situation that is imposed by one agency over another agency.

The last thing is on emergency response and evacuation procedures. As
institutions, we have to provide the campus community with a statement
of policies and procedures, we understand, that are related to the
emergency response and evacuation; in essence, requiring the
establishment of an emergency operations/management plan. This can be a
very complex issue for negotiated rulemaking. Many different missions,
resources, programs, structures, and makeup of the country\'s colleges
and universities, and I think what we just heard just in the region or
the state itself and UNC can be challenging. If even a summary
discussion could be done, that would be really helpful. We are keenly
aware of the need to plan for emergencies, and we look forward to
helping craft guidance, if possible, on how best to help institutions
develop and plan for this. When we were talking about possibly forming a
separate committee, we would also very much appreciate serious
consideration of including some of the members of the association from
IACLEA on that. My understanding\--again, this is my first time\--that
one can nominate persons to be on there, and I would like to nominate
someone from IACLEA being on there. Our IACLEA President sent in a
letter just recently referring to the Director over Government
Relations, and I am sure that probably the President, Lisa Sprague, or
the Chair of the Government Relations, Mike Webster, would be very glad
to work with DOE on that.

Thank you very much.

**MS. McCULLOUGH:** Thank you. Debbie Kingsberry. No. All right. Dr.
Andrea Williams. Antonio Stephens is going first.

**MR. STEPHENS:** Good morning. My name is Antonio Stephens. I am the
Director of the Educational Talent Search and Upward Bound Program at
Saint Augustine College, also the President representing the North
Carolina Federal TRIO Programs and North Carolina Council for the
Educational Opportunity Programs, better known as NCCEOP. I am here
today to talk about the U.S. Department of Education\'s proposed changes
for the Federal TRIO Programs, with the reauthorization of the HEOA. We
recommend the following changes in reference to Talent Search, Student
Support Services and the annual performance reports of Talent Search to
reduce the minimum number of participants from 600 to a lower number so
that Talent Search projects can provide a more targeted service or more
targeted services to its students and to increase the cost per student
allotted for Educational Talent Search.

Student Support Services do not delay the SSS competition more than one
year from its originally scheduled Fall 2008 time frame, in reference to
the annual performance reports or APRs to revise and distribute APRs to
the TRIO community as soon as possible. I would like to go into depth a
little bit more. In reference to Talent Search, HEOA includes several
changes to the Talent Search Program. Specifically, the legislation
modified the purpose of the program to include college completion,
expanded prior experience to examine whether students pursued rigorous
programs of study in high school, receive their high school diplomas on
time and whether students are enrolled in and graduated from
postsecondary educational programs. It created a required services
section, specifying that projects must provide students with
high-quality academic tutorial services, proper guidance in secondary
and postsecondary course selection, assistance in completing college
entrance exams and admission and financial aid applications. In order to
achieve these goals, Talent Search projects will need to increase the
intensity and, quite likely, the number of counseling sessions for each
participant. Therefore, we urge the Department of Education to reduce
the minimum number of participants from 600 to a lower number. This will
allow the Talent Search projects to provide more targeted services.
Additionally, we encourage the Department to increase the cost per
student allotted for Talent Search participants in order to assist
projects in meeting these objectives.

In comparison to reducing the number, we can compare this to smaller
class sizes within secondary schools. Studies over the last 20 years
have provided researchers and educators with the opportunity to observe
reduced class size classrooms and gather data on student achievement.
Class size reduction has been deemed successful and students show marked
improvement in learning. This is from the Clearinghouse of Educational
Policy and Management. And also in recent years reducing class size has
gained increased prominence as a school improvement strategy. Now, some
40 states now have class size reduction initiatives in place and Federal
money available for such efforts. Such goals led the Federal Government
in 2000, in the year 2000, to create the highly touted Federal Class
Size Reduction Program, which gave states funding to recruit, hire and
train new teachers. Clearly, the size reduction will allow more time per
student. The Department has also noted that it required better funding
with reduced sizes. And according to the American Educational Research
Association, smaller class sizes can produce lasting gains particularly
for minority and low-income students. So we advocate for a reduction in
the size of a new program, a new Talent Search Program, from 600 to a
lower number.

The Student Support Services Program, it is our understanding that the
Department is considering a plan to delay the next competition for the
Student Support Services funding for three to four years so as to bring
all four-year grantees into sync with those that have extra years due to
high scores in previous competitions. Now, typically, the next
competition will take place this fall. While HEOA grants the Department
the authority to provide a one-time limited extension of the length of a
TRIO Grant in order to synchronize the awarding of grants, it also
mandates that it must do so under terms that are consistent with the
purposes of the TRIO part of HEOA. This is Section 403(a), Part 1,
Subpart B. Now, one of the many purposes outlined in that legislation
was the intent of Congress to extend opportunities to participate in
TRIO Programs to students enrolled in branch campuses. And this is from
Section 403(a), Part 7, Subpart B. Therefore, we discourage the
Department of Education from delaying the SSS competition or any other
TRIO Grant competition for more than one year. To do otherwise, would
limit opportunities for students at institutions that for the first time
will be eligible to host SSS projects on their campuses. Indeed, a
significant delay of any TRIO competitions would prove to be unfair to
needy and deserving students that desperately need the vital and
life-changing services offered by TRIO Programs.

And, finally, the annual performance reports. For the first time,
Congress defined prior experience by describing outcome criteria for all
TRIO Programs. In addition, Congress included new required services
provisions and amended previously existing permissible services
provisions. In order to effectuate these changes and to allow current
TRIO projects to complete these reports in a timely manner, we encourage
the Department to update these materials and disperse them to the TRIO
community as soon as possible.

Thank you very much.

**MS. McCULLOUGH:** Thank you very much. Debbie Kingsbury. Andrea
Williams.

**DR. WILLIAMS:** Good morning. I would like to take this opportunity to
echo the position of our President, Antonio Stephens. I am Director of
Student Support Services and the Educational Opportunity Program at
College of the Albemarle. It is two programs, two TRIO Programs.

These programs have been around for a long time, and we do appreciate
the support that has been rendered. And the positions that Mr. Stephens
shared with you this morning, we looked at the concerns with the new
grants and whatnot, the time frame is very critical.

As a member of an institution of community colleges, the only thing that
I would like to echo is that in terms of if you are crafting any other
legislation or anything like that, the community college system uses a
database program, Datatel, and we are very interested in extending our
opportunities, our TRIO Programs, particularly within the community
college system. But many of our colleges do not collect information
pertaining to low income, first generation and individuals with
disabilities on a routine basis. So we are ill-equipped in many aspects
of being able to compete for these vital resources for the TRIO
programs. Here in North Carolina, we are represented very well with the
number of TRIO Programs that we do have, but the concern that we have is
the ability of the community college system because there is not a
routine, regular reporting basis or collection method for us to be
competitive in identifying that type of information.

So in terms of if there are any opportunities to allow community college
people in the mechanisms of crafting information for you all or being
represented, we would like to do so.

Thank you very much.

**MS. McCULLOUGH**: Thank you. Guin White.

**MS. WHITE:** Good morning. My name is Guin White. I am the Director of
an agency in Greensboro, North Carolina, that is a community-based,
first-in-the-state TRIO Program. Mr. Stephens has already given you the
information that we brought here regarding the Talent Search Program. So
at this time, I just wanted to add that the research came directly from
the Department of Ed in regard to class size, and that\'s what we are
pushing for.

Right now, that is all I needed to say.

**MS. McCULLOUGH:** Thank you very much.

**MS. WHITE:** Thank you.

**MS. McCULLOUGH:** That is all of the people that have signed up to
testify at this point in time. So, with that said, we will reconvene at
1 o\'clock.

**\[Whereupon, the morning session was adjourned.\]**

**AFTERNOON SESSION**

**MS. McCULLOUGH:** Good afternoon. It is now 1:05. I am calling the
hearing to order. However, we have no one signed up to testify at this
point or to provide comment, so we will adjourn until someone signs up.

**\[Recess.\]**

**MS. McCULLOUGH:** It is 1:30, and we will reconvene the hearing.
First, Sharon Oliver.

**MS. OLIVER:** Good afternoon. I am Sharon Oliver, Director of
Financial Aid at North Carolina Central University. Thank you for the
opportunity to briefly share the impact of Section 436, changes in the
cohort default rate calculation.

Is this the right time for a change in the calculation of the cohort
default rate? Today we have the highest unemployment rate. Today we have
the highest gas prices. Today we have the highest number of banks and
lenders closing. Today we have the highest foreclosures on mortgages and
most recently the highest Federal bailout. The economy is indeed in
transition. Based on the current status of our economy, it is
anticipated that the default rates will rise. As you well know, the
national average for the default rate increased on this year. The change
in the calculation of the cohort default rate will have a significant
impact on Historically Black Colleges and Universities. It has been
noted that the default rate will likely increase by 25 to 50 percent
with this new change. I respectfully ask the Department of Education to
consider eliminating CDR as a critical measurement for institutional
success. Instead, I offer that the holders of loans should be held
accountable for repayment activities. Schools should be responsible for
exercising due diligence by providing loan entrance and loan exit
counseling interviews and sharing repayment options.

Again, I ask is this the right time for a major change in the
calculation of the CDR during an unstable economy?

Thank you.

**MS. McCULLOUGH:** Next, we have Melody Lawrence.

**MS. LAWRENCE:** Good afternoon. My name is Melody Lawrence, and I am
the Financial Aid Director at Southwestern Community College, about four
hours west of here. This is the first hearing of this type that I have
attended, and I really did not come prepared to speak. But given the
friendly audience, I just wanted to share a concern I have about the
Academic Competitiveness Grant, since it is being continued under this
current legislation.

Really, I have two major concerns. One is the substantial burden that
this program places on financial aid administrators in trying to make
sure that we are getting the money to all the right students who are
eligible and that the students are indeed eligible under all the
different criteria and just, anecdotally, have observed over the last
couple of years in my office the amount of time that it takes to give
out 20-some thousand dollars seems to me to be totally out of
proportion, and I hope that\'s not what was intended initially.

My second concern about the program has to do with who is actually
receiving it. I have to question, when I see that the dramatic falloff
in the number of students who are receiving second-year grants versus
first-year grants, that there may be something wrong here in the way the
program is designed or defined. And, secondly, when I have students who
have past the rigorous course assessments or met that criteria by
passing the rigorous programs in their high school and they come into my
community college and are signed up for all remedial courses, and they
are being given a grant called Academic Competitiveness Grant, I have to
question, again, whether the original intent of the grant is actually
being met. And basically just asking that the Department consider doing
some sort of immediate assessment on the effectiveness of the program.
Because, personally, I would rather see those funds that have been
allocated to that program be made available to another program that is
going to meet the students\' needs better.

Thank you.

**MS. McCULLOUGH:** Thank you very much. Do we have anyone else signed
up to testify at this point?

There is no one ready to testify at this point, so we will adjourn until
someone else signs up to testify.

**\[Recess.\]**

**MS. McCULLOUGH:** It is now 4 o\'clock and the hearing is now closed.
Thank you very much.

**\[Whereupon, at 4 p.m., the public hearing was adjourned.\]**