U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

85–672 PDF 2015

KEEPING COLLEGE WITHIN REACH: 

STRENGTHENING PELL GRANTS 

FOR FUTURE GENERATIONS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HIGHER EDUCATION 

AND WORKFORCE TRAINING 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, DECEMBER 3, 2013 

Serial No. 113–40 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 

CEWDOCROOM with DISTILLER

(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Thomas E. Petri, Wisconsin 

Howard P. ‘‘Buck’’ McKeon, California 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Tom Price, Georgia 

Kenny Marchant, Texas 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Scott DesJarlais, Tennessee 

Todd Rokita, Indiana 

Larry Bucshon, Indiana 

Trey Gowdy, South Carolina 

Lou Barletta, Pennsylvania 

Martha Roby, Alabama 

Joseph J. Heck, Nevada 

Susan W. Brooks, Indiana 

Richard Hudson, North Carolina 

Luke Messer, Indiana 

George Miller, California, 

Senior Democratic Member 

Robert E. Andrews, New Jersey 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Rube ́n Hinojosa, Texas 

Carolyn McCarthy, New York 

John F. Tierney, Massachusetts 

Rush Holt, New Jersey 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Timothy H. Bishop, New York 

David Loebsack, Iowa 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Pocan, Wisconsin 

Juliane Sullivan, Staff Director 

Jody Calemine, Minority Staff Director 

SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE TRAINING 

VIRGINIA FOXX, North Carolina, Chairwoman 

Thomas E. Petri, Wisconsin 

Howard P. ‘‘Buck’’ McKeon, California 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Susan W. Brooks, Indiana 

Richard Hudson, North Carolina 

Luke Messer, Indiana 

Rube ́n Hinojosa, Texas, 

Ranking Minority Member 

John F. Tierney, Massachusetts 

Timothy H. Bishop, New York 

Suzanne Bonamici, Oregon 

Carolyn McCarthy, New York 

Rush Holt, New Jersey 

Susan A. Davis, California 

David Loebsack, Iowa 

Frederica S. Wilson, Florida 

CEWDOCROOM with DISTILLER

(III) 

C O N T E N T S 

Page 

Hearing held on December 3, 2013 ........................................................................ 1 

Statement of Members: 

Foxx, Hon. Virginia, Chairwoman, Subcommittee on Higher Education 

and Workforce Training ............................................................................... 1 

Prepared statement of ............................................................................... 3 

Hinojosa, Hon. Rube ́n, ranking minority member, Subcommittee on Higher Education and Workforce Training ......................................................... 4 

Prepared statement of ............................................................................... 5 

Statement of Witnesses: 

Dannenberg, Michael, director of higher education and education finance 

policy, the Education Trust .......................................................................... 52 

Prepared statement of ............................................................................... 54 

Draeger, Justin S., president, National Association of Student Financial 

Aid Administrators (NASFAA) .................................................................... 6 

Prepared statement of ............................................................................... 9 

Heath, Richard C., director, student financial services, Anne Arundel 

Community College, Arnold, MD ................................................................. 61 

Prepared statement of ............................................................................... 64 

Robinson, Jenna Ashley, Ph.D., John W. Pope Center for Higher Education Policy .................................................................................................. 27 

Prepared statement of ............................................................................... 29 

Additional Submissions: 

Mr. Draeger: 

Appendix A: NASFAA History of Federal Methodology and Pell 

Changes .................................................................................................. 18 

Appendix B: NASFAA Reimagining Aid Design and Delivery (RADD) 

report, Internet address to .................................................................... 27 

Appendix C: NASFAA A Tale of Two Incomes: Comparing PriorPrior Year and Prior-Year through Pell Grant Awards, Internet 

address to ............................................................................................... 27 

Mr. Hinojosa: 

The American Indian Higher Education Consortium, prepared statement of .................................................................................................... 94 

CEWDOCROOM with DISTILLER

CEWDOCROOM with DISTILLER

(1) 

KEEPING COLLEGE WITHIN REACH: 

STRENGTHENING PELL GRANTS 

FOR FUTURE GENERATIONS 

Tuesday, December 3, 2013 

U.S. House of Representatives 

Subcommittee on Higher Education and Workforce Training 

Committee on Education and the Workforce 

Washington, DC 

The subcommittee met, pursuant to call, at 10:00 a.m., in room 

2175, Rayburn House Office Building, Hon. Virginia Foxx [chairman of the subcommittee] presiding. 

Present: Representatives Foxx, McKeon, Thompson, Walberg, 

Guthrie, Heck, Brooks, Hudson, Messer, Hinojosa, Tierney, Bishop, 

Bonamici, Holt, Davis, Loebsack, and Wilson. 

Also present: Representative Kline. 

Staff present: James Bergeron, Director of Education and Human 

Services Policy; Amy Raaf Jones, Education Policy Counsel and 

Senior Advisor; Nancy Locke, Chief Clerk; Brian Melnyk, Professional Staff Member; Daniel Murner, Press Assistant; Krisann 

Pearce, General Counsel; Nicole Sizemore, Deputy Press Secretary; 

Emily Slack, Legislative Assistant; Alex Sollberger, Communications Director; Alissa Strawcutter, Deputy Clerk; Tylease Alli, Minority Clerk/Intern and Fellow Coordinator; Jody Calemine, Minority Staff Director; Eamonn Collins, Minority Fellow, Education; 

Jamie Fasteau, Minority Director of Education Policy; Eunice 

Ikene, Minority Staff Assistant; Julia Krahe, Minority Communications Director; Megan O’Reilly, Minority General Counsel; Rich 

Williams, Minority Education Policy Advisor; and Michael Zola, Minority Deputy Staff Director. 

Chairwoman FOXX. A quorum being present, the subcommittee 

will come to order. Good morning. Thank you for joining us for our 

hearing on the Pell Grant program. We have an excellent panel of 

witnesses here this morning, and we look forward to their testimony. 

This hearing is the 11th in a series designed to gain a more complete understanding of the challenges facing postsecondary students and institutions. The hearings help to inform the committee 

of policy changes that should be considered as part of the upcoming 

reauthorization of the Higher Education Act, we abbreviate HEA. 

Over the last year, these hearings have provided a forum to discuss opportunities to encourage innovation, increase transparency, 

enhance data collection and improve college access and affordCEWDOCROOM with DISTILLER

2 

ability. We have been fortunate to hear from a number of expert 

witnesses whose testimony and insight will provide invaluable as 

we begin crafting legislation next year to strengthen America’s 

higher education system through HEA reauthorization. 

With roughly 71 percent of undergraduates receiving some form 

of federal financial aid, simplifying the complex system of grants, 

loans and institutional support programs remains a central goal in 

our reauthorization efforts. 

Just last month, the committee discussed proposals to help 

streamline student aid programs. Today, we will build on that conversation by examining the Pell Grant program, which many consider to be the cornerstone of federal student aid. 

When the Pell Grant program began in the early 1970s, its central focus was providing financial assistance to help low-income 

students access higher education. In its first year, the program provided aid to 176,000 students. Since then, Pell has grown dramatically. Today, more than 9 million students are Pell Grant recipients. 

The sharp rise in Pell participation in more recent years has 

been attributed to several factors. One is the economic recession, 

which spurred many individuals to go back to school to learn skills 

needed to compete for today’s jobs. Also, Washington policymakers 

passed legislative changes to Pell to increase the program’s maximum grant award and weaken student eligibility requirements, allowing more students to receive larger Pell Grant awards. 

Since the program guarantees aid to any student who meets the 

eligibility criteria, enrollment spikes threaten the Pell program’s 

long-term fiscal viability. 

Pell is one of the federal government’s largest education expendi- tures, costing taxpayers about $30 billion a year. As with every federal program, especially one with such a hefty price tag, Washington leaders have a responsibility to ensure the Pell Grant program is effective. There is concern among members of the higher 

education community and many of my colleagues in Congress that 

Pell has strayed too far from its original intent. 

With such a large recipient pool, some worry the program could 

eventually become insoluble, leading to a lack of funds for our 

neediest students. Budget experts have projected multi-million dollar funding gaps, raising additional questions about whether the 

program’s current structure is fiscally responsible. Recognizing the 

Pell Grant program is on an unsustainable path, leaders in higher 

education, business, and public policy have begun circulating proposals for reform. 

One proposed first step to strengthen the program is to simplify 

the Pell Grant application process. It has been suggested that instead of forcing families to complete overwhelming amounts of paperwork, a more streamlined process would better inform students 

of their options and generate a more accurate reflection of their financial needs. 

Additional proposals suggest tightening eligibility requirements, 

increasing grant flexibility, and implementing accountability measures to ensure the program is not only helping the neediest students enroll in college, but is also rewarding and encouraging those 

who make progress toward completion. 

CEWDOCROOM with DISTILLER

3 

When hard-working taxpayer money is being spent, taxpayers 

deserve accountability, which means that it is critical that we have 

the information necessary to know what is and is not working in 

the Pell program. The Pell Grant program has become the epicenter of our nation’s financial aid system, and we all want to 

make sure it meets its targets of supporting low-income students 

who wish to earn a college degree. However, we must also be honest about the challenges facing the program and work together in 

good faith to enact smart policy changes that will help get the program back on stable ground. 

We have a great panel of witnesses with us today, and I look forward to hearing their thoughts on ways we can strengthen the Pell 

Grant program through our upcoming reauthorization of the Higher Education Act. 

I am now pleased to recognize my colleague, Mr. Rube ́n Hinojosa, 

the senior Democrat member of the subcommittee, for his opening 

remarks. 

[The statement of Chairwoman Foxx follows:] 

Prepared Statement of Hon. Virginia Foxx, Chairwoman, Subcommittee on 

Higher Education and Workforce Training 

Good morning. Thank you for joining us for our hearing on the Pell Grant program. We have an excellent panel of witnesses here this morning, and we look forward to their testimony. 

This hearing is the eleventh in a series designed to gain a more complete understanding of the challenges facing postsecondary students and institutions. The hearings help to inform the committee of policy changes that should be considered as 

part of the upcoming reauthorization of the Higher Education Act. 

Over the last year these hearings have provided a forum to discuss opportunities 

to encourage innovation, increase transparency, enhance data collection, and improve college access and affordability. We have been fortunate to hear from a number of expert witnesses whose testimony and insight will prove invaluable as we 

begin crafting legislation next year to strengthen America’s higher education system 

through HEA reauthorization. 

With roughly 71 percent of undergraduates receiving some form of federal financial aid, simplifying the complex system of grants, loans, and institutional support 

programs remains a central goal in our reauthorization efforts. Just last month the 

committee discussed proposals to help streamline student aid programs. Today we 

will build on that conversation by examining the Pell Grant program, which many 

consider to be the cornerstone of federal student aid. 

When the Pell Grant program began in the early 1970s, its central focus was providing financial assistance to help low-income students access higher education. In 

its first year, the program provided aid to 176,000 students. Since then, Pell has 

grown dramatically; today more than 9 million students are Pell Grant recipients. 

The sharp rise in Pell participation in more recent years has been attributed to 

several factors. One is the economic recession, which spurred many individuals to 

go back to school to learn skills needed to compete for today’s jobs. Also, Washington 

policymakers passed legislative changes to Pell to increase the program’s maximum 

grant award and weaken student eligibility requirements—allowing more students 

to receive larger Pell Grant awards. 

Since the program guarantees aid to any student who meets the eligibility criteria, enrollment spikes threaten the Pell program’s long-term fiscal viability. Pell 

is one of the federal government’s largest education expenditures, costing taxpayers 

about $30 billion a year. As with every federal program, especially one with such 

a hefty price tag, Washington leaders have a responsibility to ensure the Pell Grant 

program is effective. 

There is concern among members of the higher education community and many 

of my colleagues in Congress that Pell has strayed too far from its original intent. 

With such a large recipient pool, some worry the program could eventually become 

insoluble, leading to a lack of funds for our neediest students. Budget experts have 

projected multi-million dollar funding gaps, raising additional questions about 

whether the program’s current structure is fiscally responsible. 

CEWDOCROOM with DISTILLER

4 

Recognizing the Pell Grant program is on an unsustainable path, leaders in higher education, business, and public policy have begun circulating proposals for reform. One proposed first step to strengthen the program is to simplify the Pell 

Grant application process. It has been suggested that instead of forcing families to 

complete overwhelming amounts of paperwork, a more streamlined process would 

better inform students of their options and generate a more accurate reflection of 

their financial needs. 

Additional proposals suggest tightening eligibility requirements, increasing grant 

flexibility, and implementing accountability measures to ensure the program is not 

only helping the neediest students enroll in college, but is also rewarding and encouraging those who make progress toward completion. When hardworking taxpayer 

money is being spent, taxpayers deserve accountability which means that it is critical that we have the information necessary to know what is and is not working in 

the Pell program. 

The Pell Grant program has become the epicenter of our nation’s financial aid system and we all want to make sure it meets its target of supporting low-income students who wish to earn a college degree. However, we must also be honest about 

the challenges facing the program and work together in good faith to enact smart 

policy changes that will help get the program back on stable ground. 

We have a great panel of witnesses with us today, and I look forward to hearing 

their thoughts on ways we can strengthen the Pell Grant program through our upcoming reauthorization of the Higher Education Act. I now am pleased to recognize 

my colleague, Mr. Rube ́n Hinojosa, the senior Democrat member of the subcommittee, for his opening remarks. 

Mr. HINOJOSA. Thank you, Chairwoman Foxx. Today’s hearing is 

an opportunity to discuss ways in which Congress can strengthen 

the federal Pell Grant program, not to weaken it. I remember the 

8 years during the George W. Bush administration, the Pell Grant 

hovered at about $3,000 to $3,400 a year and, often times, cutting 

it at least 50 percent to try to get more money to go to the war 

in Iraq. I was not happy with that. We fought and got it back up 

to $3,000. 

In the past several years, Democrats have fought to make college 

more affordable by increasing the Pell Grant award by at least 

$1,600, from $4,050 in 2006 to $5,645 in 2014, allowing it to increase yearly with inflation. 

Before we hear from our distinguished panel of witnesses, I want 

to underscore the importance of the federal Pell Grant program in 

advancing college access and affordability. Serving approximately 9 

million hard-working students, the federal Pell Grant program is 

the single largest source of federal grant aid which supports college 

students. 

According to the presidents and the chancellors who came to visit 

me during the period that I was chairman of this committee, they 

said that those were the highest priorities they had—and that was 

to make higher education affordable and accessible, and that we 

should look very carefully at increasing the Pell Grant. 

Without a doubt, Pell grants are expanding access for low-income 

students and students of color. An estimated 92 percent of Pell 

Grant recipients have family incomes below the national median of 

$51,800. More than 60 percent of African-American undergraduates 

and half of the Latino undergraduates rely on Pell grants to afford 

the cost of a college degree. 

Pell grants strengthen our economy and boost workforce productivity. We know that a college degree can dramatically increase employment and wages, and move low-income students into the middle class. While I am proud of the federal investments that Congress has made in the federal grant program in the recent years 

CEWDOCROOM with DISTILLER

5 

through the passage of Student Aid and Fiscal Responsibility Act 

of 2010, known as SAFRA, and the College Cost Reduction and Excess Cost of 2007, I know that Congress can do much more to support college access and success. 

Unfortunately, recent budget agreements have reduced the Pell Grant funding by more than $50 billion, by cutting hundreds of 

thousands of students from the program. Many other changes 

slashed other federal student aid programs to fund the Pell Grant 

program. We can do better than robbing Peter to pay Paul. 

Moving forward, the Republican majority wants to eliminate 

hundreds of thousands, if not millions, more students from the Pell 

Grant program. The Republican-passed budget would do exactly 

that, by cutting $98 billion from that program alone. 

To be sure, students and families continue to struggle to afford 

the cost of a college degree. Skyrocketing college costs in recent 

years have eroded the purchasing power of the Pell Grant, forcing 

Pell Grant recipients to increase their reliance on student loans. 

Next year’s maximum Pell Grant award of $5,785 will cover the 

smallest share of college costs since the start of the program. It is 

troubling to me to know that Pell Grant recipients are already 

more than twice as likely as other students to have student loans. 

In closing, I want to say that as Congress is working to reauthorize the Higher Education Act, I urge my colleagues on both sides 

of the aisle to evaluate the Pell Grant as a piece of the larger budget discussions, and not limit themselves to solving short-term funding problems with long-lasting cuts to student aid. 

And with that, Madam Chair, I yield back. 

[The statement of Mr. Hinojosa follows:] 

Prepared Statement of Hon. Rube ́n Hinojosa, Ranking Member, 

Subcommittee on Higher Education and Workforce Training 

Thank you, Chairwoman Foxx. 

Today’s hearing is an opportunity to discuss ways in which Congress can 

strengthen the federal Pell Grant program, not weaken it. In the past several years, 

Democrats have fought to make college more affordable by increasing the maximum 

Pell Grant award by $1,600, from $4,050 in 2006 to $5,645 in 2014, allowing it to 

increase yearly with inflation. 

Before we hear from our distinguished panel of witnesses, I want to underscore 

the importance of the federal Pell Grant program in advancing college access and 

affordability. 

Serving approximately nine million hard working students, the federal Pell grant 

program is the single largest source of federal grant aid, which supports college students. 

Without a doubt, Pell Grants are expanding access for low-income students and 

students of color. An estimated 92% of Pell Grant recipients have family incomes 

below the national median of $51,800. More than 60% of African American undergraduates and half of Latino undergraduates rely on Pell grants to afford the cost 

of a college degree. 

Pell grants strengthen our economy and boost workforce productivity. We know 

that a college degree can dramatically increase employment and wages and move 

low-income students into the middle class. 

While I am proud of the federal investments the Congress has made in the Pell 

Grant program in recent years through the passage of Student Aid and Fiscal Responsibility Act of 2010 (SAFRA), and the College Cost Reduction and Access Act 

of 2007, I know that Congress can do much more to support college access and success. 

Unfortunately, recent budget agreements have reduced Pell Grant funding by 

more than $50 billion by cutting hundreds of thousands of students from the program. Many other changes slashed other federal student aid programs to fund the 

Pell grant program. We can do better than ‘robbing Peter to pay Pell.’ 

CEWDOCROOM with DISTILLER

6 

Moving forward, the Republican majority wants to eliminate hundreds of thousands, if not millions, more students from the Pell program. The Republican passed 

budget would do exactly that by cutting $98 billion from the program alone. 

To be sure, students and families continue to struggle to afford the cost of a college degree. Skyrocketing college costs in recent years have eroded the purchasing 

power of the Pell grant, forcing Pell grant recipients to increase their reliance on 

student loans. 

Next year’s maximum Pell grant award of $5,785 will cover the smallest share 

of college costs since the start of the program. It is troubling to know that Pell 

Grant recipients are already more than twice as likely as other students to have 

student loans. 

As Congress works to reauthorize the Higher Education Act, I urge my colleagues 

to value the Pell program as a piece of the larger budget discussions and not limit 

themselves to solving short-term funding problems with long lasting cuts to student 

aid. 

With that, I yield back. 

Chairwoman FOXX. Thank you, Mr. Hinojosa. Pursuant to committee rule 7(c), all subcommittee members will be permitted to 

submit written statements to be included in the permanent hearing 

record. And without objection, the hearing record will remain open 

for 14 days to allow statements, questions for the records, and 

other extraneous material referenced during the hearing to be submitted in the official record. 

It is now my pleasure to introduce our distinguished panel of witnesses. Mr. Justin Draeger serves as the president and chief executive officer of the National Association of Student Financial Aid administrators. Dr. Jenna Ashley Robinson is the director of outreach 

at the John W. Pope Center for Higher Education Policy, a nonprofit institute dedicated to improving higher education in North 

Carolina and the nation. Mr. Michael Dannenberg serves as the director of higher education and education finance policy at the Education Trust. Mr. Richard Heath is currently the financial aid director at Anne Arundel Community College, a public 2-year institution located in Arnold, Maryland. 

Before I recognize you to provide your testimony, let me briefly 

explain our lighting system. You will have five minutes to present 

your testimony. When you begin, the light in front of you will turn 

green. When one minute is left, the light will turn yellow. When 

your time is expired, the light will turn red. At that point, I ask 

that you wrap up your remarks as best as you are able. After you 

have testified, members will each have five minutes to ask questions of the panel. 

I now recognize Mr. Justin Draeger for five minutes. 

STATEMENT OF JUSTIN DRAEGER, PRESIDENT AND CEO, NATIONAL ASSOCIATION OF STUDENT FINANCIAL AID ADMINISTRATORS 

Mr. DRAEGER. Thank you, Chairwoman Foxx, Ranking Member 

Hinojosa, and members of the committee. As has been said, my 

name is Justin Draeger from the National Association of Student 

Financial Aid Administrators. We represent colleges and universities across the country. NASFAA member institutions serve 90 

percent of all federal student aid recipients. 

I am grateful to be able to talk to you about the Pell Grant program which, has been pointed out, serves 9 million students annually and over its 41-year history has benefited over 60 million stuCEWDOCROOM with DISTILLER

7 

dents. The program is well-targeted in that 85 percent of recipients 

have family incomes of less than $40,000. 

Fifty percent of those receiving Pell grants have family incomes of less than $20,000, and it is weighted towards those with the 

least resources. Seventy percent of Pell recipients are receiving the 

maximum award for their enrollment status. 

The Pell Grant program, of course, evolved out of the Basic Educational Opportunity Grant, or BEOG, in 1972. And the goal was 

very simple. It was to provide every qualified student with access 

to a postsecondary degree. And in 1980, BEOG was renamed Pell 

in honor of Senator Claiborne Pell of Rhode Island, a long-time 

champion of higher education access. 

In its early days, BEOG provided nearly universal access to post- secondary education. Its original grant of $1,400 covered approximately 70 percent of the cost of attendance at a 4-year school, and 

grew over the next couple years to cover 85 percent of the cost of 

attendance at a four-year public. While the maximum grant has gone from $1,400 to now over $5,600, it now only covers about 35 percent of the cost of attendance at a four-year public school. Over that time, the numbers of 

students and total amount spent on the program have also increased dramatically. And I have included in my remarks dollar 

amounts and a list of eligibility requirement changes that have 

been made in recent years for your reference. 

The higher education landscape is also quite different from when 

BEOG was first created, including the large-scale growth in the 

non-traditional student population, where non-traditional students 

have now become the traditional student; the need and amount of 

developmental and remedial education that is being required in 

higher education; the rapid expansion of innovative learning models; and the need in enrollment in vocational education; not to mention the increased scrutiny on student outcomes, most notably 

highlighted by the President’s recent proposals to tie student aid 

to student outcomes at the institutional level. 

With that changing landscape in mind, I would like to offer the 

committee three suggestions for Pell reform. The first one is to provide a Pell Promise as an early commitment program, from the 

government to students, early in high school. This type of program 

has been successful in state-run programs and has been shown to 

change student behavior, helping them make smarter decisions in 

secondary education to prepare for college. In Indiana, for example, 

the number of students matriculating to college increased by nearly 

90 percent over one generation over 18 years due to an early-commitment 21st century scholars program. 

The disparity between college enrollment of low-income and 

upper-income families is quite staggering. And when researched, 

most low-income students either do not prepare or do not attend 

college because they didn’t know or they didn’t believe that student 

aid funding would be available to them. In many instances, data 

showed that the lack of knowledge or confidence that funds would 

be there for them leads low-income students to inadvertently 

choose schools that may be more expensive or that doesn’t match— 

best match their academic preparedness. And this is sometimes 

called ‘‘under-matching.’’ 

CEWDOCROOM with DISTILLER

8 

Second would be to provide students a Pell Well funds that they 

could draw from as needed until the student completed their program or simply ran out of eligibility. This program would eliminate 

the gaps students face when they run out of Pell eligibility each 

summer after taking Pell during the fall and winter. It would also 

match up nicely with some of the new, innovative learning models 

that are being introduced, prior learning assessments and competency-based education programs. 

Such a program would be best suited if we moved to a prior-prior 

year assessment of a student or family’s ability to pay for college 

as opposed to what we use now, which is simply a prior year assessment. And finally, to provide a super Pell to students who enroll in enough credit hours to graduate within 4 years; to facilitate, 

in a traditional model, students attending college for 15 credit 

hours per semester. Doing so would eliminate the need of many 

students—and, most specifically, the non-traditional students— 

from working, borrowing or stopping out, which stopping out can 

run as high as 95 percent at some community colleges. 

I thank you for the opportunity to talk about Pell grants today, 

and look forward to working with the committee in this regard. 

[The statement of Mr. Draeger follows:] 

CEWDOCROOM with DISTILLER

9 

CEWDOCROOM with DISTILLER


Insert offset folio 1 here 85672.001
10 

CEWDOCROOM with DISTILLER


Insert offset folio 2 here 85672.002
11 

CEWDOCROOM with DISTILLER


Insert offset folio 3 here 85672.003
12 

CEWDOCROOM with DISTILLER


Insert offset folio 4 here 85672.004
13 

CEWDOCROOM with DISTILLER


Insert offset folio 5 here 85672.005
14 

CEWDOCROOM with DISTILLER


Insert offset folio 6 here 85672.006
15 

CEWDOCROOM with DISTILLER


Insert offset folio 7 here 85672.007
16 

CEWDOCROOM with DISTILLER


Insert offset folio 8 here 85672.008
17 

CEWDOCROOM with DISTILLER


Insert offset folio 9 here 85672.009
18 

CEWDOCROOM with DISTILLER


Insert offset folio 10 here 85672.010
19 

CEWDOCROOM with DISTILLER


Insert offset folio 11 here 85672.011
20 

CEWDOCROOM with DISTILLER


Insert offset folio 12 here 85672.012
21 

CEWDOCROOM with DISTILLER


Insert offset folio 13 here 85672.013
22 

CEWDOCROOM with DISTILLER


Insert offset folio 14 here 85672.014
23 

CEWDOCROOM with DISTILLER


Insert offset folio 15 here 85672.015
24 

CEWDOCROOM with DISTILLER


Insert offset folio 16 here 85672.016
25 

CEWDOCROOM with DISTILLER


Insert offset folio 17 here 85672.017
26 

CEWDOCROOM with DISTILLER


Insert offset folio 18 here 85672.018
27 

Appendix B: NASFAA Reimagining Aid Design and Delivery (RADD) report 

[The report, ‘‘Reimagining Financial Aid to Improve Student Access and Outcomes,’’ may be accessed at the following Internet address:] 

http://www.nasfaa.org/radd-event/ 

Appendix C: NASFAA A Tale of Two Incomes: Comparing Prior-Prior Year and Prior 

Year through Pell Grant Awards 

[The report, ‘‘A Tale of Two Income Years: Comparing Prior-Prior Year and PriorYear Through Pell Grant Awards,’’ may be opened at the following Internet address:] 

http://www.nasfaa.org/ppy-report.aspx 

Chairwoman FOXX. Thank you very much. 

Dr. Robinson, you are recognized for five minutes. 

STATEMENT OF DR. JENNA ASHLEY ROBINSON, DIRECTOR OF 

OUTREACH, JOHN W. POPE CENTER FOR HIGHER EDUCATION POLICY 

Ms. ROBINSON. Madam Chair, Ranking Member Hinojosa, and 

distinguished members of the committee, thank you for this opportunity on my own behalf and on behalf of the Pope Center. 

Pell grants, the Pell program faces two serious problems today. 

First, the increasing cost to the taxpayer and its failure to serve 

students well. The program, in short, is too expensive, and too few 

students graduate. By returning the Pell program to its roots, it is 

possible to trim costs while improving student success and access. 

Let me start with costs. 

In 2011–2012, over 9 million students received Pell grants. Awards totaled more than $33 billion. Thirty-five percent of all 

U.S. students received some form of Pell grant. Since the creation 

of the program, participation has grown more than 4,500 percent, 

and much of that growth consists of middle-income students. Eight 

percent of Pell recipients come from families whose income is higher than the national median, and 60 percent of the Pell recipients 

come from families above the federal poverty threshold. 

It may seem ironic that these middle-income students do not, in 

general, benefit from Pell grants. Students from families earning 

$25,000 to $55,000 who receive Pell grants are actually less likely 

to graduate than non-recipients with the same income. For low-income students the opposite is true. Pell recipients whose families 

earn less than $25,000 are more likely to graduate than non-recipients with the same income. In short, Pell grants help our neediest 

students achieve graduation but do not improve graduation rates 

for middle-income students. 

Pell grants also work best for students with strong academic 

backgrounds. The college retention rate of Pell recipients who took 

a rigorous curriculum in high school was 87 percent, compared to 

just 57.6 percent for grantees without a rigorous curriculum. Pell 

recipients with SAT scores between 400 and 800 graduated at a 

rate of only 34.2 percent. Those with scores between 1140 and 

1600, out of 1600, graduated at a rate of 73.7 percent. Similar differences are seen when high school GPAs of Pell grantees are compared. 

CEWDOCROOM with DISTILLER

28 

With that in mind, we have several recommendations. First and 

foremost, we need better data so the Department of Education can 

evaluate the effectiveness of Pell grants. And second, we need to 

make sure that the public can have access to that data. But better 

data are just a start. Financial eligibility should be limited to students whose income falls below 133 percent of the federal poverty 

level, a cutoff commonly used for qualification for programs such as 

Medicaid. With a simple cutoff, the FAFSA can be simplified. 

For very low-income students, full eligibility could be determined 

in only five or six questions instead of the long form that students 

face today. And for students who are not very low-income, the form 

could be simplified, but not quite to that extent. Colleges and universities, next, should place limits on students’ Pell grant money to 

stop students from receiving grants and then dropping out of their 

courses. One positive example comes from North Carolina, from 

Central Piedmont Community College. They have implemented 

several policies to do just that. 

They don’t disburse grants until after 10 percent of the semester 

has been completed. They disburse money in two parts over the semester to make sure that students stay around. And they limit 

what can be purchased with financial aid. Next, grants should go 

to students who are prepared for the challenge of college work. 

Academic requirements for initial and continuing Pell eligibility 

should be tightened. One option to do so would be to match academic standards set by the National Collegiate Athletic Association, which requires first-year athletes to have completed certain 

high school courses. 

It also requires students to have taken ACT or the SAT and to 

meet threshold scores based on GPA. Such a policy would focus on 

the students most likely to succeed, and give them an incentive to 

better prepare for college. To further encourage students to graduate, grant amounts should be linked to enrollment intensity. Students who receive the maximum award should be expected to take 

15 credit hours, not 12. Also, this could be coupled with the Pell 

Well concept introduced by the National Association of Student Financial Aid Administrators, which bases awards on a 12-month 

schedule rather than the academic year. 

In sum, the current Pell program faces serious challenges. But 

we can meet those challenges with better data, financial planning 

and student accountability. Thank you. 

[The statement of Ms. Robinson follows:] 

CEWDOCROOM with DISTILLER

29 

CEWDOCROOM with DISTILLER


Insert offset folio 19 here 85672.019
30 

CEWDOCROOM with DISTILLER


Insert offset folio 20 here 85672.020
31 

CEWDOCROOM with DISTILLER


Insert offset folio 21 here 85672.021
32 

CEWDOCROOM with DISTILLER


Insert offset folio 34 here 85672.034
33 

CEWDOCROOM with DISTILLER


Insert offset folio 35 here 85672.035
34 

CEWDOCROOM with DISTILLER


Insert offset folio 36 here 85672.036
35 

CEWDOCROOM with DISTILLER


Insert offset folio 37 here 85672.037
36 

CEWDOCROOM with DISTILLER


Insert offset folio 38 here 85672.038
37 

CEWDOCROOM with DISTILLER


Insert offset folio 39 here 85672.039
38 

CEWDOCROOM with DISTILLER


Insert offset folio 40 here 85672.040
39 

CEWDOCROOM with DISTILLER


Insert offset folio 41 here 85672.041
40 

CEWDOCROOM with DISTILLER


Insert offset folio 42 here 85672.042
41 

CEWDOCROOM with DISTILLER


Insert offset folio 43 here 85672.043
42 

CEWDOCROOM with DISTILLER


Insert offset folio 44 here 85672.044
43 

CEWDOCROOM with DISTILLER


Insert offset folio 45 here 85672.045
44 

CEWDOCROOM with DISTILLER


Insert offset folio 46 here 85672.046
45 

CEWDOCROOM with DISTILLER


Insert offset folio 47 here 85672.047
46 

CEWDOCROOM with DISTILLER


Insert offset folio 48 here 85672.048
47 

CEWDOCROOM with DISTILLER


Insert offset folio 49 here 85672.049
48 

CEWDOCROOM with DISTILLER


Insert offset folio 50 here 85672.050
49 

CEWDOCROOM with DISTILLER


Insert offset folio 51 here 85672.051
50 

CEWDOCROOM with DISTILLER


Insert offset folio 52 here 85672.052
51 

CEWDOCROOM with DISTILLER


Insert offset folio 53 here 85672.053
52 

Chairwoman FOXX. And I thank the first two witnesses for being 

so good about being on time. 

Mr. Dannenberg, I recognize you for five minutes. 

STATEMENT OF MICHAEL DANNENBERG, DIRECTOR OF HIGHER EDUCATION AND EDUCATION FINANCE POLICY, THE 

EDUCATION TRUST 

Mr. DANNENBERG. Thank you. I have three basic messages for 

the committee. The first is, tread lightly. The second is, pursue a 

balanced approach to any long-term funding gap in the Pell program. And the third is to attempt to leverage state institutional aid 

in support of college affordability and college completion in order 

to make the Pell Grant program more impactful. 

I am a maximum Pell grant recipient first-generation college 

graduate. I am one of many success stories out there. There are 

millions of folks who have overcome far more significant hardships 

than I have, and have accomplished far more. Which is why I 

want—which leads to my first point of treading lightly. The Pell 

Grant program has been very successful. Forty years ago, the percentage of low-income students who were pursuing a higher education was less than half of the percentage today. We have cut the 

gap between low-income students and upper-income students in 

pursuing higher education by 40 percent in those 40 years. 

So Pell is making a difference in millions of lives, as has been 

discussed, at least with respect to access. I think it is important to 

keep in mind Representative Hinojosa mentioned that 90 percent 

of Pell recipients have incomes of less than $50,000. For those with 

incomes between $30,000 and $50,000, after you add up grant aid, 

scholarship aid, whatever the feds expect to pay out of your pocket 

students still have unmet need of some $11,000 to pay for 1 year 

of higher education. Now, they are filling that unmet need with 

loans, with additional work, eating Ramen noodles. 

The point is that these students are living on the edge. So if you cut Pell grant funding for students who are in that $30,000 to 

$50,000 range you run two major risks. The first is that some students will not pursue higher education. And the second is, as Justin mentioned, a number of students who are eligible and academically prepared to go to 4-year institutions will instead under-match 

down to 2-year institutions where, all things being equal, they are 

substantially less likely to complete. 

Second message. In dealing with the long-term funding gap, I 

think a balanced approach is appropriate, one that targets spending reductions in areas that are not linked to needy students directly and pursues revenue enhancements in the program side. I 

have listed a host of offset options in my testimony. I am just going 

to throw out one with respect to targeted spending reduction. Right 

now, if a student leaves higher education before a term is up the 

school is theoretically responsible for returning the financial aid 

that that student received: the Pell Grant aid that student received. 

But right now, the rules are very loose. Once a student puts in 

60 percent of a term, the school gets to keep 100 percent of the 

money. If a student drops out and doesn’t notify the school when 

they are dropping out, the school gets to assume that the student 

CEWDOCROOM with DISTILLER

53 

was there 50 percent of the time and keep 50 percent of the money. 

If you tightened up the return of Title IV rules alone over some 10 

years our estimate is that upwards of $10 billion could be saved. 

And like I said, we have a list of offsets included in my testimony. 

A number of them are on the revenue side in terms of increasing 

revenue to the Pell Grant program. 

This brings me to the third message: leveraging state and institutional aid in support of improved college completion and college 

affordability. State aid, declining state aid, is the number one driver of increased college tuition. As Justin mentioned, high school 

academic preparation is the number one driver of college completion. The feds are small players in this game, overall; major, but 

still small. The big players are still, financially, states and institutions of higher education. 

If we could incentivize states to, if not maintain their funding, 

at least embrace policies that ensure that low-income students can 

pursue higher education with a debt-free guarantee or low tuition—as Justin mentioned with respect to Indiana, which is a 

model program—you could dramatically improve college completion 

and reduce college costs. 

I want to be clear that this is not some sort of pie-in-the-sky 

idea. I worked for Congress for a long time. Congress has a long 

history of consolidating programs, targeting programs, delivering 

that aid in lump sums. We would suggest doing that with respect 

to a number of higher education programs—loans, grants, tax benefits—outside the Pell Grant, outside unsubsidized loans. Delivering 

that money to states, then let states do what they think is best in 

order to achieve the type of outcome that they have in Indiana. 

Imagine being able to say to an eighth grade student, ‘‘If you are 

responsible, if you work hard in high school, we will guarantee that 

you can go to a 4-year public college of your choice within your 

state, at the very least, without incurring any new debt. Or have 

it with an interest-free loan or with a cap on your debt.’’ That type 

of promise is possible. Students who have the talent, desire and 

drive to pursue a secondary education should be able to do so without being hindered by inability to pay. 

That was Senator Pell’s vision 40 years ago. I still think it is 

right today. 

[The statement of Mr. Dannenberg follows:] 

CEWDOCROOM with DISTILLER

54 

CEWDOCROOM with DISTILLER


Insert offset folio 22 here 85672.022
55 

CEWDOCROOM with DISTILLER


Insert offset folio 23 here 85672.023
56 

CEWDOCROOM with DISTILLER


Insert offset folio 24 here 85672.024
57 

CEWDOCROOM with DISTILLER


Insert offset folio 25 here 85672.025
58 

CEWDOCROOM with DISTILLER


Insert offset folio 26 here 85672.026
59 

CEWDOCROOM with DISTILLER


Insert offset folio 27 here 85672.027
60 

CEWDOCROOM with DISTILLER


Insert offset folio 28 here 85672.028
61 

Chairwoman FOXX. Thank you, Mr. Dannenberg. 

Mr. Heath, you are recognized for five minutes. 

STATEMENT OF RICHARD C. HEATH, DIRECTOR, STUDENT 

FINANCIAL SERVICES, ANNE ARUNDEL COMMUNITY COLLEGE 

Mr. HEATH. Chairwoman Foxx, Ranking Member Hinojosa and 

members of the committee, I am pleased to be here today to 

present this testimony. On behalf of my institution, Anne Arundel 

Community College, on behalf of the 17 professional financial aid 

staff at my institution, and the nearly 6,000 Pell Grant recipients 

we are currently serving. We are happy to engage with the committee on how we can improve the Pell Grant program, especially 

in the areas of increased flexibility for non-traditional students, encouraging completion, to finding and identifying the neediest students, and eliminating fraud and limiting abuse. 

With almost 1,200 community colleges nationwide and millions of 

Pell recipients, these topics are of high importance and extremely 

relevant to our institutions and students today. Increased flexibility for non-traditional students: many non-traditional students 

determine their best option is to take less than 12 credits because 

of family and work responsibilities. The Pell grant should be flexible enough to pay for those credits only. Currently, if a student is 

eligible for the maximum Pell grant, but is registered for nine credits, he receives the same amount of Pell as the student who registers for 11 credits. 

Students in this scenario are using up their Pell lifetime eligibility used, but not earning the most credits allowed. This penalizes the non-traditional student who often is not able to attend fulltime. More flexibility in this area would be a win-win. For the nontraditional student, they would be pursuing their educational goals 

at a pace that fits their other time commitments, and the taxpayer 

would not be paying for credits that are not yet earned. 

Encouraging completion: Maryland has responsibility passed the 

College and Career Readiness and College Completion Act of 2013, 

or known as SB–740. A good summary and an FAQ on this initiative can be found at the website for the Maryland Association of 

Community Colleges. This initiative takes significant steps to better prepare Maryland students for college and encourages completion once they get there. There are similar initiatives in other 

states, but there are still a large number of states with no such 

progress. 

Colleges have data that indicate that students who need more 

than two developmental classes have a significant drop in program 

completion. And it follows that the more developmental classes required, the more the program completion rate drops. Maryland law 

SB–740 attempts to decrease the need for developmental education 

on the college level, simplifying the process for defining and identifying the neediest students. We know who the neediest students 

are, and we can identify them as early as middle school and certainly by grades 10 through 12, as there is a means test in place 

to identify those who qualify for subsidized meals in the public 

schools. 

The recommendations noted in my written testimony are part of 

a report from the NASFAA reauthorization task force, of which I 

CEWDOCROOM with DISTILLER

62 

was a member. The seven recommendations that I have highlighted would have a positive impact on college access through all 

the Title IV programs, and allow students who have, or whose families have, already demonstrated high needs to auto-qualify for 

maximum federal aid, and would reduce the need for a separate financial aid application or, at the very least, further reduce the 

number of questions aimed at determining financial ability to pay. 

In the interest of time, I direct you to those seven recommendations in my written testimony which, if adopted, would make a significant contribution to defining and identifying the neediest students. 

Eliminating fraud and eliminating abuse: I begin with the 

premise that aid administrators are committed to ensuring that all 

students legitimately pursuing higher education have access to the 

funding they have been determined to be eligible to receive. At the 

same time, aid administrators have the responsibility of preventing 

those who are not eligible from receiving any amount of financial 

aid. 

Pell, like other federal programs, is subject to fraud. Compared 

to other programs, fraud in the Pell Grant program is relatively 

minimal in terms of numbers of cases and dollar amounts. Financial aid administrators responsible for awarding Title IV funds are 

at the core of attention, somewhere between making the process 

simple and quick for students while asking enough questions to determine eligibility and prevent fraud. Eliminating the possibility 

for fraud—that is, students or potential students acting with criminal intentions to access federal funds using either fraudulent information or the stolen identity and information of someone else—is 

of the highest concern to financial aid administrators across institutional types and mission goals. 

Our goal is to eliminate fraud in the programs while, at the same 

time, assisting the vast majority of students who are pursuing their 

educational goals legitimately. Identity theft is a global problem 

and in a category by itself. Along with identity theft, aid administrators are cognizant of the attempts to submit documents that are 

fraudulent to support a student’s claim of having little or no income, academic attainment for high school and/or college, medical 

documentation to support SAP appeals, exaggerated family size or 

number of family members in college, residency status, and other 

document types that determine eligibility for federal funds. 

The Department of Education has been highly cooperative and 

responsive to our concerns and has taken steps over the last few 

years to help institutions take preventative action, including systemically identifying files that have unusual enrollment patterns, 

significant use of Pell Grant eligibility, and high amounts of loan 

debt. Ed then electronically notifies the financial aid office and a 

follow-up is conducted to determine if they are, in fact, who they 

say they are, or if they are legitimately pursuing appropriate educational goals, or if they are someone trying to take advantage of 

the system and misuse federal funds. 

In the written portion, I have— 

Chairwoman FOXX. Mr. Heath, Mr. Heath, I am going to ask you 

if you can wind up, please. You are almost two minutes over. 

CEWDOCROOM with DISTILLER

63 

Mr. HEATH. Some of recommendations have been implemented at 

Anne Arundel, but yet we still see numbers of students that attempt to fraudulently obtain federal aid. 

[The statement of Mr. Heath follows:] 

CEWDOCROOM with DISTILLER

64 

CEWDOCROOM with DISTILLER


Insert offset folio 29 here 85672.029
65 

CEWDOCROOM with DISTILLER


Insert offset folio 30 here 85672.030
66 

CEWDOCROOM with DISTILLER


Insert offset folio 31 here 85672.031
67 

CEWDOCROOM with DISTILLER


Insert offset folio 32 here 85672.032
68 

CEWDOCROOM with DISTILLER


Insert offset folio 33 here 85672.033
69 

Chairwoman FOXX. Thank you very much. 

I want to now recognize the chairman of the higher Education 

and Workforce Committee, Mr. Kline, for five minutes. 

Mr. KLINE. Thank you, Madam Chair. Thank you to the witnesses for being here, your quite excellent testimony. 

Dr. Robinson, I am trying to understand how your idea of—looking at your testimony—we would require students to have taken 

the ACT or the SAT and to meet threshold scores based on GPA. 

So I listened carefully to your testimony. You talked about how you 

have a greater success rate if they have had a rigorous high school 

education and so forth. But I don’t understand how this would 

work for the millions of what we are still calling ‘‘non-traditional 

students,’’ people going back to the community college or for-profit 

school or something like that to get a particular skill. 

They haven’t thought about rigorous high school or SAT, ACT for 

maybe years. And by the way, I agree with the chairwoman that 

we ought to find another term beside non-traditional student, since 

the majority of college students now are in higher education are 

non-traditional. So how would that work? 

Ms. ROBINSON. I think it would be best to only apply those standards to students coming directly out of high school, and there 

should be alternative standards for the new traditional student, the 

part-time student. Additionally, I think there should be ways for 

students who have perhaps not achieved, in high school, what they 

find later in life themselves to be capable of, to find an alternative 

way to achieve standards. For example, after one semester of satisfactory academic progress in a community college, they become reeligible, even if they weren’t under rigorous high school standards. 

Mr. KLINE. So if they had the low SAT, ACT they would have 

to go that first semester not qualifying for a Pell grant. But if they 

demonstrated, then, academic capability they would be? I am— 

Ms. ROBINSON. Exactly. 

Mr. KLINE. Okay. 

Ms. ROBINSON. Giving students a second chance. 

Mr. KLINE. Okay. That was my other question. Excellent. 

Mr. Draeger, I am interested in—‘‘intrigued by’’ might be a better 

word—the Pell Well idea. Could that be too costly for the government to administer this thing? 

Mr. DRAEGER. The cost is a good question. The way the Pell Well 

would really work is, you are telling a student upfront how much 

in dollars as opposed to percentages, which is what we do now, 

they would qualify for. And percentages based on full-time enrollment don’t translate well for most students; dollars make sense. In 

the long run, in over a five or 10-year projection, I am not sure that 

it would cost any more. Because you are telling them a lifetime eligibility limit based on what Congress recently did, which was 

shrink it from 18 semesters to 12. 

So while an outlay may be more in year one, over a five-year or 

10-year period I am not sure cost would go up. Because we are just 

using a dollar amount as opposed to a percentage, which is what 

we use now. 

Mr. KLINE. Okay. Again, thank all the witnesses. Really helpful 

as we are trying to move forward to a reauthorization of the Higher 

Education Act. I think this is our 11th or 12th-something hearing 

CEWDOCROOM with DISTILLER

70 

to try to grapple with a lot of these issues. A lot of it has been focused on financial aid in the large, and specifically Pell grants and 

loans, and how do we do loans and all of those things, because it 

is central to the issue of getting people access to an affordable education. And it is doggone confusing. 

So, again, thank you very much for your input here today. And, 

Madam Chair, I will yield back. 

Chairwoman FOXX. Thank you, Mr. Chairman, for also being a 

great role model. And one person at maybe not our last hearing, 

but recently, has suggested that we use the term ‘‘contemporary 

student.’’ So that is one of the suggestions that has been put out 

there. But we are looking for an alternative to using non-traditional, since the non-traditional are now 75 percent of students. 

I now recognize Mr. Hinojosa for five minutes. 

Mr. HINOJOSA. Thank you. Mr. Dannenberg, as you stated in 

your testimony, the maximum Pell now covers less than a third of 

the average tuition at a public 4-year institution due to the rising 

college costs. In light of the diminishing purchasing power of the 

Pell grant, now the lowest since its inception, could you discuss the 

reliance of Pell recipients on federal student loans? 

Mr. DANNENBERG. I am sorry? Can you repeat that? Would I discuss what? 

Mr. HINOJOSA. Could you discuss the reliance of Pell grants— 

Mr. DANNENBERG. Nine out of 10 Pell Grant students assume 

student loans. It is twice the rate of non-Pell Grant students. As 

you know, the average student who completes a 4-year degree does 

so at some $27,000 in debt. 

Right—we used to have a situation where grants were the base 

of student financial aid packages, and loans were supplemental. 

Now we have a situation where loans are the base of financial aid 

packages and grants are supplemental. That diminishes students’ 

ability to take on certain occupations when they leave, and it has 

a very real impact—particularly on students of certain demographic groups when it comes to loan aversion, debt aversion and 

the idea of even going to higher education, much less going to a 

school that is a good fit. 

Mr. HINOJOSA. I agree with you. You indicated also that 60 percent of the African-American, and 51 percent of Latino undergraduates rely and depend on the Pell grants. Thus, could you elaborate 

on the importance of Pell to minority students? 

Mr. DANNENBERG. Yes, that is absolutely correct. There have 

been a number of studies—Tony Carnevale at Georgetown University is probably the leading academic on this—that indicate the 

United States is going to be in desperate need of more students, 

more workers with postsecondary certificates and degrees, where 

those students have to come from are low-income and minority populations, in particular Latino and African-American. 

Reducing the Pell grant will have an effect on college access for 

low-income students, a disproportionate impact on African-Americans and on Latinos. We should be increasing our investment, not 

decreasing it. 

Mr. HINOJOSA. I want you to elaborate on the recommendations 

that you listed on addressing the Pell funding gaps. 

CEWDOCROOM with DISTILLER

71 

Mr. DANNENBERG. Sure. As I mentioned, I think we should pursue targeted spending reductions that are directed at institutions 

as opposed to needy students. This committee, Congress, has dealt 

with repeated Pell Grant shortfalls and funding gaps in recent 

years. Almost all of those funding gaps and shortfalls have been 

filled with student benefit cuts. We need to stop doing that. Instead, focus on spending reductions that are targeted at institutions or revenue enhancements. 

I have listed a number of possible revenue enhancements. One 

of my favorite ones has to do with the outstanding federal family 

education loan volume. There are about $400 million in outstanding federal family education loans, FEL loans. Every time one 

of those loans is paid off early or converted to the direct loan program the government saves money. We should be incentivizing. 

We should be authorizing the secretary of education to buy down 

that debt—from borrowers, from lenders, wherever—get rid of that 

debt. Save funds, drive those funds into the Pell Grant program. 

The New America Foundation estimates $17 billion over 10 years 

can be saved that way. 

Mr. HINOJOSA. I thank you. 

Dr. Robinson, in your remarks you spoke about revising the return to the Title IV rules. When a student withdraws from college 

prior to completion of a term, the former student and her institution generally must return a portion of the disbursed federal financial aid; Title IV aid, which includes Pell Grant grants. I wonder 

if you have compared that recommendation with the what we call 

‘‘for-profit colleges and universities,’’ which often times recruit 

those who were not college-ready and somehow get them started. 

They get the Pell grant and they quit very quickly. 

In fact, the numbers that I have seen indicate that 25 percent 

of the money available for Pell grants is used up by only 10 percent 

of the students going to college through the for-profit colleges. 

What if they had to return 90 percent of the money that they receive from a Pell grant of, let’s say, $6,000 because the student 

dropped out early. Can you discuss that with me? 

Ms. ROBINSON. I haven’t looked at that specifically, but I think 

making sure that students are accountable regardless of the type 

of institution that they attend is very important. I think that there 

are many programs that provide a model for how to do that. I mentioned one in North Carolina, Central Piedmont. And I think that 

there should be incentives for institutions to make sure that the 

students who begin actually complete. 

Mr. HINOJOSA. Now, let the record show that I question the 

amount that the for-profit colleges are returning to us when the 

students drop out. 

Thank you. 

Chairwoman FOXX. Thank you, Mr. Hinojosa. 

Mr. Walberg, you are recognized for five minutes. 

Mr. WALBERG. I thank the chairman, and I thank the committee 

for being here. 

Mr. Draeger, interested to see that you spent some time in East 

Lansing. It is an exciting place to be, especially with this Saturday 

coming up. I say that knowing that the University of Michigan is 

in the room, as well. Proud of both. 

CEWDOCROOM with DISTILLER

72 

Great game this weekend with Ohio State. 

I appreciate your perspective. And especially dealing with financial advisors and managers of institutions. If the criteria for Pell 

eligibility were made more rigorous, how do you think institutions 

would respond to this change? And how do you think this might affect persistence specifically of the students? 

Mr. DRAEGER. There is a tension between the eligibility requirements for financial aid and simplicity; making it simple enough 

that students, needy students, will apply for financial aid. In the 

past, that tension has been greater than it is today because we rely 

so much on technology. Almost 100 percent—not quite, but almost 

100 percent—of people who apply for financial aid today do it 

through an online application that allows them to skip by questions 

that don’t apply for them. 

So if you are truly needy, qualify for federal means-tested benefits or other ways that we are identifying that you are truly needy, 

you can import information from the IRS, or you are given a pass 

through the majority of the FAFSA questions. So that tension that 

existed in the past doesn’t truly exist today. 

So if we moved the period of time that students have to apply 

back a little bit, we could ask more complicated questions and use 

skip logic that would still allow needy students to pass through the 

FAFSA very quickly but still get to some rigorous questions for 

those students who are sort of on the cusp to find out if they are 

truly needy or have some financial strength that is not currently 

reflected in the federal needs analysis formula. 

I think schools would welcome that move. 

Mr. WALBERG. Would you say that that would also add to the expectation of success, ultimately, and the outcome for a student completing as opposed to just accessing the education? 

Mr. DRAEGER. I am not sure that there is research that shows 

the link between federal student aid eligibility, at least in terms of 

financial strength of a family and completion. What would mean 

more to success is moving back that application period so that students would have a clearer idea and confidence of their financial 

aid package to know how much money they would have to attend 

college. That would have a meaningful difference in persistence 

and completion. 

Mr. WALBERG. Mr. Heath, earlier this year I had the opportunity 

to hear testimony from the inspector general of the Department of 

Education that pointed out that of the $32 billion that will be spent 

on Pell this year, nearly $1 billion of that will be going to individuals that should not receive it. What you have instituted at Anne 

Arundel Community College to discourage and prevent the potential for waste, fraud and abuse sounds interesting, from your testimony. 

Could you expand upon that? And are there other tools that may 

be helpful to consider in reauthorizing the Higher Education Act? 

Mr. HEATH. Yes. One of the primary things that we did 2 years 

ago was implement an affirmative daily attendance process. And 

we tied that process with our disbursements. So if a student is registered full-time, 12 credits right now, before that money will disburse—before the Pell money disburses to their student account— 

CEWDOCROOM with DISTILLER

73 

our process goes over to check to see if that student has, in fact, 

started attending the class that the aid is going to be paying for. 

If they haven’t had attendance recorded, that aid does not move. 

So we have closed the loophole between students registering for 

class, they were eligible for the money— 

Mr. WALBERG. The student is fully aware of that, as well. 

Mr. HEATH. The students are fully aware of that. We publicize 

that. And every semester, as you might imagine, we do have a faculty once in a while that doesn’t record attendance and the student 

comes in wanting to know where their money is. So it is a way to 

close that gap. 

The other thing that we have done is, for all of our students that 

are only online, we have a process that we run prior to disbursing 

funds that gives us a list of all those students. 

We compare addresses. So if we were to see multiple students 

coming from the same address, we would not disburse money. We 

would do a further check. We haven’t found that yet. We have 

found a husband and wife, or a father, son or something like that. 

But we haven’t found multiple students coming from the same address. But we do have that process in place now. 

Mr. WALBERG. I thank the chairwoman. My time has expired. 

Chairwoman FOXX. Thank you very much. 

Mr. Loebsack, you are recognized for five minutes. 

Mr. LOEBSACK. Thank you, Madam Chair. Thanks for having this 

important hearing today. And I do want to thank all of you for 

being here today and offering some possible solutions to sort of 

tightening up the program, making sure that we don’t have waste, 

fraud and abuse. 

I do want to emphasize Mr. Dannenberg’s first point, which I 

think was tread lightly. This is something—I just think we have 

to be very, very careful that we continue to have a program that 

provides access to these low-income students when we—sure, we 

all want to wring out waste, fraud and abuse. We all want to make 

sure that these folks are held accounting, that they are not taking 

advantage of the system. 

We have all heard stories about that in the past. Myself, many 

members here have heard me talk about how I grew up in poverty 

myself. I had a single mother, parent, who had an 11th grade education. Like you, Mr. Dannenberg, first-generation college student. 

I wouldn’t have been able to get to college had it not been for my 

friends, actually, who came from different family situations and 

took all this very seriously. So I sort of determined what I was 

going to do based, in no small measure, on my relationships with 

my friends. 

But I was able to take advantage of programs like this to go to 

Iowa State University. The last thing I want to see is these programs be eviscerated in one way or another. So I think it is important that we do tread lightly, that we keep in mind what the ultimate goal here is. And that is to make sure that students who 

don’t always have the most advantageous backgrounds have access 

to college—a college education. Not only for their own sake, but for 

the sake of our country, for the sake of the competitiveness of the 

United States of America. 

CEWDOCROOM with DISTILLER

74 

I think we have to keep that big picture in mind, as well. And 

also, we have talked a little bit about the skills gap. Community 

colleges, we all know, are extremely important in this country. In 

the state of Iowa, the governor and others have quite rightly pointed out and identified the skills gap, and how community colleges 

are going to be very important in educating folks so that they can 

get into those mid-level skilled jobs. And community colleges are 

absolutely critical on that front, as far as I am concerned. 

I taught at a small college, Cornell College, for 24 years. Important college in terms of educating folks. But community colleges 

really are the key. I call them the intersection, if you will, between 

education and workforce development. The principal—not the only, 

but the principal—intersection. So we have to be careful also that 

we not so restrict the environment out there for these students who 

want to go to these community colleges. 

I understand we have to tighten it up, but we have to be very 

careful, too, that we tread lightly. And I just have one question for 

you, Mr. Dannenberg. You mention on page three of your testimony 

that—your written testimony that you lament the fact that the 

year-round Pell Grant program—something that I championed, as 

a matter of fact, a number of years ago, that that has gone by the 

wayside, in no small measure to try to restrain the cost of the Pell 

Grant program. 

Can you talk to us a little bit about the effects of that? Because 

you mentioned it kind of in passing, more than anything else, on 

page three. 

Mr. DANNENBERG. Sure. I think, first of all, the institutions that 

are affected more than any other institution by ending what has 

been called ‘‘Second Pell’’ or ‘‘Summer Pell’’ are community colleges 

and historically black colleges and universities in particular. And 

the situation is that a number of students are coming in under-prepared academically. Forty-odd percent are having to take at least 

one developmental course. 

So before the credit-bearing work they are having to learn at the 

post secondary level what they were supposed to be exposed to in 

high school, which is why we should have a college career-ready 

course of study for all students at the high school level. But because they are behind, they are then behind at the end of their 

first year. They are not on track to graduate on time. 

So what was happening over the summer—and it was expensive 

because this affects so many students—is that they were catching 

up. So that when they began their second year they were actually 

going to be second-year students instead of a second-year student 

who has only 14 credits and is really, in effect, a first-year student 

or 12 credits. Second Pell, or Summer Pell, was having an access 

impact, particularly at community colleges and historically black 

colleges and universities. And they are hurting as a result of its reduction, not to mention the needy students who are affected. 

Mr. LOEBSACK. Thank you. And I want to thank all of you for 

your testimony, and thanks for indulging me. I normally don’t take 

up this much of the 5 minutes with my own speech, if you will. But 

I do think it is really, really critical that we keep in mind that we 

have to have a balanced approach here and that we have to tread 

lightly and that we cannot cut these programs to the bone, where 

CEWDOCROOM with DISTILLER

75 

it is actually going to deprive students who are willing to take the 

initiative and the personal responsibility, which I think we all 

value, to invest themselves in these programs so that they can be 

better students, so they can be better citizens. 

Thank you. Thank you, Madam Chair. 

Chairwoman FOXX. Thank you, Mr. Loebsack. 

Dr. Heck, you are recognized for five minutes. 

Mr. HECK. Thank you, Madam Chair. And thanks, thank all of 

you for being here today. Like Mr. Dannenberg, I am the first in 

my family to go to college, and also was a maximum Pell Grant recipient, and understand the importance of Pell Grants in helping 

students achieve their dreams. And it is why, when we were having the debate on student loan interest rates, I introduced amendments that would redirect some of the savings into funding Pell 

Grants. 

And while it may be semantics—we talk about federal financial 

aid making college more affordable—I always say it makes it more 

accessible. It doesn’t necessarily make it more affordable because 

it doesn’t really address the reasons that tuition and fees have increased by 538 percent since the early 1980s, almost twice as fast 

as health care costs and nearly four times—four-and-a-half times 

as fast as inflation. 

And so what I want to know is, what are doing to really try to 

address the costs of a postsecondary education? Some have theorized that we are in this circular loop of we increase financial aid, 

which then somehow results in higher tuition and fees because 

there is more money available, and then we have to increase financial aid to keep up with those higher tuition and fees, which keeps 

this cycle going. I would ask if you believe in that theory and what 

your opinions are as to why the cost of a postsecondary education 

have outstripped inflation so much over the last couple of decades. 

Do you want to start, Mr. Draeger? 

Mr. DRAEGER. It is very simple to come to the conclusion that as 

we pour more financial aid—and frustrating, as we pour more financial aid into the system, the cost of college continues to increase. But I think the first thing we have to look at is the difference between the cost of providing the education and the price 

that students and families pay. So the cost of providing education, 

if you went back over the—since the 1980s has run fairly parallel 

with inflation. But if you look at the price that students and families have been paying, it has been running more than double the 

rate of inflation. 

In such a complex environment and system, where there are so 

many different subsidies at the state level through appropriations, 

the primary driver that we have seen in tuition, or price increases, 

isn’t because the cost of providing the education has gone up so 

much. It is that state and local governments have been disinvesting 

in higher education. So whereas 40 years ago states were covering 

65 percent of the cost of higher education through a subsidy, 

through appropriations, today they are covering more around 30 to 

35 percent. 

And so the burden of paying for college has gone from the public 

pooling together at the state and local level to individual families. 

And the way they are doing it is primarily through loans. 

CEWDOCROOM with DISTILLER

76 

Mr. HECK. Anyone else care to jump in? 

Ms. ROBINSON. I would say that that is part of the picture, but 

certainly not—doesn’t explain the entire picture. It doesn’t explain 

why Duke University is $50,000 now. Private universities have 

been increasing their costs and their tuition to students at the 

same time as public universities. So I think that there is something 

going on with federal aid fueling and enabling universities to increase their tuition. The research that has been done shows that 

Pell grants are not largely a part of that. It is mostly an effect of 

student loans. 

And I think that one possible change that could be made to the 

formula determining how much aid students get for both loans and 

Pell Grants could be replacing the cost of attendance with the median cost of college. Because right now, by using the cost of attendance in a formula, a student will get more aid by attending a more 

expensive university. So that formula is helping to feed the everincreasing costs. 

Mr. HECK. Mr. Dannenberg? 

Mr. DANNENBERG. So a few quick points. First, I agree with Dr. 

Robinson that there is a big difference between grant and loan aid 

in terms of its impact on tuition inflation. There is no evidence that 

increases in Pell Grants are driving increases in tuition. Pell 

Grants have been cut in the past and tuition has still gone up. 

The main reason tuition is going up is that we have a relatively 

finite supply of providers; we have very high demand that is often 

irrational, under-informed, and, I am afraid, too often irrational; 

and you have states and institutions that take advantage of that 

high demand by cutting their own aid and shifting responsibility 

to students in the form of heightened loans. 

Justin is right that a key is to maintain, if not grow, state aid 

for higher education in order to slow the growth in public college 

tuition and fees. As I said in my testimony, we argue that there 

is ample opportunity for this committee, not to mention other committees, to target existing programs outside of Pell, consolidate 

those funds, give them to states, give them to governors, create another Tommy Thompson out there, or tell Jerry Brown or whoever 

to do—any governor out there to maintain an outcome when it 

comes to college affordability. You guys can empower them to do 

that. 

Mr. HECK. Thank you. 

Thank you, Madam Chair. I yield back. 

Chairwoman FOXX. Thank you. 

Mr. Bishop, you are recognized for five minutes. 

Mr. BISHOP. Thank you very much, Madam Chair. And thank 

you for holding this series of hearings. I think they have been very 

helpful and very informative. And I want to thank our panel of witnesses. 

I just want to pick up from the last line of questioning and answers. We have had multiple witnesses come before this committee—Republican witnesses, Democratic witnesses—to testify on 

the impact, real or imagined, of availability of federal student financial aid relative to increase in costs. And almost without fail, 

they have all testified that there is no connection between federal 

CEWDOCROOM with DISTILLER

77 

student financial aid programs and the extent to which costs are 

increasing. 

And, Mr. Draeger, what they almost all testify to is that the 

principal driver of college costs is what you just said, that is to say 

the retreat from supporting public education on the part of the 

states and local communities. So I think we have to assess Pell, we 

have to assess other Title IV programs. But we ought to assess 

them based on our actual experience. And I think to continuously 

put into the mix of our assessment what is essentially a canard— 

which is that federal student aid is driving increase in cost—is not 

helpful and doesn’t help us assess the future of these programs as 

we must. 

And I know this hearing is about the future of Pell. I want to 

focus on the current status of Pell and current law. Current law 

is that Pell will be exposed to sequestration with the next academic 

year. That could result in a cut to Pell of as much as 7 percent. 

And, Mr. Draeger, from the vantage point of your national organization, and Mr. Heath, from the vantage point of your community 

college, what impact would a 6, 7 percent reduction in Pell—some 

$2.5 billion—what impact would that have on the students, Mr. 

Heath, that you deal with every day? 

Mr. HEATH. Yes, that really is a good—it is a good question, Mr. 

Bishop. What we expect is going to happen, the student that is 

fully Pell-eligible, with a zero EFC, 7 percent reduction certainly is 

going to hurt them. It will still pay for all of their classes at Anne 

Arundel, but it will reduce the amount that they have for books. 

The more troublesome students are the ones that are getting kind 

of a little bit of Pell, kind of the mid-Pell range or right on the cusp 

of Pell. Those students will certainly increase the borrowing that 

they are going to do in order to make up for the shortfall. 

Mr. BISHOP. Okay. Thank you, Mr. Heath. 

Mr. Draeger? 

Mr. DRAEGER. It exacerbates a regressive policy of pushing lowincome students into loans. That is the best case scenario. The 

worst case is they stop out or drop out entirely. And the other issue 

with budget funding is it pushes up against deadlines where, once 

again, students and parents do not have a sure picture of how 

much they are getting in financial aid when they are trying to 

make college-going decisions this next winter and spring. 

Mr. BISHOP. Just to be clear, I just think it is important that we 

absolutely ought to focus on the future. But we can’t lose sight of 

the present. The present is that Pell is exposed to up to a 7 percent 

reduction as a result of sequestration. Over a 2-year period, if we 

don’t fix sequestration, SEOG will go down by $90 million, and College Work-Study will go down by $130 million. I would imagine 

those would be tough cuts for your students to absorb. Is that correct? 

Mr. Heath, I am sorry. 

Mr. HEATH. Yes, that is— 

Mr. BISHOP. Thank you. Another issue that this committee has 

looked at and is an idea that seems to have good—great currency 

on Capitol Hill is the idea of one grant, one loan, one work—under 

the heading of ‘‘simplification.’’ Simplification has a somewhat seCEWDOCROOM with DISTILLER

78 

ductive allure to it but, Mr. Draeger, has NASFAA taken a position 

on one grant, one loan, one work? 

Mr. DRAEGER. Institutions like the idea and simplicity of one 

grant, one loan. But they also like, and students need, the campusbased programs; the idea of work-study and— 

Mr. BISHOP. And that is my principal concern. One grant, one 

loan by definition eliminates campus-based programs. And I can 

see where it would be more simple for the individuals you represent, the financial aid officer. I think we would all agree we are 

much more interested in making it more simple for students as opposed to the financial aid officer, with all due respect. 

Mr. DRAEGER. Absolutely. And schools need the campus—the 

flexibility of the campus-based programs to help meet needs. So if 

you have a student getting full Pell, and that only meets 35 percent 

of the cost of attendance at a 4-year public, the additional input of 

campus-based aids can make up a significant difference in meeting 

the rest of the cost of attendance. 

Mr. BISHOP. Okay. 

Mr. Heath, would you concur with that? 

Mr. HEATH. Yes, I do. 

Mr. BISHOP. Okay. Thank you very much. 

Madam Chair, thank you. I yield back. 

Chairwoman FOXX. Thank you, Mr. Bishop. 

Mrs. Brooks, you are recognized for five minutes. 

Mrs. BROOKS. Thank you, Madam Chairwoman. I would like to 

just start out with you, Mr. Draeger. I am from Indiana, and I was 

pleased to see that you mentioned the Indiana 21st Century Scholar program. And as we talk about the federal government’s responsibility and the state’s responsibility, can you just expand, you 

know, for this hearing a bit more about the 21st Century Scholar 

program and the success that we have seen in Indiana for a long 

period of time? 

Mr. DRAEGER. These state programs like 21st Century Scholar, 

studies have shown that the one thing that they do very well is tell 

students and families up front that there is money available to 

them in a commitment if they meet certain criteria at the secondary level. So is it easier? The anecdote that we come down to 

from our members is, is it easier for students to say I can’t afford 

to go to college, or is it easier for them to say—just say college isn’t 

for me, or algebra or pre-calculus isn’t for me? 

And what we find is that if you make a commitment of funding 

to students and families, that they will then take rigorous studies 

at the secondary level to prepare themselves for college, not take 

remediation or have to take remedial courses and then move 

through it a good persistence and completion rate which is, ultimately, one of the things we want out of the Pell Grant program. 

Mrs. BROOKS. And that program starts at the middle school. 

That is where they are educated about what that opportunity is for 

beyond high school. And that, then, helps them set the path. Is 

that not right? 

Mr. DRAEGER. That is right. So they are informed very early, 

they are given the promise. And then the second part of that is 

they need the commitment. So it is not only telling them that it 

CEWDOCROOM with DISTILLER

79 

is available, but then actually coming through with the dollars to 

make it available. 

Mrs. BROOKS. And are any other states doing any programs like 

that that you are aware of, and what kind of success have they 

had? And I know that, you know, we have had just thousands and 

thousands of students—I think we have had over 100,000 students—participate in the 21st Century Scholar program. But that 

requires a state commitment, as well. And are any other states 

even contemplating it? 

Mr. DRAEGER. Although not identical, the other large state promise program has been the Georgia Hope scholarship. And although 

it has gone through some eligibility changes in recent years, Georgia Hope is another program that has shown that if you promise 

students early and parents early that it will change secondary 

school behavior to help prepare them for college. 

Outside of the state level, there are a lot of communities that 

also have promise programs. So going back to Michigan, there is 

a Kalamazoo Promise program and other local promise programs 

for residents in those localities. 

Mrs. BROOKS. Thank you. 

I would like to ask Mr. Heath—shifting direction a moment—I 

was at our state’s community college in Indiana, Ivy Tech Community College, and when we talked about attendance, and I find it 

interesting that Anne Arundel does take attendance, which I think 

is a novel concept for colleges as I understand. How is that they— 

the students, or the teachers, or the professors actually take attendance? 

Mr. HEATH. We had our programmers develop an online process 

for them that ties in to the rest of our student system. 

Mrs. BROOKS. And so when students come in to the actual classroom, there actually is an attendance process as they sit in the 

seat. 

Mr. HEATH. There is. 

Mrs. BROOKS. And is that some—how long has that process been 

in place? 

Mr. HEATH. Just about two years now. 

Mrs. BROOKS. Okay. And I assume that is because, as we have 

seen in a lot of colleges—that after that census cutoff date there 

actually is a period of time, isn’t there, when students would disappear? 

Mr. HEATH. Yes. 

Mrs. BROOKS. Until this attendance process. 

Mr. HEATH. Yes, that is true. 

Mrs. BROOKS. Do you think we ought to use that as an innovative way to ensure that students aren’t just taking the loan money, 

which we do know—and if you talk to students and professors they 

have seen it happen. 

Mr. HEATH. Well, we certainly have found at Anne Arundel that 

that was one of the best ways to—you know, to monitor that. When 

this subject came up two years ago, with the negotiated rulemaking 

session for—on program integrity issues, as you might imagine 

there were a large number of organizations and schools that 

pushed back against the concept. So the Department of Ed stopped 

short of mandating it. Community colleges took a look at it, not 

CEWDOCROOM with DISTILLER

80 

just Anne Arundel, and saw that it was, in fact, a good way to— 

you know, to move forward. 

Mrs. BROOKS. Do you have any idea roughly what it cost Anne 

Arundel to implement a program like that? Are there many costs 

to it? 

Mr. HEATH. No, I was never informed as to what that cost for 

programming was. I know that except for a few faculty it was very 

well received by the majority of faculty on our campus. 

Mrs. BROOKS. Any other comments from the other panelists 

about—well, I see my time is up—about the integrity issues? 

Madam Chair, I will yield back. Thank you. 

Chairwoman FOXX. Thank you, Mrs. Brooks. I think we have the 

opportunity—we can ask the panel members to submit information 

to us after the hearing on that issue. So we will be happy to look 

into that. 

Mr. Holt, you are recognized for five minutes. 

Mr. HOLT. Thank you, Madam Chair. 

Let me get a few facts straight. First, Mr. Draeger, I believe you 

have said that the current Pell grant is about a third of the cost 

of attending a public institution. Going back three-and-a-half decades, more then three-and-a-half decades, it was about—nearly 

three-quarters of the cost of attending a public institution. Is that 

correct? 

Mr. DRAEGER. Correct. 

Mr. HOLT. Mr. Dannenberg, I have here some figures for Rutgers 

University that shows that the state appropriations going to Rutgers are—is less—the dollar amount is less now than it was, well, 

20 years ago. And, in fact, over the last more than two decades it 

has gone from 65 percent of the cost being paid by the state and 

35 percent being paid out of tuition and fees to just the opposite. 

Are those figures typical of states around the country? 

Mr. DANNENBERG. That is consistent with national trends. 

Mr. HOLT. So Pell grants are more important than ever, but significantly smaller. So now let me get to the kind of the big picture 

here. Is it established that the cost to a student is the greatest determinant of attending college? Mr. Dannenberg or Mr. Draeger? 

Mr. DRAEGER. Yes, the number one reason that students cite for 

not attending or dropping out is cost, financial concerns. 

Mr. HOLT. Okay. Now, as I hear from corporate planners and 

economists, we need more, not fewer, college-educated workers in 

this country. Does any of you know any estimates by economists of 

the benefit to our economy of having half a million, one million, ten 

million more college-educated workers? Mr. Draeger? 

Mr. DRAEGER. Well, I don’t have those numbers at my fingertips. 

Economists have done that work. We would be happy to submit for 

the record. And the other point I would make is, not only have they 

cited the benefits societally and individually for people completing 

an education, but even going to some college has economic benefit 

for a community and an individual. 

Mr. HOLT. So even if there is a dropout rate that is higher than 

we would like for Pell recipients, getting them into college has benefits to you and me and our constituents. 

Mr. DRAEGER. Yes. And there is a question to be asked here. To 

be eligible for a Pell grant you have to be enrolled in the—a proCEWDOCROOM with DISTILLER

81 

gram that is leading to some sort of certificate or degree. But there 

are instances where if there are dollars lacking in workforce development or training—that some students have no intention of completing a certificate or a degree. Their intention is to take a few 

courses to be able to increase— 

Mr. HOLT. Well, I mean—you know, some of the discussion today 

has dealt toward waste and fraud and the effects of college aid on 

reducing individual initiative, and the preparation of those who receive Pell grants and particularly for those who are on the short 

end of the privilege gap. 

But I don’t want to lose the big picture here of what we are debating. It was determined nearly four decades ago that it was very 

much in the national interest to help people go to college. Just as 

it was determined several decades before that, when the GI Bill 

was passed, that it was in the national interest, in dollars and 

cents, to help people go to college. 

So my question is, are we even close to a shrinking marginal return on the number of—on the benefit we get from those people 

who will be incentivized to go to college because of Pell grants? Are 

we even close to getting a shrinking marginal return? Mr. 

Dannenberg, you looked like maybe you wanted to address that. 

Mr. DANNENBERG. The short answer is we are not even close. 

The difference in annual earnings between someone with a bachelor’s degree versus simply a high school diploma is over $20,000 

a year. That translates into $5,000 in tax payments per year. 

Mr. HOLT. So national deficit, or not, or maybe especially if we 

have a national deficit, spending money on Pell grants is a good investment for our taxpayers. Would you go that far? 

Mr. DANNENBERG. Yes, I was going to correct you and say it is 

not spending, it is an investment. You are absolutely correct. 

Mr. HOLT. Thank you. 

Chairwoman FOXX. Thank you very much. Mr. Messer, you are 

recognized for five minutes. 

Mr. MESSER. Thank you. I appreciate this opportunity. A fascinating conversation. I am going to focus at the beginning on the 

testimony of Dr. Robinson. But I think that this hearing is very important because it highlights—as you highlight in your testimony— 

the importance of now moving as a nation away from a philosophy 

towards higher education that focuses only on access and starts to 

look at success. I am a product of Pell Grants, could not have gone 

to college—graduated from Wabash College—without Pell Grants. 

Grew up in a single parent family. And understand, because I 

have lived, the importance of these degrees. But, of course, the 

world has changed a lot in the last 40 years. I would say the federal financial aid system is one of the great success stories in the 

history of the federal government. I mean, when our goal was access we have provided access to higher education for people in this 

country like never seen before. The challenge is, is that when these 

programs started 40 years ago access was enough. 

If you looked at income potential of someone who had just a little 

time in college, even one year, your income potential was higher. 

Of course, today that has changed. If you don’t graduate with a degree, and a degree that adds value to society, your income won’t 

be higher. Plenty of people are even graduating with degrees that 

CEWDOCROOM with DISTILLER

82 

make their income no higher. So we now have to move from a system that provides access alone to one that incents success so that 

we are making people’s lives better. 

Because, of course, while this has all happened costs have gone 

up, too. So people are now leaving if they don’t get a degree, most 

often with debt, too. Where you could argue that they are literally 

worse off than they had been had they not just had that access. 

What I have seen—I am a sort of a product of the education reform 

efforts in K through 12 in Indiana. And we saw our graduation 

rate, over a period of 6 years, improve by 15 percent through a series of reforms; really, a lot of hard work from teachers, principals, 

parents, students. 

But a set of reforms that gave them those tools. Chief among 

them, I found, was the measuring of graduation rate. We used to 

have, as a society—we measured—to be counted as a dropout, as 

you would all probably know, you had to enter in your senior year 

and then not—drop out during that year. We started, as a country, 

to measure from freshman to senior year. And what I found in Indiana is that, once schools saw that real graduation rate, they were 

quick to the table to bring their own innovative reforms. And we 

have made a lot of change. 

So, Dr. Robinson, if you could expand just a little. I think measuring success rates, graduation rates, of Pell grants would give us 

an opportunity to see where we are, and then develop policies that 

not look to reduce what we spend in Pell grants but look to better 

spend that money in ways that leads students to success. 

Ms. ROBINSON. Absolutely. One of my frustrations has been how 

very difficult it is to get information about the success rates of Pell 

Grant students. Federal data on that topic comes out about once 

every 10 years. And recently, in North Carolina we have seen more 

information forthcoming. The University of North Carolina system 

just published that information. And I think from that we are actually going to be able to move forward and see what works and what 

doesn’t. 

I would absolutely like to see graduation rates published so that 

we can move to focusing on how we can make sure that students 

get from that access to success. I think one way of doing that is 

requiring—right now, universities have to disclose, but they don’t 

have to report the information to IPEDS. And I think that that 

would be a necessary step so that we have the information available to the Department of Education has the information available 

to answer more of the outstanding questions about what helps Pell 

recipients become successful. 

Mr. MESSER. Yes, thank you. 

And Dr. Heath, my next question. I was very intrigued by your 

comments about the need to increase flexibility for non-traditional 

students. If I were to make another observation in what has 

changed in 40 years is, you know, we have a system very focused 

on the sort of four homecomings, kids showing up, 18-year-olds 

with a backpack. That is not many of our students in today’s world. 

Could you talk a little bit more—expand on your discussion of providing flexibility for non-traditional students? 

Mr. HEATH. Well, as, you know, it has been already noted here, 

the non-traditional student, or contemporary student, if you will, 

CEWDOCROOM with DISTILLER

83 

75 percent of students now are going part-time. So while many of 

us think that limiting the months of Pell or semesters of Pell that 

a student could get was really a good move, within that we now 

are seeing that part-time student actually getting hurt because 

their eligibility is being used up quicker because they really should 

only be taking nine credits. It is not good for a student to take 11 

credits when they really should only be taking nine. Because their 

schedule, you know, is such that their time commitments require 

more family time, more work time. 

So we don’t want to see them using up that lifetime eligibility 

quicker than what they really should be. So that is one of the 

things that we are concerned about. 

Mr. MESSER. Okay, thank you. 

Madam Chairman, I yield back. 

Chairwoman FOXX. Thank you very much. 

Ms. Bonamici, you are recognized for five minutes. 

Ms. BONAMICI. Thank you very much, Madam Chairwoman and 

Ranking Member for holding this hearing today, and the important 

tool for increasing college access and Pell Grants. And I, like many 

others on the committee, worked my way through community college, college and law school with a combination of grants, loans and 

work-study. So I truly appreciate the importance of what we are 

discussing today, and believe that every student should have that 

access regardless of his or her socioeconomic status. 

And Pell grants were really founded as the basis of our federal 

financial aid system. So this is, again, an important topic we are 

talking about. I want to go back to the discussion about the disinvestment by states in higher education. My alma mater, University of Oregon, now gets about 5 percent of its funding from the 

state. So I am going to ask Mr. Dannenberg, I agree with your concerns about that, the issue of state funding. And how has that specifically affected students’ reliance on the Pell program? I understand that it affects reliance on the need for more financial aid, but 

on Pell particularly. 

Mr. DANNENBERG. It has obviously had a tremendous effect on 

students’ reliance on the Pell Grant program, making Pell more essential than ever when it comes to low-income student access. I 

think the other thing to keep in mind is that when states cut back 

funding for individual institutions the individual institutions then 

change the nature of their aid to students. They start emphasizing 

non-need-based aid instead of need-based aid in order to try and 

attract in students who are able to pay at least something. 

So Pell faces a double hit. First, it is more important because 

states are pulling back from institutions and therefore tuition is 

going up. And second, the institutions are also responding by shifting from need-based aid to non-need-based aid. 

Ms. BONAMICI. Thank you. I also really think we need some innovative thinking. Oregon, of course, is studying the Pay Forward, 

Pay Back program. I am really interested in seeing what happens 

with that study. And, Mr. Draeger, you talked about the Pell Promise. How would such a program be implemented successfully, and 

what support would be needed from the federal government if we 

were to do something like that at the federal level? 

CEWDOCROOM with DISTILLER

84 

Mr. DRAEGER. The benefits of the Pell Promise we have talked 

about, from the federal level I think very little would need to 

change except that it could be modeled on something like we do 

with Social Security today, where you are given a statement along 

the way letting you know how much money would be available to 

you—that piece of knowledge, then, supposedly is empowering people to hopefully make wise decisions during their career for retirement—something similar in higher education. 

So that based on the fact that somebody is already taking, utilizing, some state or federal means-tested benefit, we know they 

are low-income—and longitudinal 5-year study that NASFAA conducted, which is included in my written remarks, showed that for 

our neediest students their income levels don’t change greatly from 

middle school to high school to college. 

If you are poor, unfortunately odds are you are going to continue 

to be poor when you go into college. We could identify them early, 

notify them early and, hopefully, effectuate positive outcomes in 

secondary school. 

Ms. BONAMICI. That is great. Thank you. 

Dr. Robinson, in your testimony you mentioned that it is your belief that only ‘‘very low-income students,’’ and that was your phrase 

in your testimony, should receive Pell grants. So if, in fact, the proposals that you suggest were in effect, then more students—what 

would they do? Drop out, or not start college, or take on more loan 

debt? What would happen to all the students who are currently eligible who wouldn’t be eligible under your proposals? 

Ms. ROBINSON. Those students would do a combination of things 

in order to achieve some kind of higher education. Some of them 

might choose less costly institutions, some of them might in fact 

take out loans. But the reason behind that proposal is that the limited research that is available shows that for those students they 

actually respond better to loans than they do to grants that they 

do not have to pay back. 

Ms. BONAMICI. And I wanted to follow up on that because you 

did have—you mentioned limited research. Do you know how many 

students were studied in that particular study? Because that was 

intriguing, when you said that, actually, middle-income students 

don’t benefit from Pell grants. I found that quite surprising. 

Ms. ROBINSON. I will have to go back and look at that for you. 

I don’t have the figure offhand. 

Ms. BONAMICI. Thank you. 

And, Mr. Dannenberg, do you have thoughts on what would happen if, in fact, we limited Pell grants to very low-income students, 

and more students would have to rely on loans? 

Mr. DANNENBERG. Yes. First of all, it is important to keep in 

mind that community colleges are like the great secret of the 

American higher education system. Over 40 percent of all students 

are going to community colleges. So the idea that students are 

going to go to less expensive colleges, when they are already going 

to very inexpensive colleges, flies in the face of the data. What is 

going to happen is students will drop out. They will go from fulltime status to part-time status. And if they do go from full-time 

status to part-time status they will be much, much, much less likely to complete. 

CEWDOCROOM with DISTILLER

85 

Ms. BONAMICI. All right, thank you. And I see my time has expired. 

Thank you. 

Chairwoman FOXX. Thank you. 

Mr. Thompson, you are recognized for five minutes. 

Mr. THOMPSON. Madam Chair, thanks for hosting this hearing. 

And to the witnesses, thank you for bringing your expertise here. 

Obviously, you know, probably even 10 years ago talking about, 

you know, the typical student has changed, I think, dramatically. 

And I think it will continue to evolve, where I know when I went 

to college, my cohort, we were largely—it was 18-to 22-year-olds, 

something like that, that was on campus and pursuing an education. 

But then today it is determining how do we make these programs flexible enough to meet people’s educational needs at every 

point in their lifetime, because it is not where you start, it is where 

you end up. And the key to that success is education. So it is—we 

need a dynamic program, there is no doubt about that. I wanted 

to come back to a couple points in the testimony, start with Mr. 

Heath. What percentage of students at your community college 

and/or nationally require remedial education? 

Mr. HEATH. I don’t have that number readily available. I do 

know that I have been told that it is a relatively high number. But 

in context, some of those students are testing into remedial math. 

And one of the reasons is that they were really good students in 

high school, and by the time they got to grade 10 or 11 they had 

taken all the math required and so they were taking nothing in 

grade 12. And when they went to do the testing they were showing 

that they needed a developmental class in order to take collegelevel algebra. So there is some context there, but it is a fairly high 

number. 

Mr. THOMPSON. Yes. I just spent some time in southern Arizona 

at a—actually, a military installation, talking with the officers in 

charge of the educational system there. And they are training soldiers and officers. And remediation is a big part of what they do 

there, as well. So it is across the board. Any idea of how much of 

the Pell fund that we use for remediation at this point? 

Mr. HEATH. No, but we do know that students can take up to 30 

credits of, or the equivalent of, remedial courses, and Pell grants 

will pay for it. But normally, students are stopping out far short 

of that because they just are not able to continue and to pass the 

courses. 

Mr. THOMPSON. Mr. Draeger, you look like you had your hand on 

the buzzer. 

Mr. DRAEGER. About one in three college students today are taking remediation nationally; 50 percent of students at community 

colleges are remediating and just about a third, or around 20 to 30 

percent, in 4-year schools. Pell Grants cannot be used solely for remediation. So they can take remedial course work if it is integrated 

into a program. And as Rich pointed out, there is a cap on how 

much remedial education can be taken through the Pell Grant. So 

while it may be a—not an insignificant dollar amount, it is not unlimited, by any means. 

CEWDOCROOM with DISTILLER

86 

Mr. THOMPSON. Okay. Dr. Robinson, your testimony talks about 

shifting the definition of full-time student from 12 to 15 credits as 

an option to encourage college completion. And the benefits there 

are kind of obvious. Obviously of reducing the overall role of debt 

in terms of get a—to earn your return on investment sooner with 

your education degree. It is not the degree that is of value, it is 

the return on investment that comes from it. 

Just thoughts on what impact that—would this have, given on 

non-traditional students, kind of reflected on where I see, obviously, our educational system needs to be: them being more flexible 

at different parts throughout a person’s lifetime or on, specifically, 

Pell-eligible students. 

Ms. ROBINSON. I think the significant impact comes in looking at 

how you go from that 15-hour point. And I think the way that you 

prorate for hours after that makes a big difference. I think Mr. 

Dannenberg mentioned that you pay the same for nine and 11. I 

think the prorating on that should actually be the 11 and nine, 10; 

all of those are prorated as a percentage. So students are using the 

money as they are taking courses, and not having to pay for time 

they are not taking. 

And I think it also should be coupled with the Pell Well concept 

so students can go over summer. The main point in going from 12 

to 15 is that if someone is currently full-time at 12 hours, that person would be much better off to be 12—full-time at 15. So that 

they, as you said, don’t have debt, or don’t have six years of debt 

or five years of debt when they do come out. 

Mr. THOMPSON. And my last is actually just a request of all the 

panelists. Anyway, the key part to this is developing financial literacy among students and parents so that they are choosing paths 

with a return on investment. That they have that in the end. So 

I would just ask if you could submit to the committee any thoughts 

or any recommended research that you have seen on how do we increase financial literacy among probably most specifically that traditional—what has been—I don’t think it is traditional anymore, 

but that post-high school, postsecondary into college. That would be 

very helpful. Thank you. 

Thank you, Chairwoman. 

Chairwoman FOXX. Thank you, Mr. Thompson. 

Mrs. Davis, you are recognized for five minutes. 

Mrs. DAVIS. Thank you, Madam Chair. And thank you to all of 

you for being here. I certainly feel like a great example of someone 

who went to UC system far too many years ago. When I talk to students and tell them what I paid for—it wasn’t even considered tuition then, basically—they are shocked by that. And it is a shift of 

75 percent help essentially to students versus today less than 25. 

And so that is why many, many students do have to look for other 

sources of income. 

I wanted to ask you, Dr. Robinson, a little bit—your comment. 

And I know that my colleague asked earlier. But I wasn’t sure 

what you base the claim that Pell grants to moderate—you said 

middle class students, I think, $30 to 45,000 or so. I was not sure 

that that is always middle class in everybody’s mind. But whether 

they are less likely to graduate. So what is the causal relationship 

there? 

CEWDOCROOM with DISTILLER

87 

Ms. ROBINSON. Sorry. It is based on the beginning longitudinal 

study that the federal government puts out. And it appears that 

the causal relationship is that in that income group they are more 

responsive to money that they will have to pay back. The knowledge that they have a loan that they will have to pay back at the 

end makes them more likely to graduate. The authors of the study 

are— 

Mrs. DAVIS. For students who— 

Ms. ROBINSON. For those who have $5,000 to $50,000 range. The 

authors of the study only speculate on causation. They note that 

this is research that really can’t establish a causal pattern, only a 

relationship. But that is what they found, based on their research. 

Mrs. DAVIS. I wonder if anybody else would like to comment, Mr. 

Dannenberg? How does that stack up? 

Mr. DANNENBERG. I think one of the most interesting pieces of 

research out there on the effect of need-based aid on low-income 

students was done by Sara Goldrick-Rab and a series of others 

published by the National Bureau of Economic Research. They ran 

a control study, which is very rare. Basically, they looked at Pell 

students who were getting a supplemental need-based aid program 

through—in Wisconsin, and those who were not. And what they 

found was that for a thousand dollars in additional need-based aid 

to Pell students those students were going to return for a second 

year of study at a rate of 3 to 4—a little over 4 percent higher. So 

the point is that increased investment increases the likelihood of 

retention and, therefore, progression-completion. 

Mrs. DAVIS. Is there is a sense, too, that the community is counting on those students in some way? I mean, does the fact that students feel perhaps that it is a little more accessible and more valued that they have a contribution to make to give back? 

Mr. DANNENBERG. I think that is especially true with the promise programs that Justin was referencing. But since I am giving 

him applause, I also want to criticize the idea that we can just give 

students in eighth grade a statement of how much financial aid 

they will get, and that that will drive them to school. It is not 

enough. Americans overestimate the cost of higher education. 

What Indiana does is much better. So what Indiana does is provide a guarantee that you can go to school debt-free or tuition feefree. A number isn’t enough. It needs to be a concept. 

Mrs. DAVIS. Okay. One of the things that you mentioned earlier 

was that rather than targeting the students, that you target the 

schools in terms of making some of the changes that need to be 

done. And also, there are loans outside of Pell that we need to deal 

with. Could you be a little more expansive about that, and are 

there some ideas out there now that are really out of the box thinking that we are not—people talk about, but we are not quite willing 

to move forward on? 

Mr. DANNENBERG. Yes. First of all, you are absolutely right with 

respect to institutions. And I think that has been a big area we 

have neglected as witnesses: the importance of institutional role. 

Not just when it comes to financial aid and increased need-based 

aid versus non-need-based aid at the institution. But what an institution does makes a tremendous amount of difference when it 

CEWDOCROOM with DISTILLER

88 

comes to completion. We see similar institutions with a similar student body that get dramatically different results. 

So one of the outside of the box ideas is that in any effort to provide funds to the states, the states try and hold institutions accountable for their performance with low-income students in terms 

of increased completion. San Diego State is one of the better 

schools in the country, as a matter of fact, when it comes to completion among low-income, under-represented minority students as 

compared to their peer institutions. 

Mrs. DAVIS. Yes. And a lot of that is based on the number of support systems that are built in, and using mentors and a whole host 

of other community organizations. I appreciate that. 

Thank you very much. 

Chairwoman FOXX. Thank you very much. 

Ms. Wilson, you are recognized for five minutes. 

Ms. WILSON of Florida. Thank you, Madam Chair, for holding 

this hearing today. The federal Pell Grant program is a lifeline for 

more than 9 million students every year. The program can make 

the difference between a life of poverty and a good, meaningful 

middle class career. The Pell Grant program is also a lifeline for 

America’s economy. For African-American and Latino students, 

education is the only—the only—stepping stone out of poverty. 

There are very few dollars to inherit from the family trust. There 

are very few African-Americans and Latinos that can save enough 

to send their children to college. So the Pell grant is key. 

We need more students to undertake higher education in order 

to close the skill gap and boost productivity. But so many families 

are struggling to cover rising cost. While some exaggerate the funding gap with regard to Pell, the fact is that the program has been 

cut by more than $50 billion and is projected to remain stable. It 

is very important to note that 40 percent of the growth in Pell 

Grant costs since 2009 has been due to the increased number of 

Pell-eligible students in this period of high unemployment, not due 

to policy changes. 

What this says to me is simple. We can reduce the cost of the 

Pell Grant program by getting Americans working again. Once we 

get Americans working again, we will have fewer enrollees with 

fewer families requiring assistance. So this Congress has to turn 

back to its regular focus on jobs. Now, I have a few questions for 

all of our witnesses. 

While there is a great deal of focus on completion pressure and 

non-traditional school year models, taking classes in the summer 

months is often impossible for low-income students who support 

themselves and other family members. What is a reasonable number of semesters for which someone should be eligible for Pell, taking into consideration the factors that impact low-income students, 

especially Latinos and African-Americans? 

Mr. DRAEGER. So from our perspective, the aggregate limit may 

not be off. Six years of full-time eligibility may not be the wrong 

number. What we would advocate for is more flexibility that students, so students could enroll on an ongoing basis. So instead of 

reaching a summer term, or semester, and saying I have no more 

Pell Grant eligibility, and I am going to stop out, which then increases the likelihood of them not returning, that they could conCEWDOCROOM with DISTILLER

89 

tinue to stay continuously enrolled by providing them, again, a well 

of Pell funds. 

Mr. DANNENBERG. There has been a lot of talk about the contemporary student, which I think is a good term as well. The contemporary bachelor’s degree recipient gets their degree in five years, 

not four. So when we talk about 150 percent of time, six years, that 

is 150 percent of time working off of an old, antiquated calendar 

of four years to a bachelor’s degree. It is now five years to a bachelor’s degree, so I think we need to ask ourselves whether we 

should be pulling back even further on the amount of eligibility 

that students have for Pell in terms of time or dollars. 

Ms. WILSON of Florida. Okay. We have talked a lot about this investment from the states. I would like to find out what you think 

can be done to ensure that this investment in higher education 

funding on the state level does not continue to erode the purchasing power of the Pell grant. What can be done to help with 

that? 

Mr. DANNENBERG. I am looking at Congressman— 

Ms. WILSON of Florida. Okay. 

Mr. DANNENBERG. I am looking at Congressman Tierney because 

he is the champion of a maintenance-effort provision that appeared 

in the College Access Challenge Grant, which is a small grant program. There was also a maintenance-effort provision that appeared 

in the American Recovery and Reinvestment Act for Higher Education Funding. And states were responsive, particularly to the 

AARA maintenance-effort provision, because there is such a substantial amount of funding. That is the problem with CACG is that 

it is too small. 

What can be done? The feds can provide a substantial amount 

of funds to states and institutions in order to leverage increased 

support for higher education, either in terms of maintaining state 

investment or push on the institutions to keep costs down. And you 

can do that by targeting funds outside of the Pell Grant program, 

outside of unsubsidized loans. 

Ms. WILSON of Florida. Anyone else? Any incentive idea to 

incentivize states to invest more in their colleges? 

Dr. Robinson, you said that—I would like for you to elaborate 

further on the limited studies that show that some low-income students respond better to loans than to grants. What, in your experience and research, have you found to be the impacts of higher debt 

burdens on persons’ purchasing power, well-being and lifetime career prospects? 

Chairwoman FOXX. Ms. Wilson, I am going to ask Dr. Robinson 

if she would submit her response to you in writing— 

Ms. WILSON of Florida. Oh, I am out of time. 

Chairwoman FOXX. Since you are out of time. And I would commend to you the study that Dr. Robinson has offered, entitled ‘‘Pell 

Grants—Where Does All The Money Go?’’ You may—I am sure she 

will make available to you a copy of that. And it has a great bibliography in it, too. 

Mr. Tierney, you are recognized for five minutes. 

Mr. TIERNEY. Thank you very much. 

Mr. Dannenberg, let me start off where you were talking earlier. 

Because we did have a go at trying to put a maintenance of effort 

CEWDOCROOM with DISTILLER

90 

provision into the Higher Education Opportunity Act and the stimulus on that, with some effect from all the reports that we have out 

there. But you are right, the CACG is very, very small as a setoff on that, and we had quite a fight just to get that. It was difficult to identify something that would be meaningful to put at risk 

for schools to not maintain their effort. 

So when I look at your comment in here about the Education 

Trust having 10 offsets to finance a flexible state and institutional 

fund for needy students to be given some sort of guarantee, can you 

explain a little bit more? Maybe use an example of what of any of 

those 10 ideas were, and how that would work? 

Mr. DANNENBERG. Sure. We have identified grants, loans and tax 

benefits that could be reduced. Let me start with the low-hanging 

fruit: tax benefits. The Hope Scholarship Tax Credit used to limit 

out at $120,000 in family income. That is 80th income percentile 

nationally. The Obama administration, which I worked in, expanded the higher education tax benefits markedly. And I think 

that has been a laudable accomplishment. 

But it also increased the income level at which people can get an 

American Opportunity tax credit, formerly Hope, all the way up to 

$180,000. So we went from the 80th percentile to the 95th percentile. You know, why are providing tax benefits—and that is 

some $7 billion a year—to folks who are in the top income quintile? 

Why is it that Mitt Romney can get a 520—I have three 529s. But 

why can Mitt Romney get a 529 which has all kinds of tax benefits 

attached to it, when we have students who are in desperate need 

of Pell grants? So those are two on the tax side. But I think there 

are others in this committee’s jurisdiction. 

Mr. TIERNEY. So you have to find some way to get that money 

back to education as opposed to the general treasury. So if we can 

work on that. All right, that is an interesting concept, but we may 

follow up with you if you have no objection on that, to look at some 

of those other areas. 

The other is, you know, the financial incentives to borrowers and 

owners that have FFEL loans to get them to convert their debt to 

a direct loan on that basis. Have you worked out the specifics as 

to how you think that program would work? 

Mr. DANNENBERG. Actually, the Department of Education had 

administered a small similar program that allowed borrowers who 

had both FFEL loans and direct loans to combine them and consolidate them into the direct loan program, and gave them a lower interest rate in doing so. What I am suggesting is, essentially, that 

effort much, much more aggressively implemented by the secretary. 

Where he went to students who have existing FFEL loans now, 

sizeable amounts, and said, ‘‘Look, pay—consolidate into the direct 

loan program. We will cut your interest rate, we will give you cash 

back, we will lower your principal. And you, the student, will benefit and us, the taxpayer—the federal government—will benefit because we won’t be paying out as much in subsidies on these old 

loans.’’ Frankly, which a lot of providers would like to get off their 

books because they no longer have the same incoming stream of 

new federal family education loans. 

Mr. TIERNEY. Thank you on that. 

CEWDOCROOM with DISTILLER

91 

And lastly, one of you mentioned at one point, and I will defer 

to your memories on that, the cost of books for students. Mr. Hinojosa and Mr. Miller and I recently filed some legislation trying to 

get the textbook materials more accessible to students through online provisions and otherwise that would reduce the cost. Does anybody want to speak to the impact on students for what is now a 

pretty high cost of textbooks? 

Mr. HEATH. Yes. The cost of the textbooks definitely has, you 

know, increased over the last number of years. It keeps going up 

every year. Most institutions that I am familiar with have a variety 

of ways that students can get those books. We implemented a process a couple of years ago where they can actually rent the textbooks. So we always have a buy-back provision so they can bring 

the textbooks back. When they are done at the end of the semester, 

we buy them back. They can rent them. 

They also have the opportunity, of course, to, you know, purchase 

their textbooks online from a—you know, non-college provider. The 

problem that we have right now that we haven’t been able to solve 

is for those community college students that want to buy their 

books electronically and actually providing them money up front so 

that they can get those textbooks electronically. And we have resisted doing that because we found historically when we provided 

money up front—that is, before the class is actually started—students took the money and didn’t show up for class. 

So trying to balance that—you know, that issue, you know, is an 

ongoing problem for us. 

Mr. TIERNEY. Thank you. 

I yield back. 

Chairwoman FOXX. Thank you, Mr. Tierney. I now yield myself 

five minutes. 

Dr. Robinson, taxpayers deserve to know if their hard-earned 

money is being spent appropriately by the federal government. 

Your testimony talks about the lack of data points to show how 

Pell Grant students are faring in college. And we have talked a lot 

about this issue. Several members have raised questions. But could 

you share with us what specific data points should be added into 

the law during the upcoming reauthorization to help provide us 

with better information on how Pell Grant students are doing? 

Ms. ROBINSON. I think the first fix is to enforce what was already 

started in 2008 with the higher education reauthorization. Go from 

disclosure of Pell Grant graduation rates at the institutional level 

to actually requiring that to be reported to IPEDS. Disclosure is 

only minimally useful if it becomes difficult for researchers and for 

the Department of Education to get data on a wide-scale basis. And 

it is that wide-scale data that we need in order to do any kind of 

methodological look at how Pell students are doing. 

Secondly, I think that the beginning postsecondary education longitudinal data are extremely important. I think it would be very 

nice if that could be done more often. Right now, we are still looking at data that begins in 2003–2004. And from what I can tell, we 

can’t expect any new data for quite some time. Seeing that data 

maybe every five years would be considerably more helpful than 

the rate at which we see it right now. Because it is that longitudinal data that tracks students over time that allows us to see 

CEWDOCROOM with DISTILLER

92 

what happens from the moment a student enters to where they are 

four, five, six or 10 years later. 

And I think most importantly, that data must be transparent. 

The Department of Education obviously needs to be able to look at 

the data. But outside organizations, from NASFAA to the Pope 

Center, to individual institutions and schools of education, can add 

a lot of insight to the arguments about Pell if they have access to 

meaningful data. 

Chairwoman FOXX. Thank you very much. 

Mr. Draeger, can the reforms you talk about in your testimony— 

Pell Promise, Pell Well and Super Pell—be implemented without 

dramatically increasing the cost of the program? How can we ensure that the program does not continue to grow at the rates we 

have seen over the past five or six years? 

Mr. DRAEGER. We have already seen the cost of the Pell Grant 

program leveling out. And so partly because of a partial, or slow, 

recovery and partially because Congress has rolled back some of 

the eligibility criteria that it had originally implemented five, six, 

seven years ago. And in my written remarks I have included an appendix of those eligibility changes. The reforms that we have put 

forward we don’t believe, over a five or 10-year period of time, 

would cost dramatically more, because Congress has already put in 

place limitations on the full extent to which students can utilize a 

Pell Grant. 

And what we are talking about is now making that Pell Grant 

information available to students much earlier, and giving them 

more flexibility so that that contemporary student can use them for 

an innovative—in an innovative learning model program, a competency-based program, or on an ongoing basis until they have exhausted eligibility. 

Chairwoman FOXX. Thank you very much. 

Mr. Heath, how can the federal government assist institutions in 

preventing fraud, while easing the burden on financial aid offices? 

Mr. HEATH. Well, I think that they can continue to do what they 

started to do about 18 months ago when this was becoming more 

of a problem nationwide. The follow up with the students that 

show up on our records when they come in is extensive. But what 

we have found in that follow up is that many of those students 

were not really legitimate students. That is, the transcripts that 

came in from other colleges, when they finally turned them in, 

showed little or no academic progress whatsoever. 

So they can continue to do what they put into place, but certainly 

require every college that has large numbers of students that are 

moving from school to school to make sure that those records that 

they get in have been thoroughly reviewed. And those that are not 

progressing academically when they are changing schools, that the 

eligibility for financial aid simply is not there coming through the 

door. That is, they would have to come in and establish their own 

academic record at that college. 

Chairwoman FOXX. Thank you very much. 

I want to thank all of our witnesses here today. You are a distinguished panel, and we very much appreciate your taking the time 

to appear before the subcommittee today. And you have given us 

CEWDOCROOM with DISTILLER

93 

a lot to think about, a lot to read. Your testimony is pretty expansive, the written testimony. There is a lot to read and to consider. 

Mr. Tierney, do you have some closing remarks? 

Mr. TIERNEY. Well, I do, Madam Chairwoman. On behalf of the 

ranking member, I just also—and the other members of the panel, 

I want to thank you for your efforts here today, for the work that 

you prepared in advance and your testimony. And I suspect, your 

availability in an ongoing basis to help us sort of formulate some 

policies on that. The ranking member and the other members want 

to let you know that we want to strengthen the Pell Grant program. 

We want to continue to expand affordability and accessibility to 

college. And hopefully, both sides of the aisle will work towards 

strengthening the Pell Grant program and that affordability and 

make it a top priority for Congress. So with your efforts and your 

help we will be able to move in that direction. And thank everyone 

for their work on this hearing. 

Chairwoman FOXX. Thank you, Mr. Tierney. 

Most of my colleagues have made comments about having come 

from low-income families, worked their way through college, some 

of them utilizing the Pell Grant. I think any of us who have been 

involved in higher education understand the value of the Pell 

Grant program. I will one-up my friends a little bit by saying not 

only did I come from an extremely low-income family—I worked my 

way through school—but I worked with students who received Pell 

Grants. I was around in 1972, when the BEOG program started, 

and I remember it very well. 

I was working with Upward Bound students and low-income students at Appalachian State University. I ran a special services program and a program for disadvantaged Appalachian and AfricanAmerican students. So I am very well aware of the value of financial aid, and particularly the Pell Grant program. So I know we all 

want to strengthen the program so that it is available to the truly 

needy students. Because there are students out there who need it, 

and there are students who can benefit from the program, and who 

can benefit our culture as a result of attending higher education. 

We want to utilize these hearings to highlight the problems or 

concerns that exist, and figure out ways we can update the federal 

laws to ensure they are keeping up with how our universities are 

educating students. So today, I have noticed a plethora of dueling 

statistics—maybe more than usual—in our comments. So I want us 

to keep in mind how we utilize statistics to define the problems 

that exist. 

Several of you have discussed how the buying power of Pell 

Grants has decreased significantly over time. Yet according to figures calculated by the Congressional Research Service, the Pell 

Grant covers approximately 72 percent of the published in-state 

tuition and fees at 4-year public institutions. 

We know that it covers more than enough of the cost of fees and 

tuition at community colleges. I think we can all find statistics to 

help us define our arguments and our points. We just need to make 

sure that we understand the context in which the statistics are 

being used. And I think as we go through with further hearings 

and looking at these programs, we will do our best to make sure 

CEWDOCROOM with DISTILLER

94 

that we have data. And I think all of you, especially Dr. Robinson, 

has pointed out the need for us to get reliable information. And 

that is something I am very much interested in, and I think all of 

us are, again, so that we can make sure the truly needy students 

are getting the help they need. 

So again I thank everyone for being here, my colleagues on both 

sides of the aisle. And there being no further business, the hearing 

is adjourned. 

[Additional submission of Mr. Hinjosa follows:] 

Prepared Statement of the American Indian Higher Education Consortium 

On behalf of the nation’s 37 Tribal Colleges and Universities (TCUs), which collectively are the American Indian Higher Education Consortium (AIHEC), we write to 

commend the Subcommittee for examining ways to strengthen the Pell Grant Program and appreciate the opportunity to share the perspectives of the TCUs and the 

students they serve. 

TCUs are open enrollment institutions that were created in response to the higher 

education needs of American Indians/Alaska Natives and generally serve very low 

income, geographically isolated populations that have no other means to access education beyond the high school level. TCUs have become increasingly important to 

educational opportunity for Native students offering high quality, culturally relevant higher education opportunities to encourage American Indians/Alaska Natives 

to overcome the barriers they face to higher education. 

The importance of Pell Grants to TCUs and TCU students simply cannot be overstated—More than three quarters of TCU students receive Pell Grants. At $100 per 

credit hour, tuition rates at TCUs are among the lowest in the nation, but the cost 

of attending any college is not ‘‘affordable’’ to students with average annual incomes 

of less than $18,000 without meaningful and stable federal assistance. 

Pell Grants are the bedrock of the student aid programs and must provide a stable source of funding for low-income students. The maximum Pell Grant has increased in recent years, but various shortfalls, budget debates, proposed and impending cuts to the program would prevent it from being described as ‘‘stable’’ for 

TCUs students that rely on this funding to pursue higher education goals. Protecting Pell from ongoing Congressional budget debates and offering measures of 

certainty in funding would help Native students realize their postsecondary education aspirations. 

At this hearing and others from the ‘‘Keeping College within Reach’’ series, the 

Subcommittee has heard numerous proposals to simplify the financial aid process 

and make selecting and paying for postsecondary education more consumer friendly. 

TCUs are leaders in promoting accessible postsecondary options for American Indians/Alaska Natives and would welcome new policies and programs designed to increase awareness of higher education and financial aid opportunities. However, 

AIHEC member institutions are also concerned about unintended or unforeseen 

consequences of major changes to the student aid programs. As the Committee further develops proposals to reform the Title IV programs, we ask that you be mindful 

of the potential impact of policy changes to TCUs and seek the counsel of TCUs, 

through AIHEC, to ensure federal programs are leveraged to the maximum benefit 

of Indian Country. 

Remediation & ‘‘Contemporary Students’’ at TCUs 

Chairwoman Foxx and others on the Subcommittee have commented on the need 

to replace the term ‘‘non-traditional student,’’ noting these students are now the 

norm in higher education and suggesting the term ‘‘contemporary student’’ may be 

more appropriate. TCUs commend the Subcommittee for this realization. However, 

if designed improperly or without adequate review, proposals aimed at reducing 

spending on Pell Grants and bringing further accountability to recipients could result in greatly reduced postsecondary educational opportunities available to ‘contemporary’ students. For example, at a time when the nation is focused on increasing 

not just access but completion rates for America’s college students, a recent budget 

agreement immediately reduced Pell Grant eligibility from 18 to 12 semesters, with 

no phase-in or grandfathering component for current recipients. This resulted in 

some students finding themselves ineligible for further Pell Grants and therefore 

unable to complete their degree programs. Though 12 semesters of eligibility may 

seem sufficient for so-called traditional students, this limit can be highly restrictive 

for students who need remediation. 

CEWDOCROOM with DISTILLER

95 

A recent survey of placement test results at TCUs indicate that 64 percent of incoming students required remedial math, 78 percent required remedial writing, and 

60 percent required remedial reading. Though student aid funds cannot be used exclusively for remediation coursework, they can be used for remedial work on the 

path toward a degree and can require as much as one full year of a student’s Title 

IV eligibility. The federal government should recognize that effective, well-funded 

remediation programs are essential to improving higher education access and success rates among low-income students and provide extended eligibility for students 

completing these courses as part of a degree or certificate program. Restricting eligibility for remedial or developmental courses is no way to recognize contemporary 

students. 

‘‘Sometimes, our students come in unprepared for college work. They use up quite 

a bit of their Pell [Grant eligibility] taking developmental courses, so we might encourage them to transfer without a degree so they’ll still have some of their Pell 

[Grant] for attending the four-year college,’’ said David Yarlott, President of Little 

Big Horn College, Crow Agency, MT. ‘‘We’d like to have those increased degree 

(completion) numbers, but we have to think of our students’ needs first.’’ 

As Congress considers HEA reauthorization and the Administration’s efforts to 

rate colleges, the Committee should be mindful of limitations on certain program 

measures such as graduation rates. Though program accountability is critical, it is 

incredibly important that federal policy not punish colleges and universities for 

‘‘thinking of our students’ needs first.’’ 

Summer Pell 

Pell Grant eligibility for more than two semesters of coursework, or ‘‘summer 

Pell,’’ was another casualty of a recent budget debate. For three years this change 

in policy appeared to be working as summer enrollments were up at TCUs, community colleges, four-year colleges and universities, and even for-profit institutions. 

The elimination of summer Pell has and will continue to restrict the opportunities 

available to contemporary students. 

In a cruel irony, the loss of summer Pell will have less of an impact at some TCUs 

due to sequestration. Faced with significant cuts in federal funding, many TCUs had 

to eliminate summer programs this year. For instance, Sitting Bull College, located 

on the Standing Rock Sioux reservation in North Dakota and South Dakota had to 

address a cut of nearly $1 million, which forced the college to close its doors this 

past summer. The campus closure not only prevented the offering of college courses, 

it also eliminated programs for high school and middle school students, which of 

course meant the elimination of several months of income for many of those that 

are employed at the college. 

Additional Information on Tribal Colleges and Universities 

TCUs are public institutions of higher education chartered by their respective 

tribal governments, including the ten tribes within the largest reservations in the 

United States. They operate more than 75 campuses in 15 states—virtually covering 

Indian Country—and serve students from well more than 250 federally recognized 

Indian tribes. TCUs vary in enrollment (size), focus (liberal arts, sciences, workforce 

development/training), location (woodlands, desert, frozen tundra, rural/isolated reservation, urban), and student population (primarily American Indian). However, 

tribal identity is the core of every TCU and they share a common mission of tribal 

self-determination and service to their respective community. 

These academically rigorous, culturally appropriate institutions engage in partnerships with federal agencies and other universities nationwide to support research 

and education programs that focus on issues such as sustainable agriculture, water 

quality, climate change, wildlife population dynamics, behavioral health, and diabetes control and prevention. The majority of faculty, teaching staff, and administrators hold a master’s or doctoral degree. Dedicated faculty and staff often serve double-duty as counselors and mentors in addition to their teaching and administrative 

roles. 

TCUs provide many services to help students stay in school and complete their 

studies, such as personal and career counseling, mentoring, tutoring, wellness programs, child care, lending of laptop, and transportation and housing assistance. 

Many support distance learning involving state-of-the-art learning environments. 

Community members often take advantage of the TCU libraries and computer labs, 

as well as a range of community service programs, such as business incubators and 

health and wellness events and workshops. 

Tribal Colleges and Universities are providing access to high quality higher education opportunities to many thousands of American Indians/Alaska Natives and 

non-native students, as well as essential community services and programs to many 

CEWDOCROOM with DISTILLER

96 

more. Keeping the Pell Grant program vital and strong is vital to the continued 

postsecondary success in Indian Country. 

For additional information on TCUs, we recommend Subcommittee members and 

their staff review The AIHEC AIMS Fact Book as it provides an in-depth profile 

of TCUs and the students they serve. It is included with this statement as an appendix. The report is available online: http://www.aihec.org/resources/documents/ 

AIHEC-AIMSreport—May2012.pdf 

[Whereupon, at 12:01 p.m., the subcommittee was adjourned.] 

Æ 

CEWDOCROOM with DISTILLER