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KEEPING COLLEGE WITHIN REACH: 

SIMPLIFYING FEDERAL STUDENT AID 

HEARING 

BEFORE THE

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, NOVEMBER 13, 2013 

Serial No. 113–36 

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

( 

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

committee.action?chamber=house&committee=education 

or 

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

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(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 

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C O N T E N T S 

Page 

Hearing held on November 13, 2013 ...................................................................... 1 

Statement of Members: 

Hinojosa, Hon. Rube ́n, a Representative in Congress from the State of 

Texas .............................................................................................................. 7 

Prepared statement of ............................................................................... 8 

Kline, Hon. John, Chairman, Committee on Education and the Workforce 5 

Prepared statement of ............................................................................... 6 

Statement of Witnesses: 

Baum, Dr. Sandy, senior fellow, the Urban Institute; research professor 

of education policy, the George Washington University Graduate School 

of Education and Human Development ...................................................... 79 

Prepared statement of ............................................................................... 82 

Conklin, Kristin D., founding partner, HCM Strategists .............................. 10 

Prepared statement of ............................................................................... 12 

Delisle, Jason, director, federal education budget project, New America 

Foundation ..................................................................................................... 99 

Prepared statement of ............................................................................... 101 

Mishory, Jennifer, deputy director, Young Invincibles ................................. 92 

Prepared statement of ............................................................................... 94 

Additional Submissions: 

Barletta, Hon. Lou, a Representative in Congress from the State of Pennsylvania, prepared statement of the Pennsylvania Association of Private School Administrators (PAPSA) .......................................................... 142 

Ms. Conklin, report, ‘‘Doing Better for More Students,’’ Internet address 

to ..................................................................................................................... 79 

Mr. Hinojosa, letter, dated Nov. 13, 2013, regarding committee business .. 3 

Chairman Kline, prepared statement of the Education Finance Council 

(EFC) .............................................................................................................. 141 

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KEEPING COLLEGE WITHIN REACH: 

SIMPLIFYING FEDERAL STUDENT AID 

Wednesday, November 13, 2013 

U.S. House of Representatives 

Committee on Education and the Workforce 

Washington, DC 

The committee met, pursuant to call, at 10:03 a.m., in room 

2175, Rayburn House Office Building, Hon. John Kline [chairman 

of the committee] presiding. 

Present: Representatives Kline, Petri, Wilson, Foxx, Thompson, 

Walberg, Guthrie, DesJarlais, Rokita, Heck, Brooks, Messer, Andrews, Scott, Hinojosa, Tierney, Holt, Davis, Grijalva, Bishop, 

Courtney, Fudge, Polis, Sablan, Wilson, Bonamici, and Pocan. 

Staff present: Janelle Belland, Coalitions and Members Services 

Coordinator; 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; Kelly Broughan, Minority Education Policy Associate; Jacque Chevalier, Minority Education Policy Advisor; Eamonn Collins, Minority Fellow, Education; 

Jamie Fasteau, Minority Director of Education Policy; Rich Williams, Minority Education Policy Advisor; Michael Zola, Minority 

Deputy Staff Director; and Mark Zuckerman, Minority Senior Economic Advisor. 

Chairman KLINE. A quorum being present, the committee will 

come to order. 

Before we proceed with this morning’s hearing I would like to 

recognize Mr. Hinojosa for an announcement. 

Mr. HINOJOSA. Thank you, Chairman Kline. 

It is a privilege and I want to welcome our newest member to 

the Education Committee. Congressman Mark Pocan, who represents Wisconsin’s 2nd district, is filling the vacancy on this committee left by Congressman John Yarmuth, who is now on the Energy and Commerce Committee. 

Congressman Pocan is tailor-made for working on this committee. He is a small business owner and he is a union member. 

He knows how to work across political divides and he knows how 

to legislate. 

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He served seven terms in the Wisconsin State Assembly. His successes earned him the Best Legislator Award from Milwaukee Magazine. 

This is Congressman Pocan’s first term in the House of Representatives and he has already proven to be a strong voice for students and working families from his home state and across the 

country. 

With his assignment to this committee I am submitting senior 

Democratic Member Miller’s letter announcing the new subcommittee assignments for Democratic members. 

And Congresswoman Wilson will be moving from Early Childhood to the Higher Ed Subcommittee. Congresswoman Bonamici 

will be moving from Workforce Protections to the HELP Subcommittee. And Congressman Pocan will be joining the Early 

Childhood and Workforce Protections Subcommittee. 

I urge all my colleagues to join me in welcoming Congressman 

Pocan. [Applause.] 

Mr. PETRI. Would the gentleman yield? 

Mr. HINOJOSA. Yes. I yield to you. 

Mr. PETRI. I would like to join in welcoming my colleague, who 

I am very happy is a member of this committee, my colleague from 

Wisconsin, who represents—has within his district one of the great 

educational institutions really in the world, the University of Wisconsin. It is internationally famous in many areas and I suspect 

that may be one of his priorities. And we look forward to working 

together on helping the university. 

Mr. HINOJOSA. Mr. Pocan, I would like to yield time to you. 

Mr. POCAN. Sure. I just want to say thank you very much. I’m 

looking forward to serving on the committee and looking forward 

to the work we have to do that is ahead of us. 

Thank you very much. 

Mr. HINOJOSA. That is the briefest speech I have ever heard. 

Mr. Chairman, I ask unanimous consent that this letter advising 

the chairman of our revised subcommittee assignments be included 

in the record. 

[The information follows:] 

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Chairman KLINE. Without objection. 

Mr. HINOJOSA. Okay. I think this is—and I yield back. 

Chairman KLINE. Gentleman yields back. 

Mr. POCAN, I also welcome you to the Committee on Education 

and the Workforce. I know you, like I and Mr. Petri, are looking 

forward to a football game on Saturday. I have different expectations, I am sure, than you do, but we are glad to have you. 

I would like to thank our witnesses for joining us today. We look 

forward to your testimony. 

In preparation for the upcoming reauthorization of the Higher 

Education Act, the committee has held nearly a dozen hearings to 

explore the challenges and opportunities facing our nation’s colleges and universities. 

We have discussed the value of transparency and data in helping 

prospective students choose the postsecondary institution that best 

meets their unique needs. We have examined factors that contribute to rising college costs and reviewed the consequences of 

burdensome federal regulations and paperwork requirements. And 

we have highlighted the critical importance of promoting innovation and academic freedom in our nation’s higher education system. 

Without question, ensuring more students have access to an affordable, quality postsecondary education is a top priority for everyone in this room. But despite the best of intentions, the federal efforts to expand aid programs over the past 50 years have resulted 

in an overly complex system that is difficult to navigate. 

Today, with the help of our witnesses, we will explore opportunities to streamline the federal aid system, making it easier for students to evaluate federal aid options and make smart investments 

in postsecondary education. 

I would like to take a moment to share with you the process students and families must go through when trying to access federal 

aid. First, students must complete the Free Application for Federal 

Student Aid, or FAFSA, which includes more than 100 detailed 

questions on a range of topics including earnings and savings, parental education attainment, receipt of government benefits, and 

assets. 

After completing the lengthy FAFSA application, students must 

try to understand the available aid options while also deciphering 

the differences between loans and grants. To make an informed decision about financial aid, students and their families need to grasp 

what makes each program unique, including the terms and conditions, eligibility requirements, and aid amounts awarded by individual institutions. 

And finally—excuse me—when a student chooses an aid package 

he or she must also begin thinking about how to eventually repay 

the loans. As we saw with the recent student loan interest rate debate, far too many students don’t fully understand their loan obligations until after they after they graduate, and students often 

miss opportunities to take advantage of federal repayment initiatives simply because they don’t know such programs exist. 

During the 2008 reauthorization of the Higher Education Act, 

Congress took an important first step toward improving the federal 

aid system by simplifying the FAFSA, but the still-cumbersome application proves there is more work to be done. Fortunately, the 

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6 

higher education, business, and policy communities, in coordination 

with the Bill and Melinda Gates Foundation’s Reimagining Aid Design and Delivery initiative, have put forth a number of interesting 

ideas to restructure the system. 

One proposal suggests further streamlining the FAFSA by dramatically simplifying the need analysis formula used to determine 

student eligibility. Instead of calculating a student’s expected family contribution through detailed questions, a modernized formula 

would only use a family’s size and adjusted gross income to determine eligibility. Additionally, the new formula would build on past 

efforts to rein in the FAFSA through partnerships with the IRS, allowing applicants to retrieve financial information more easily. 

To reduce confusion and complexity in the federal aid system, another proposal calls for the consolidation of all existing federal postsecondary aid programs into a ‘‘one loan and one grant’’ structure. 

In this scenario, students would have access to a single loan with 

a market-based interest rate and one universal repayment plan. 

Other proposals focus on helping students access more transparent 

information about their federal aid options, which has long been a 

Republican priority. 

Before I yield to the distinguished ranking member—today, Mr. 

Hinojosa—I would like to note that I am proud of the work we did 

earlier this year to revamp federal student loans. Though it was a 

difficult battle, eventually we came together on a bipartisan solution that has resulted in lower interest rates for millions of loan 

borrowers. 

We now have the opportunity to build on this success and find 

the common ground necessary to reauthorize the Higher Education 

Act. I look forward to working with my colleagues on both sides of 

the aisle to strengthen the law and ensure more students can realize the dream of a college degree. 

And with that, I would now like to recognize Mr. Hinojosa for his 

opening remarks. 

[The statement of Chairman Kline follows:] 

Prepared Statement of Hon. John Kline, Chairman, Committee on 

Education and the Workforce 

Good morning and welcome. I’d like to thank our witnesses for joining us today. 

We look forward to your testimony. 

In preparation for the upcoming reauthorization of the Higher Education Act, the 

committee has held nearly a dozen hearings to explore the challenges and opportunities facing our nation’s colleges and universities. 

We’ve discussed the value of transparency and data in helping prospective students choose the postsecondary institution that best meets their unique needs. We 

have examined factors that contribute to rising college costs and reviewed the consequences of burdensome federal regulations and paperwork requirements. And 

we’ve highlighted the critical importance of promoting innovation and academic freedom in our nation’s higher education system. 

Without question, ensuring more students have access to an affordable, quality 

postsecondary education is a top priority for everyone in this room. But despite the 

best of intentions, federal efforts to expand aid programs over the past 50 years 

have resulted in an overly complex system that is difficult to navigate. 

Today, with the help of our witnesses, we will explore opportunities to streamline 

the federal aid system, making it easier for students to evaluate federal aid options 

and make smart investments in postsecondary education. 

I’d like to take a moment to share with you the process students and families 

must go through when trying to access federal aid. First, students must complete 

the Free Application for Federal Student Aid, or FAFSA, which includes more than 

CEWDOCROOM with DISTILLER

7 

a hundred detailed questions on a range of topics including earnings and savings, 

parental education attainment, receipt of government benefits, and assets. 

After completing the lengthy FAFSA application, students must try to understand 

the available aid options while also deciphering the differences between loans and 

grants. To make an informed decision about financial aid, students and their families need to grasp what makes each program unique, including the terms and conditions, eligibility requirements, and aid amounts awarded by individual institutions. 

And finally, when a student chooses an aid package, he or she must also begin 

thinking about how to eventually repay the loans. As we saw with the recent student loan interest rate debate, far too many students don’t fully understand their 

loan obligations until after they graduate. And students often miss opportunities to 

take advantage of federal repayment initiatives simply because they don’t know 

such programs exist. 

During the 2008 reauthorization of the Higher Education Act, Congress took an 

important first step toward improving the federal aid system by simplifying the 

FAFSA—but the still-cumbersome application proves there’s more work to be done. 

Fortunately, the higher education, business, and policy communities, in coordination 

with the Bill and Melinda Gates Foundation’s Reimagining Aid Design and Delivery 

initiative, have put forth a number of interesting ideas to restructure the system. 

One proposal suggests further streamlining the FAFSA by dramatically simplifying the need analysis formula used to determine student eligibility. Instead of calculating a student’s expected family contribution through detailed questions, a modernized formula would only use a family’s size and adjusted gross income to determine eligibility. Additionally, the new formula would build on past efforts to rein 

in the FAFSA through partnerships with the IRS, allowing applicants to retrieve 

financial information more easily. 

To reduce confusion and complexity in the federal aid system, another proposal 

calls for the consolidation of all existing federal postsecondary aid programs into a 

’one loan and one grant’ structure. In this scenario, students would have access to 

a single loan with a market-based interest rate and one universal repayment plan. 

Other proposals focus on helping students access more transparent information 

about their federal aid options, which has been a longstanding Republican priority. 

Before I yield to the distinguished ranking member, George Miller, I’d like to note 

that I am proud of the work we did earlier this year to revamp federal student 

loans. Though it was a difficult battle, eventually we came together on a bipartisan 

solution that has resulted in lower interest rates for millions of loan borrowers. We 

now have the opportunity to build on this success and find the common ground necessary to the reauthorize the Higher Education Act. I look forward to working with 

my colleagues on both sides of the aisle to strengthen the law and ensure more students can realize the dream of a college degree. 

With that, I would now like to recognize the senior Democrat member of the committee, Mr. Miller, for his opening remarks. 

Mr. HINOJOSA. Chairman Kline, thank you. Thank you for holding this hearing on student aid simplification, an important topic 

as we begin to reauthorize HEA. 

We know that now, more than ever, a higher education is the 

gateway to the American dream and a middle-class life. Unfortunately, we also know that rising costs are pushing a college degree 

out of reach for too many families. 

After many years of skyrocketing tuition, state budget cuts, and 

stagnant household incomes, students and their families are turning to loans to pay for college at unprecedented rates. Student loan 

debt has almost tripled in the last 8 years, as more students need 

to borrow more money to go to college. The average student now 

graduates with $26,000 in debt. 

This year, the Consumer Financial Protection Bureau found that 

total student debt in this country was more than $1.2 trillion— 

higher than the nation’s total credit card debt. 

And it isn’t just young people borrowing for school. Those 40- 

year-olds and older carry more than 34 percent of our nation’s student loan debt. 

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8 

Falling behind on monthly payments will maim a borrower’s 

credit rating and open the door to wage, Social Security, and tax 

refund garnishment. This debt threatens the upward mobility that 

higher education once guaranteed. 

We must make it as easy as possible for current and former students to dig out from underneath these burdens. 

For example, this committee can make student loan repayment 

easier. While federal loan borrowers enjoy a variety of payment 

plans, we have heard that borrowers can find the sheer number of 

options confusing. Repaying college loans should not be a troublesome, arduous process. 

This committee should examine if consolidating seven different 

repayment options into fewer, more robust plans would benefit borrowers. 

Other options to explore are whether distressed borrowers could 

be automatically placed into an income-based repayment plan before the harsh penalties of default and collections occur. 

Recent initiatives to simplify the financial aid process and make 

college costs more transparent for students, such as the Financial 

Aid Shopping Sheet or the College Scorecard, and FAFSA simplification have improved access to a higher education. But they 

alone cannot make the process of repaying student loans easier. 

As we look at ways to simplify the repayment process, we must 

also take care not to cut student aid programs nor eligibility. Such 

changes would only increase student loan debt. 

We must not lose sight of the fact that these borrowers are the 

nation’s future. If they are shackled by unmanageable debt our 

economy will invariably suffer. 

In closing, I want to say we have a moral and economic obligation to ensure that all qualified students who want to attend college can afford to go. I look forward to hearing from our witnesses 

on ways Congress can work together to address these questions 

and reduce student loan debt. 

Thank you, Mr. Chairman, for—thank you to the panelists, rather. Thank you for joining us today and I look forward to hearing 

your presentations. 

With that, I yield back. 

[The statement of Mr. Hinojosa follows:] 

Prepared Statement of Hon. Rube ́n Hinojosa, a Representative in Congress 

From the State of Texas 

Good morning, Chairman Kline. Thank you for holding this hearing on student 

aid simplification, an important topic as we begin to reauthorize the higher education act. 

We know that now, more than ever, a higher education is a gateway to the American Dream and a middle class life. 

Unfortunately, we also know that rising costs are pushing a college degree out of 

reach for too many families. 

After many years of skyrocketing tuition, state budget cuts, and stagnant household incomes, students and their families are turning to loans to pay for college at 

unprecedented rates. 

Student loan debt has almost tripled in the last eight years as more students need 

to borrow more money to go to school. The average student now graduates with 

$26,000 in debt. 

This year, the Consumer Financial Protection Bureau found that total student 

debt in this country was more than $1.2 trillion—higher than the nation’s total 

credit card debt. 

Repaying this massive debt complicates other life decisions. 

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9 

It affects where people can work, whether they can save enough money to purchase a home, whether they can afford to take a risk and start a business, or whether they can get married or start a family. 

And it isn’t just young people borrowing for school—those 40 years old and older 

carry more than 34 percent of our nation’s student loan debt. 

Older borrowers may be forced to delay saving for their child’s education or their 

retirement. 

Falling behind on monthly payments will maim a borrower’s credit rating and 

open the door to wage, Social Security, and tax refund garnishment. 

This debt threatens the upward mobility that higher education once guaranteed. 

We must make it as easy as possible for current and former students to dig out 

from underneath these burdens. 

For example, this committee can make student loan repayment easier. 

While federal loan borrowers enjoy a variety of payment plans, we have heard 

that borrowers can find the sheer number of options confusing. Repaying college 

loans should not be a troublesome, arduous process. 

This committee should examine if consolidating seven different repayment options 

into fewer more robust plans would benefit borrowers. 

Other options to explore are whether distressed borrowers could be automatically 

placed into an Income Based Repayment Plan—before the harsh penalties of default 

and collections occur. 

Recent initiatives to simplify the financial aid process and make college costs 

more transparent for students—such as the Financial Aid Shopping Sheet, the College Score Card, and FAFSA simplification—have improved access to a higher education. 

But they alone cannot make the process of repaying student loans easier. 

As we look at ways to simplify the repayment process, we must also take care 

not to cut student aid programs or eligibility. Such changes would only increase student loan debt. 

We must not lose sight of the fact that these borrowers are the nation’s future. 

If they are shackled by unmanageable debt, our economy will invariably suffer. 

We have a moral and economic obligation to ensure that all qualified students 

who want to attend college can afford to go. 

I look forward to hearing from our witnesses on ways Congress can work together 

to address these questions and reduce student loan debt. 

Thank you for joining us today. I yield back. 

Chairman KLINE. Thank the gentleman. 

Pursuant to committee rule 7(c), all committee 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 

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

It is now my pleasure to introduce our distinguished panel of witnesses. 

Ms. Kristin Conklin is a founding partner of HCM Strategies, 

LLC and a government relations and strategy development firm. 

Prior to starting HCM, Ms. Conklin served as senior advisor to the 

undersecretary of the U.S. Department of Education. 

Dr. Sandy Baum currently serves as a research professor at the 

George Washington University Graduate School of Education and 

Human Development and a senior fellow at the Urban Institute. 

Ms. Jennifer Mishory is the deputy director of Young Invincibles, 

a national nonprofit organization dedicated to expanding opportunities for young adults. 

And Mr. Jason Delisle serves as the director of the Federal Education Budget Project at the New America Foundation. Previously, 

Mr. Delisle was a senior analyst on the Republican staff of the Senate Budget Committee and a legislative aide in the office of Mr. 

Thomas Petri. 

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10 

Before I recognize each of you to provide your testimony let me 

briefly explain our high-tech lighting system. 

You will each have five minutes to present your testimony. When 

you begin, the light in front of you will turn green; when 1 minute 

is left, the light will turn yellow; and when your time is expired, 

the light will turn red. At that point I ask you to wrap up your remarks as best you are able. 

After everyone has testified members will each have five minutes 

to ask questions of the panel. 

I now recognize Ms. Conklin for 5 minutes. 

STATEMENT OF KRISTIN D. CONKLIN, FOUNDING PARTNER, 

HCM STRATEGISTS, LLC 

Ms. CONKLIN. Thank you, Chairman Kline, Ranking Member 

Hinojosa, and members of the committee, for the opportunity to 

discuss how federal financial aid investments can work better for 

students, families, and taxpayers. 

My name is Kristin Conklin and I stand before you as a Pell 

Grant recipient—the first in my family to graduate college. As a result of the education I received, I am the first in my family to start 

a business and create jobs. 

I am here to share the work of HCM Strategists, a public policy 

and advocacy consulting firm. 

For millions of students, financial aid clears the path to the 

American dream. If I can leave you with one point it is that simpler is better. Simpler is the best way to improve outcomes and 

more efficiently spend the billions of dollars in aid we already invest. 

Simpler requires a holistic look at all programs. This can be accomplished with a blank-slate approach to reauthorizing the Higher Education Act next year. 

After decades of tinkering we now have four different grant programs and five different loan programs, each with different eligibility criteria, different standards for maintaining the awards, different lengths of time a student can receive the awards, and different repayment terms. The average student completing the 

FAFSA faces 61 questions. No wonder nearly two million students 

eligible for aid never even apply. 

We can do better. This January, HCM released the American 

Dream 2.0 Report. The report is a product of diverse leaders such 

as Indiana Governor Mitch Daniels; former director of the CBO, 

Robert Reischauer; president of the National Urban League, Marc 

Morial; and Tom Snyder, of Ivy Tech Community College; as well 

as two of the co-panelists testifying with me today. 

The report received coverage in the New York Times and 280 

other media outlets for its three overarching recommendations: 

one, make aid simpler and more transparent; two, spur innovations 

in higher education that can lower costs and meet the needs of today’s students; and asked institutions, states, and students to 

share responsibility for producing more graduates. 

The technical panel of experts HCM led went a step further, and 

offered specific recommendations needed to deliver on the coalition’s recommendations. Our report, ‘‘Doing Better for More StuCEWDOCROOM with DISTILLER

11 

dents,’’ offers the most exhaustive modeling of options and impacts 

of any financial aid report. 

Our principal recommendations: students, families, and taxpayers would be much better served with one grant, one loan, and 

one tax benefit. 

Through pilot improvements tested in the last 4 years, we know 

it is possible to give students an instant lookup table powered by 

a smartphone app. Congress, however, will need to radically simplify needs analysis to make this vision a reality. 

We propose reducing needs analysis to four variables. First, if 

you receive federal means-tested assistance you are automatically 

eligible for student aid. Two other variables, adjusted gross family 

income and family size, would be retrieved by the IRS. 

Our final variable would apply to students with more complex financial situations. Information regarding their assets can also be 

retrieved by the IRS. 

According to the Urban Institute, Brookings modeling, HCM 

Commission, these changes can save between $37 billion and $73 

billion. 

We also call for a single income-based loan repayment program 

with common annual and aggregate borrowing limits—for undergraduates, $8,750 a year and $35,000 total; for graduate students, 

$30,000 a year and $90,000 total. Savings from this simplification 

are projected to be $38 billion over 10 years. 

For both the single grant and loan programs we recommend 

shared responsibility for college completion. 

To get a maximum annual grant or loan students should complete 30 credit hours in a calendar year—enough to finish a bachelor’s degree in four or an associate’s degree in two years. For colleges, we recommend adding measures of equity and success to institutional Title IV eligibility. Ten-year savings are projected to be 

$39 billion. 

Public opinion supports an emphasis on completion and simplification. Last year, HCM Strategists commissioned Hart Research Associates and the Winston Group to survey voters. 

They found 84 percent of voters agree that earning credential is 

very important. Ninety-five percent of African American parents 

and 97 percent of Hispanic parents agreed. 

More than three in five voters think streamlining is a good approach. 

What can we expect from these changes? More needy students 

will believe that college is possible. 

Redefining full-time status will mean more students progress and 

graduate faster, requiring fewer total years of support. Financial 

aid counselors will spend less time on regulatory compliance and 

more time helping students succeed. Savings can be found that 

shore up the Pell Grant for another decade. 

Thank you for allowing me to talk on this important topic and 

I look forward to your questions. 

[The statement of Ms. Conklin follows:] 

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[The report, ‘‘Doing Better for More Students,’’ may be accessed 

at the following Internet address:] 

http://hcmstrategists.com/wp-content/themes/hcmstrategists/docs/Technical_report_fnl.pdf 

Chairman KLINE. Thank you. 

Dr. Baum? 

STATEMENT OF DR. SANDY BAUM, RESEARCH PROFESSOR OF 

EDUCATION POLICY, GEORGE WASHINGTON UNIVERSITY, 

SENIOR FELLOW, URBAN INSTITUTE 

Ms. BAUM. Thank you. 

Chairman Kline, Mr. Hinojosa, members of the committee, I am 

very pleased to have an opportunity to speak with you today about 

simplifying the student aid system. I am a research professor at 

the George Washington University Graduate School of Education 

and a senior fellow at the Urban Institute, but the comments that 

I am making today reflect my own opinions and are not the opinions of the organizations with which I am affiliated. 

I could talk all day about student loans but I am going to focus 

on simplifying the federal grant system, and in particular, the Pell 

Grant program. I agree with everything that Kristin said—almost. 

But I really want to focus on the Pell Grant program because the 

Pell Grant program is the bedrock of the federal student aid system. For 40 years it has transformed the lives of many students 

and it can continue to do so. It can do better over the next 40 years 

if we simplify it, if we make it more transparent, if we make it 

more predictable for students, and if instead of just handing students money we make sure that it involves the right incentives and 

the right supports for students and the institutions in which they 

enroll to achieve their goals. 

So what we need to do is we need to think carefully about how 

to reform the program using the principles of simplification, and 

predictability, and appropriate incentives. So we should simplify 

the application process so students don’t have to provide information not available from the IRS. We should determine eligibility 

once, before students begin their studies, so that they don’t have 

to reapply every year. 

We should simplify the formula with a simple lookup table that 

applies to most students. We should simplify the way enrollment 

is linked to the amount—enrollment intensity, the amount of 

courses you take and credits for which you enroll is linked to the 

amount of money you get. 

We should think about the standards for academic progress more 

carefully and we should consolidate federal aid programs. 

So as background, I know everyone is worried about how much 

the Pell Grant program spends. Pell Grant spending doubled very 

quickly over a few years and the number of recipients also increased dramatically. 

But it is important to note that 2010-2011 was a peak; it is not 

that we were on a trajectory. The recovery in the economy and 

some of the changes that Congress made, made spending fall, made 

the number of recipients fall. We can argue about whether that is 

good or bad, but it is not that it is going to keep doubling. 

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So let me talk a little bit about some specific proposals for reforming the Pell Grant program. And one important thing is that 

these are based on the ideas of how students and how human 

beings behave. We know a lot from behavioral economics about how 

people respond to information and opportunities, and in particular, 

we know that they respond to complexity by just withdrawing from 

making decisions and taking the path of least resistance. 

For young people growing up in middle-and upper-income families the path of least resistance is going straight to college. But for 

people growing up in low-income households, it is not; it is going 

to the workforce. 

So we need to simplify the system so that we make the path of 

least resistance going to college and knowing that you will be able 

to afford it. 

We can make the application process simple by saying, ‘‘We already know your information either through the IRS or through 

needs-based programs that you are available for.’’ This would save 

the difficulty of verifying the information that people put on their 

FAFSA. 

We can simplify by saying you apply once. For juniors in high 

school, we could calculate their Pell eligibility and tell them about 

it. This would make not going to college and not taking a Pell 

Grant a loss, and people respond more strongly to losses than they 

do to being given certain amounts of money. 

One very important issue is how we allocate the amount of Pell 

Grant funds that students have to pay for their courses. Right now, 

if you are enrolled for 12 credit hours you get the maximum Pell 

Grant if you have maximum need, and if you want to enroll for 15, 

we won’t give you any more money, whether you do it over the 

summer or in the following semester. 

This means that students enroll for 12 credit hours and they 

take five years to get a bachelor’s degree or longer than two years 

to get to an associate degree. We don’t understand why students 

don’t complete on time. This would help them to complete if we 

would give them additional funding when they enroll for the number of courses that they need in order to complete. 

Satisfactory academic progress is designed to make sure that students progress towards their goals, but right now if you don’t meet 

the standards at one school you can go across the street to another 

school and get a new Pell Grant. That doesn’t help students who 

borrow money who spend their time going from school to school 

and not making progress. We need to make rules and regulations 

that will support students in meeting their goals. 

We also need to consolidate programs. Instead of having multiple 

federal grant programs—and that would exclude things like veterans’ programs and specifically targeted programs—we should 

have the Pell Grant program. 

The funds that are now in the campus-based programs should go 

to campuses, but they should be allocated to campuses to help 

them support the success of low-income students. We need to experiment with programs like this, get rigorous evidence about how 

to make them work well, but we can do this. 

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To make the Pell Grant program work better it has to be simpler, it has to be clearer, and it has to be designed to support students in meeting their goals. 

Thank you. 

[The statement of Ms. Baum follows:] 

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Chairman KLINE. Thank you. 

Ms. Mishory, you are recognized. 

STATEMENT OF JENNIFER MISHORY, J.D., DEPUTY DIRECTOR, 

YOUNG INVINCIBLES 

Ms. MISHORY. Thank you. 

Chairman Kline and Ranking Member Hinojosa, I thank you for 

having this important hearing today and for inviting me to share 

the student perspective on simplifying financial aid. 

My name is Jennifer Mishory. I am the deputy director of Young 

Invincibles. We are a nonprofit dedicated to expanding economic 

opportunity for young adults. We engage with students around college affordability and access, elevate their stories, and ensure that 

our leaders understand the experience of today’s student. 

This generation understands that higher education is essential, 

but faces growing challenges. States are spending 28 percent less 

per student on higher education than they were in 2008, leading 

to a 27 percent increase in tuition at 4-year public colleges. 

As a result, in 1980, the Pell Grant covered more than half the 

cost of a 4-year school. It now covers less than a third and it forces 

two-thirds of graduates to take out student loans. Many struggle 

to navigate the aid system in doing so. 

Take Robin, a college freshman at a 4-year school studying to be 

a physical therapist. Robin grew up in a low-income community in 

Chicago, and as a first-generation student she struggled to obtain 

an education and gain financial security. 

Like most college students, she relied on a maze of grants and 

loans. However, at the end of her first semester she found herself 

with an overcharged account and nowhere to turn. 

She reached out to a mentor, a former high school teacher who 

happened to be a friend of mine. I spent literally days working 

through all of the paperwork that she had and that I myself found 

very confusing and finally realized she simply didn’t have enough 

aid to cover her costs. The complex system meant it took months 

for the unmet need to become clear. 

Robin couldn’t afford to pay the shortfall. Private loans were not 

an option for her. And this college freshman with so much potential 

dropped out. 

I am hopeful that she enrolled in a 2-year school but I don’t 

know how her story will end. 

This story illustrates how an overly complex aid system can limit 

access and success. But it also illustrates that simplification cannot 

result in cutting aid to students working to educate themselves into 

the middle class. 

Students support making aid simpler but oppose cutting aid. In 

a 2011 poll, eight in 10 students opposed cutting Pell or loan subsidies to reduce the deficit—important to keep in mind as we discuss these reforms. 

I want to talk about three reforms specifically: first, simplifying 

the aid application process on the front end; second, ensuring that 

students can make good choices in dealing with financial aid; and 

third, streamlining repayment on the back end. 

First, applying for financial aid through the FAFSA, a 106-question form, leaves many confused and deters some from applying. 

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About 2 million students who would have qualified for financial aid 

failed to even file a FAFSA in 2007. We urge this committee to reduce the number of questions on the FAFSA to make it simpler. 

And once students are making decisions on aid, students also 

need better information. Over 90 percent of students in one survey 

agreed that financial aid award letters should be standardized. 

Second, understanding aid can also be daunting, as we saw with 

Robin. In a recent survey, 40 percent of high-debt respondents to 

this survey reported they did not receive federally mandated loan 

counseling. It is possible that some students didn’t receive the 

counseling, but it is also likely that many benefited so little that 

they didn’t remember it or didn’t consider what they received to be 

counseling. 

I urge this committee to explore reforms that provide clear, consumer-tested materials to students and provide them with much 

more help from counselors. 

Third, loan repayment is also challenging and the seven different 

repayment plans mean that borrowers frequently struggle to choose 

a plan that is right for them or to even know about their options. 

As a result, many debtors struggle to afford the standard payments 

and we face a sky-high 15 percent default rate. 

Income-based repayment has helped some borrowers but we can 

do more. We are pleased that the Department of Education will 

begin proactively reaching out to students about IBR and believe 

that this committee could build on that. 

We recommend either automatically enrolling all students in income-based repayments or allowing them to opt out of an incomebased repayment plan rather than having to opt in. A survey conducted by Y.I. found that 89 percent of respondents agreed with 

automatically being enrolled in IBR. 

We could also alter the formula, helping students pay faster if 

they can, and we could potentially streamline repayment through 

the payroll tax system. While most students would still pay off 

their loans in a similar amount of time, it would cushion debtors 

facing financial distress, ultimately lowering default rates. It would 

make repayment less confusing and reduce the risk perceived by 

students who hesitate to pursue a degree in the first place. 

Finally, in this system schools must be held accountable to keep 

tuition low. We are encouraged that some members of this committee have expressed an interest in repayment reform. 

We have concerns, however, about proposals that strip necessary 

protections. Caps on interest rates and forgiveness for public service employees or debtors who have been paying for decades are 

vital elements in the current system. We can simplify financial aid 

and preserve those elements. 

Thank you for exploring these important issues, and I look forward to the discussion. 

[The statement of Ms. Mishory follows:] 

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Chairman KLINE. Thank you. 

Mr. Delisle? 

STATEMENT OF JASON DELISLE, DIRECTOR, FEDERAL 

EDUCATION BUDGET PROJECT, NEW AMERICA FOUNDATION 

Mr. DELISLE. Chairman Kline, Ranking Member Hinojosa, and 

committee members, thank you for inviting me to testify about the 

need to simplify the federal student loan program. 

From the borrower’s perspective, the loan program is unnecessarily complex and many of its important benefits are difficult to 

access, are hidden, or require the borrower to opt in. Some terms 

and benefits even overlap or cancel one another out. 

When a student applies for his federal loans, he will confront a 

mix of types, terms, and names. Some may make sense, others will 

confuse him, and some he may not even know exist. 

Will he know that a Stafford Loan is a loan from the federal government? Will he understand that ‘‘unsubsidized’’ doesn’t mean he 

is getting a bad deal? 

When he repays his loans, he will have up to nine different plans 

to choose from—that is my count, others said seven—each with its 

own set of terms and eligibility rules. But here is the kicker: the 

Department of Education, by law, will automatically enroll him in 

a plan where he will make the highest monthly payments—the 10- 

year standard repayment plan. 

To be sure, this policy signals to borrowers that they should 

repay their loans quickly. Yet, policymakers need to recognize its 

inherent tradeoff: borrowers who really need to make lower payments may not understand that they have such an option or may 

not be able to successfully navigate the enrollment process. That 

seems like a high price to pay in order to nudge borrowers to repay 

quickly under the 10-year repayment plan. 

So as Congress considers the reauthorization of the Higher Education Act in the coming months, lawmakers should make it a priority to remedy these issues. Briefly, they should minimize the different names, types, and terms of the loans and then offer just one 

plan when borrowers repay—the existing income-based repayment 

plan, or what the Obama Administration calls ‘‘Pay As You 

Earn’’—but only after making essential modifications to that plan. 

In its current form, Pay as You Earn is a massive tuition assistance program for graduate students masquerading as a means-tested safety net program. 

So let me provide you with a few examples of the complexities 

and optional benefits in the federal loan program that I mentioned 

earlier. The program offers two different types of loans to undergraduates: unsubsidized and subsidized Staffords. Many borrowers 

qualify for both, and they receive both. 

An undergraduate could also have a third type of federal loan, 

called a Perkins Loan. And if he goes on to graduate school, he 

could end up with a fourth type of federal loan, called a Grad 

PLUS Loan. 

Earlier I mentioned that a borrower, once out of school, can 

choose from up to nine repayment plans. He might not be eligible 

for all of them, although that is actually possible, but he probably 

qualifies for at least four of them. Many of these plans have hidden 

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benefits or confusing names that make them difficult to distinguish. 

I wonder if even the committee members can keep the differences 

straight between graduated repayment, income-contingent repayment, income-based repayment, and Pay as You Earn. 

And I would bet that everyone is surprised to learn that the biggest benefit of the consolidation repayment plan has nothing to do 

with consolidating debt. Nope. That plan lets anyone with a balance of just 7,500 or more reduce his monthly payment by extending the term of his loan to anywhere from 12 to 30 years depending 

on the balance. 

And now that I have said that I am sure someone, somewhere 

is wondering why, then, the program also offers an extended repayment plan, which, by the way, is not the same as the consolidation 

plan but it will extend the term of the loan, and by a completely 

different set of rules. 

The written testimony that I submitted today includes some specifics on how to minimize the different terms on federal loans. It 

also includes changes lawmakers should make to Pay as You Earn 

so that the plan does not let high-income borrowers walk away 

from their debts, does not allow graduate students to finance most 

or all of their educations using loan forgiveness, and does not indemnify or reward schools when they charge more and students 

when they borrow more. 

Before making Pay as You Earn the only repayment option, 

which is what I am recommending today, Congress must ensure 

that its loan forgiveness benefit is truly and only a safety net and 

that the public service loan forgiveness benefit is subject to limits. 

Making Pay as You Earn the only repayment plan available 

would greatly simplify the program. It would also automatically 

provide benefits that exist right now in the current program and 

it would provide them to those who need them most. Borrowers 

who still want to pay their loans off on a 10-year plan could do so 

by making repayments in amounts automatically calculated on 

their statements. 

Now, I should note that under the modified version of Pay as You 

Earn that I am recommending, some borrowers would make higher 

monthly payments—that is, they would repay faster than under today’s system—particularly high earners and those with smaller 

loan balances. Yet, that is a tradeoff worth making in order to 

achieve a student loan program where benefits for those who need 

it the most are automatic and obvious rather than obscure and optional. 

That concludes my testimony today. I look forward to answering 

your questions. 

[The statement of Mr. Delisle follows:] 

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Chairman KLINE. Thank you very much. 

Thanks to all of you. 

I didn’t hear any of you say that you thought we ought to have 

a more complicated system. Just when I am convinced that it 

would be impossible for us to make a more complicated system, I 

look around and we have done so. 

So, I am delighted that there seems to be a consensus among you 

and I am guessing among our colleagues here on both sides of the 

aisle—but we will see as we go forward—that what we have now 

is too complicated and so it doesn’t get used in some cases, it gets 

abused in other cases. Mr. Delisle sort of challenged the members 

of the committee to explain the four, five, nine, hike different ones, 

and nobody here is going to take that challenge I don’t think— 

maybe Mr. Hinojosa, but— 

So I think that there is a growing consensus that we have a complicated system that must be changed. 

So let me start with you, Ms. Conklin. You must have heard from 

some people that oppose creating a single source of loan and grant 

funds. Who are those people and what do you say to them? 

Ms. CONKLIN. I hear most people object to the idea of picking and 

choosing from options. So what we recommend, through this HCM 

technical panel, is a holistic look at the—at a single grant and a 

single loan program because it can promote college affordability so 

much better than the alternatives. 

It can make it much easier for students to apply. We expect 

many more students will be eligible. We can pay for that with savings in the loan program in the ways that Jason has identified, 

where we transfer the subsidy to the back end of the loans. 

It finds savings that will allow us to shore up the Pell Grant program beyond 2014, when deficits are projected again. According to 

the Southern Education Foundation, half of our students in school 

today are on free and reduced lunch. It is highly likely that they 

will be needing a Pell Grant and we need to find savings to make 

sure and support them. 

Three, it helps more students graduate and graduate on time. 

The biggest college affordability issue we face is students who graduate—who fail to graduate but have debt, so this debt with no degree, or who take five, six, seven, eight years, and every year they 

are paying more tuition and losing income. That is an affordability 

crisis. 

And last, again, the significant loan aversion we see for low-income students who don’t understand this process. Again, if you look 

at this holistically instead of picking and choosing different provisions, you can create a program that is much simpler, we think 

that many more of the Pell Grant students who turn down loans 

today will be inclined to borrow and, therefore, go full-time and 

complete on time. 

Thank you. 

Chairman KLINE. I think I understand the arguments for this, 

but I guess let me try the question again. When you—HCM, you 

put your report out there and you explain this program, you never 

run up against somebody who says, ‘‘No, we shouldn’t do that’’? 

Ms. CONKLIN. We were surprised by how remarkable the consensus was for the general recommendations we proposed. 

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Chairman KLINE. Okay. Fair enough. As I said in my remarks 

just a minute ago, there does seem to be a growing consensus that 

what we have now is just awful. 

Dr. Baum, you limited your remarks to the Pell Grant program. 

It is huge. 

And I think one of you—somebody noted that it has essentially 

doubled over the last few years but is leveling, and it looks like we 

are actually going to see a dip and make money, if you will. That 

is a poor choice of words, but that probably won’t continue. 

So if we go to simplification as one of our goals here, not just for 

loans but for others, will that help to stabilize the Pell Grant—keep 

this kind of thing from going on? And how would that work? 

Ms. BAUM. Well, I think that simplification can help all aspects 

of the program. Let me just say, in response to the question that 

you asked about why there is opposition to simplification, nobody 

is opposed in principle to simplification, but the fact is, any 

changes that you make are going to have—change the benefits that 

some people get. And it is very difficult for people who are used to 

a system being the way it is not to focus on the loss that individual 

students might experience. 

And I think that Congress has to be very careful in modifying 

the program to look at who is going to benefit and who is going to 

be hurt. But we will be immobilized if we think that if we find an 

individual student who ends up worse off we can’t move forward. 

One important issue and one of the issues that I have focused 

on a lot is that Pell Grant recipients and student aid recipients altogether include not just our vision of young people from low-income households but also adults. I mean, this is really a workforce 

education program that pays to get people the skills that they need 

to be productive workers, and I think people focus either on one 

group or another. Both groups are very important. 

But it is the kind of thing where people are focused on what will 

happen to one group if we make a small change, and I think that 

a careful analysis and careful approach to reform will help that. 

In terms of simplification and the budget, if we can predict—if 

students can predict ahead of time what they are going to get, we 

will be more able to predict who is going to benefit. If students 

have incentives to progress in a timely manner we should be able 

to give students more money to cover their studies while giving 

them money for a shorter period of time, and that can save money. 

If we are careful about defining who is eligible for benefits, for 

example, in the ways that Jason discussed, making sure that the 

loan program works correctly—we can target the program effectively and we can control its costs without depriving the students 

who really need the funding from those benefits. 

Chairman KLINE. Thank you. 

My time is expired. 

Mr. Hinojosa? 

Mr. HINOJOSA. Thank you. 

I have lots of questions and want to start with Jennifer Mishory. 

Ms. Mishory, some proposals to link loan repayment to a borrower’s wages would eliminate student loan forgiveness options, 

something that I consider to be very important, especially those of 

us who represent regions with a high percentage below the naCEWDOCROOM with DISTILLER

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tional poverty level. Are loan forgiveness options important if a 

borrower is repaying based on a percentage of their income? 

Ms. MISHORY. We think that loan forgiveness options are very 

important in any reform. They both give students and borrowers a 

light at the end of the tunnel, so if someone has been paying for 

20, 25 years, they are at a point when they should be starting to 

think about retirement—should have started to think about retirement before then. And we want borrowers to be able to move on 

with their life. 

The system perhaps didn’t work for them. You know, they paid 

for 20 years and they didn’t get the returns that they expected 

when they entered school. So we think that kind of forgiveness is 

very important. 

And we think that public service loan forgiveness is very important. You know, it provides students from low-and moderate-income families with the ability to serve their communities, to serve 

their country. It provides us with students who may be interested 

in entering the workforce and filling jobs where we actually need 

more public service workers and really giving them the ability to 

do that. 

And it allows those talented and dedicated young people who 

may, again, be from low-and moderate-income families to really 

find a good skills match for their skills in the public service. 

Mr. HINOJOSA. Thank you. 

Ms. Conklin, in your testimony you recommend moving to a single income-based loan repayment system. When other countries 

have moved to similar systems they are frequently paired with 

strong, front-end protections for the students to control the college 

costs. 

Could an automatic income-based repayment system reduce pressures on colleges to control costs? And likewise, could it reduce the 

pressures on students to borrow less? 

Ms. CONKLIN. Thank you, Mr. Hinojosa. 

So one of the recommendations that is implicit in one loan program is to eliminate both the PLUS and the Grad PLUS loan programs, which don’t have time limits and we think create an incentive for institutions to not restructure their costs in the way they 

need to do to get tuition to a more moderate rate. 

So again, what we do in creating one default income-based repayment program is we actually raise the loan limits within that program. We set one for undergraduates, one for graduates, and we 

hope that while that is lower than what is currently available if 

you are availing yourself of a PLUS loan program, that that will 

be sufficient to pay for school for most students and will create 

some downward pressure on the higher-priced institutions to restructure their costs. 

We also look at the role of states. The American Dream 2.0 Coalition was very clear that the role of states is to create more lowcost pathways, and so it is very important for states to do that. I 

don’t think that is a federal role; I think that is the states stepping 

up on their historic role, sir. 

Mr. HINOJOSA. Thank you. 

Dr. Baum, you propose determining Pell eligibility just once 

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bility to last through age 24. Could you elaborate on how this simplification would encourage more low-income students to apply to 

college while reducing the burden on institutions of higher education? 

Ms. BAUM. So the idea of having people apply just once is important because it means that people don’t go through this bureaucracy over and over. It means that they know ahead of time how 

much money they will get. 

And, again, as I said in my testimony, if you—it is sort of—you 

are saying to people, ‘‘You have this money,’’ and it is theirs not 

to spend. And that can make a significant difference. 

The amount of bureaucracy that goes on now at institutions to 

verify what people say on their FAFSAs—I mean, you can write 

anything you want to on your FAFSA, right, and so what we have 

to do is compare it to the tax forms and it is all very complicated. 

And that is a waste of everyone’s resources and we could eliminate 

that. 

Mr. HINOJOSA. I understand. 

I am running out of time but there are two questions that are 

very important to me. One is that in the years of 2002 through 

2010, under the Bush administration, there were Pell Grants of 

3,000 to 3,400, and two years I remember they wanted to either 

eliminate it or cut it in more than half because we needed that 

money for war. 

Yet, when they lost the majority I remember having presidents 

and chancellors come to my office, because by then I was chairman 

of the committee, and they said that one of their highest priorities 

was to raise the Pell Grant because middle-income families were 

hurting badly. And all of this to say that we were trying to get out 

of recession. 

So, I want members of our committee to be able to see that chart 

in your remarks and understand why that happened. And lastly, 

that we increased minorities—Hispanics and African Americans— 

going to community colleges and to universities because it became 

more affordable and accessible. Thank you. 

Chairman KLINE. Gentleman’s time has expired. 

Mr. Petri? 

Mr. PETRI. I thank you, Mr. Chairman. 

I noticed in your prepared testimony that everyone except, I 

think, Dr. Baum, who was more talking about grant programs, endorsed making some form of income-based repayment the automatic or sole repayment option for federal student loans. And I 

would really like to ask each of you—and, Dr. Baum, if you would 

care to comment on it as well—if you could elaborate on your 

thinking regarding the potential benefits of making income-based 

automatic, in terms of simplification and other goals that we are 

pursuing in the reauthorization. 

Who would like to start? 

Ms. BAUM. I will start, since I didn’t say anything about it. I totally support that proposal. 

It is too complicated for students. Not enough people are participating in the program. And making it the default option would 

make more students be able to benefit from it, but we do need to 

make the kinds of revisions that Mr. Delisle has proposed in order 

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to make this an efficient program, and many of those provisions 

are in the bill that you have proposed about income-based repayment. 

Mr. PETRI. Ms. Mishory? 

Ms. MISHORY. Sure. I mean, I think that for students who are 

trying to figure out their options when they leave school, having a 

simple, streamlined process can be huge and can be very helpful. 

We were actually down in Miami last week doing roundtables with 

students and talking about the kinds of information that they need 

and what they know about different programs, and none of the students we talked to had actually heard of income-based repayment. 

And, so you know, that is the problem, right? This is a program 

that can be very helpful to a lot of students and we need to make 

sure that we are providing this policy in a way that students know 

that it is there for them so they can understand what types of risks 

they may be taking on and really encourage them to go to school 

and take out loans when they need to. 

And then when they—on the back end, when they might be 

struggling to repay those loans, we do face a high default rate for 

student loans and we want to make sure that we can cut into that 

by doing things like streamlining this process. 

Mr. DELISLE. So I hear a lot of people say, when we talk about 

our student loan system in the United States they point to other 

countries, like the U.K. or Australia, that have income-based repayment programs, and then they say, ‘‘Why don’t we have something like that?’’ We do. We do have something exactly like that, 

it is just not automatic. 

So I think when people ask that question what they are saying 

is, ‘‘Why don’t we just make it automatic then, if we already have 

it?’’ 

So what we have done is we have—I mentioned in my spoken 

testimony about the Department of Education automatically enrolling people in the 10-year standard repayment, which is basically 

your highest monthly payment, and then we sort of let them maybe 

find their way to the more generous, more beneficial options in the 

loan program. But if they are there, why not just start people in 

those programs to begin with and why not just make that the only 

program, especially since it provides people who need the most help 

with it automatically? 

Now, there are people using the income-based repayment program. People who have figured this out, that this is available, are 

graduate students. The average outstanding loan balance in income-based repayment right now is about $57,000. 

Now, we heard at the beginning the average amount of debt that 

an undergraduate leaves with is around $25,000, and in fact, the 

federal government caps how much an undergraduate can borrow 

well below $57,000. So what we have got is we have got a program 

here where the graduate students have figured it out and the people who really need the help—the undergrads—aren’t necessarily 

using the program. 

Ms. CONKLIN. Mr. Petri, I want to echo what my group has said 

and again, what we—I said to the chairman that there is a remarkable amount of consensus in the reform community for the proCEWDOCROOM with DISTILLER

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posals that, frankly, you were an early leader on, and so I commend you for that. 

I am actually going to respond that one of the reasons for the income-based repayment and the simplification and the default option we talk about is to put student success at the center of what 

we do. We see there is some really good data out of Wisconsin looking at individual students, and at least 20 percent of Pell Grant 

students fail to even take a single loan and up to half of students 

do not take the amount they are eligible for. 

What does that mean? They are much less likely to go full-time. 

They are much less likely in that first year to make the progress 

they need to make that we know is associated with success. 

Some of them are much less likely to go to the more selective institutions we know they are likely to attend. That is that undermatching phenomenon you may have been reading about lately. 

So really understanding early, whether you are a traditional or 

nontraditional student, that this is a single loan repayment option, 

and what your repayment terms will look like is, I think, a way 

to put student success at the center of our loan programs. 

Mr. PETRI. Thank you, thank you all. 

I just have 20 seconds left so I just want to make one comment 

that was touched on, I think, especially in Ms. Mishory’s testimony, 

and that is where and how, if we simplify the program, we focus 

the subsidies that—there are inevitably going to be subsidies that 

people who just can’t repay their loans, and if—and whether they 

are—and how we should be—if we should be applying subsidies 

also to higher-income people and others because they are doing 

something that sounds good, but—anyway, that is a discussion for 

another day. 

But if we have a pot of subsidies, we should have a rational discussion as to on what basis they should be given rather than just 

have an automatic preference for some people who, when you have 

analyzed the situation, may not deserve it. 

Chairman KLINE. Gentleman’s time is expired. 

Mr. Bishop? 

Mr. BISHOP. Thank you very much, Mr. Chairman. You know, 

you said before the—who are the people that are opposed to one 

grant, one loan, and I hate to see you disappointed, Mr. Chairman, 

so I thought that I would— 

Chairman KLINE. Will the gentleman yield? 

Mr. BISHOP. Of course. 

Chairman KLINE. I knew I could count on you. 

Mr. BISHOP. Thank you, Mr. Chairman. 

But before I talk about my skepticism regarding one grant, one 

loan, one work, I sincerely do want to thank you for this hearing 

and thank the panel. This has been great. Lots of great ideas. 

I think in all seriousness, Mr. Chairman, we should be doing a 

couple of these. Because there are lots of issues here. We are not 

going to be able to cover them all in one hearing. 

So thank you all very, very much. 

And, Dr. Baum, I am going to kind of focus on you because you 

are proposing the elimination of the campus-based programs, 

which, I will say respectfully, I think is a bad idea. And let me tell 

you why. 

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I used to administer campus-based programs. I was a financial 

aid director for 7 years way, way back. And what I found was the 

most helpful about the campus-based programs is that they were 

a way of, you know, what I always call putting out fires. They were 

a way of dealing with students whose circumstances had changed, 

or that the traditional programs, the external programs, the entitlement programs didn’t give them what they needed. 

And so to give the financial aid officer the discretion that he or 

she could then apply to save enrollments—I mean, we have two 

problems here. We have an access problem, and I think you could 

make an argument that one grant, one loan, one work would be assessed with an access problem, but we also have a completion problem, and I think if you were to eliminate campus-based there 

would be a serious concern with respect to completion. 

Because if you look at it, the traditional private, not-for-profits, 

they discount aid, they have institutional aid, so they could address 

that issue. But the state schools don’t really discount aid, and so 

unless they have endowment income or, you know, philanthropy, 

they are not going to have their own resources to provide. And the 

for-profits do very little in the way of discounting aid or what we 

would call traditional institutional grant aid. 

So I am concerned that in the overall heading of simplifying, that 

what we are really going to do is deny a resource to the campus 

aid officer that has used it, you know, millions of times a year to 

save enrollments. 

I would like to hear your comment. 

Ms. BAUM. Well, I would note that I am not proposing taking this 

money away from campuses. I am proposing distributing it to campuses differently. 

Right now some campuses get a lot of the campus-based money 

just by historical reasons, and many of the campuses that enroll 

many needy students don’t get much of it. So if we allocate the 

funds to institutions based on their success with low-income students, they will have the opportunity to use the money to put either directly into students’ pockets or to support the students— 

Mr. BISHOP. If I may, but if we go to one grant, one loan, one 

work, which is what I am hearing, one grant presumably is Pell, 

right? And unless we are going to restructure the way we award 

Pell, then, that is going to money that, I mean—and yes, we are 

going to add to the funding for it, but that is money that is going 

to be available to the student up front. 

Ms. BAUM. No, so my proposal would put money in the institutions that they could use to give institutional grants to students. 

It wouldn’t interfere with the— 

Mr. BISHOP. I am not trying to be argumentative. So you are not, 

then, advocating one grant, one loan, one work? 

Ms. BAUM. In my view, I am advocating one grant to students 

from the federal government. 

Mr. BISHOP. Now I am thoroughly lost, but with this as a discussion perhaps we can continue. 

I want to go to a point that Ms. Mishory made, which I think 

is really, really important and none of us should lose sight of this. 

What you said—what I heard you say—was that the aid process 

ought to be simpler. I think we all agree with that. But we ought 

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not to reduce supporting—we ought not to reduce the total amount 

of student financial aid that is available. 

And I think what is important for us to all recognize is that is 

precisely what we are doing. We are reducing the total amount of 

aid that is available to students. 

Current law: Pell Grant will go down by $310 next year and $400 

the year after unless we change current law. Sequestration is current law. That has resulted in a $37 million reduction in SEOG in 

the current year, and a $40-some million reduction in SEOG next 

year. College Work Study: There has been a $49 million reduction in College Work Study this year, and next year another $79 million 

unless we change current law. That is what we are dealing with. 

And current law, the Perkins Loan program goes away in 2015. That is $1.2 billion a year taken out of the student loan program. 

So we can simplify all we want, and I would urge us to do so, 

but let us not do so at the cost of the assistance that students very 

badly need. Yet, that is precisely what we are doing and we ought 

not to let a focus on simplification be, in effect, a fig leaf for what 

we are really doing to students, which is taking away resources. 

With that, Mr. Chairman, I will yield back. 

Chairman KLINE. I thank the gentleman. 

Ms. FOXX? 

Ms. FOXX. Thank you, Mr. Chairman. 

At a recent meeting, I had an agreement with Ranking Member 

Miller, and I have to say that I have a little bit of an agreement 

with Mr. Bishop in terms of keeping campuses involved in ways 

that they are dealing with students. Having worked on a campus 

myself and worked with—I wasn’t a financial aid director, but I 

worked with Upward Bound, special services, and orientation and 

academic advising— 

Mr. BISHOP. Will the gentlelady yield? 

It is only a very select group that are chosen to be financial aid 

directors. 

Ms. FOXX. But I think he makes a really good point about the 

need to keep campuses involved with what is happening with the 

students in terms of aid. 

But, Ms. Conklin, I would like to ask you a question. The committee has been grappling with the question of what information 

the federal government should make public to help students and 

families make informed decisions about their postsecondary education options, and there are certainly plenty. 

If we were to drill down to five or six data points that are absolutely necessary for students to have to make good decisions, what 

do you think those points would be? And maybe a little bit about 

how they could be presented to the students? Some people have expanded a lot on what should be made available, but just brief comments about that. 

Ms. CONKLIN. Thank you for your focus on transparency. Again, 

the Hart research that we did with the Winston Group showed that 

this was the most important issue to voters—was to increase transparency and improve their decisions. 

HCM led a project called the Voluntary Institutional Metrics 

Project and we had a group of, very diverse group of institutions— 

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not-for-profit, for-profit, and public—come together and agree on 

five metrics. Those are useful metrics to answer your question. 

The first are progression and completion metrics—the kind that 

a number of states have voluntarily agreed to report already; loan 

repayment, input-adjusted of course, if possible; cost per degree or 

net price, two sides of the same—two important metrics; recent 

wages of recent graduates; and a learning metric. And so I would 

start with that. 

I think from an investor perspective at the federal level you also 

need to know what—regularly how many—the percentage of Pell 

students an institution enrolls and how well they do, what is their 

completion statistics. 

Ms. FOXX. Thank you very much. 

Mr. Delisle, your testimony raises some interesting suggestions, 

but you didn’t really touch upon ideas about how to encourage completion. And I realize in this whole debate we have been having in 

the last couple years how the emphasis has changed from access 

to all of a sudden everybody is interested in completion. 

Is there a way for the federal government to encourage college 

completion with the needs of nontraditional students, many of 

whom have to balance family or jobs with their academics? 

And I am going to give a prize to anybody who can come up with 

a way to stop using the word ‘‘nontraditional students’’ because 

what we talk about as traditional students make up like 27 percent 

of the student body now, and something is wrong with this picture. 

So anybody on the panel, if you can come up with a good word, I 

am looking for one. 

Mr. Delisle? 

Mr. DELISLE. So, I wanted to keep my testimony today—you are 

correct, I didn’t mention anything about incentivizing completion 

explicitly. I wanted to keep the testimony very much so focused on 

the message of simplification and highlighting the complexities 

that exist in the program now. 

Also, when you start talking about adding in provisions that 

might incentivize completion, you tend to start to make the program more complicated rather than simplify it, so there is a very 

difficult tension there between those two goals that I—it seems like 

my testimony skirts them a little bit. 

But I would point out that there are parts of my recommendations that would implicitly incentivize completion,—for example, 

the messages around loan limits. For example, you know, parents, 

for example, can borrow whatever the school charges in federal 

loans through the Parent PLUS loan program—whatever the 

school charges and for as long as the student wants to attend. 

There is no aggregate; there is no annual; there is no lifetime limit 

on the amount of money the federal government will lend a parent 

whose student is attending an undergraduate school. 

Well, putting some limits on that or eliminating that program 

and putting higher loan limits in the undergrad limits sends a message that there is a limit to the amount of time you can use federal 

aid to attend college. There are other examples where students can 

borrow for their full cost of living even if they are only attending 

part time. Well, that seems not to make sense and that is another— 

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Chairman KLINE. I hate to interrupt, but the gentlelady’s time 

has expired. 

Ms. Bonamici, you are recognized. 

Ms. BONAMICI. Thank you very much, Mr. Chairman, and thank 

you for holding this important hearing. Thanks to you and Mr. 

Hinojosa. 

Thank you to the witnesses for being here. I actually worked my 

way through community college, college, and law school using a 

combination of grants, loans, and Work Study, and although that 

was more than a few years ago, I think you have certainly made 

the case that simplification is needed. 

But I have to say that simplifying the financial aid process is an 

important step, but only one step in helping more students access 

college, and how we simplify, of course, is what we will be discussing, and whether that simplification results in more or fewer 

students attending college is going to be important. 

But as a committee we should always be looking for new and creative ways to help lower the cost of college, and that includes allowing colleges to work together to increase institutional needbased aid, and also doing what we can to promote reversal of the 

trend of state disinvestment in higher education. 

I want to start by asking Ms. Mishory—and I agree with you 

that too many students are taking on too much debt, and they need 

to be included in this conversation so thank you for your work. Is 

there any part of the financial aid system right now that does a 

good job of listening to students’ needs? And if so, will you briefly 

discuss that? 

Ms. MISHORY. Sure. I mean, I think that the Pell Grant program 

itself is a very important program. It helps millions of students access higher education who wouldn’t otherwise have been able to do 

soand it has been a bedrock of the program. So the Pell Grant program is incredibly important for students and I would urge the 

committee to continue and to really prioritize that as we are looking at reauthorization. 

You know, I think that there are—programs that I think have 

a lot to offer but we could also think about how we could actually 

improve them, and the Federal Work Study program is actually 

something we have been looking at a lot. There is a lot of potential 

there. 

You know, there is the potential to be working and actually getting experience while you are studying and really combining those 

two processes. I think right now—and Dr. Baum mentioned this 

earlier—the Federal Work Study program isn’t always targeted in 

a way that we would like to see it targeted. Some institutions 

might get it because they have been around for a long time; some 

higher-earning families might get it when we really want to see it 

targeted at lower-and moderate-income families. 

So I think there are things that are absolutely working for students. There are things that we can improve. And there are certainly things we can simplify. 

Ms. BONAMICI. Great. Thank you. 

And I actually have a bill, Opportunities for Success, that will 

help Pell Grant-eligible students get internships that will help 

them get job experience. So we can talk about that at another time. 

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So many of you are likely aware that my home state of Oregon 

recently passed legislation to study an innovative proposal, Pay it 

Forward, Pay it Back, and we have, actually, representatives from 

Portland State University with us today. So under this system, 

which Oregon is studying—has not implemented, just to make that 

clear—, students would pay no upfront cost for tuition but then 

after graduation would pay back a certain percentage of their income for a certain length of time. All of these elements are going 

to be considered in the study. 

And frankly, I applaud our state legislature for passing that legislation to embark on that study because we really need some bigpicture, creative thinking about better ways to make college more 

affordable and more workable for students. So, I want to hear your 

thoughts on how both Congress could think more creatively about 

affordability and retention, and how can we encourage institutions 

of higher education to do the same? 

And I want to start maybe with Ms. Conklin. And I know that 

your report—your second recommendation is for spurring innovation, so can you talk about some—let’s think outside the box. What 

are some other ideas to help with college affordability? 

Ms. CONKLIN. So there were three—thank you very much. I appreciate that question and agree with you that that idea in Oregon 

is big and creative, and I understand that the study is being carefully watched nationwide. 

A couple ideas. One I would talk about just today and refer you 

to the report for a couple of others. But the first one is to recognize 

that a significant way we lose students, and they don’t succeed and 

the significant way that college becomes more expensive for them, 

is when they spend a lot of time in remediation. 

And so one of the innovative ideas we proposed is to create a new 

Pell-ready grant worth 1,800; test it in five or six states; rigorously 

evaluate it; portion out the money on the basis of how students attain those college-ready skills; allow them to be regularly tested; 

create some competition for providers—have the states select those 

providers; really kind of set aside 80 percent for low-income students in the high schools, 20 percent for adults who need basic 

skills—we saw the OECD report yesterday, there are 23 million 

Americans who need basic skills. 

So try this way to get students the remediation they need at a 

much lower cost than when at the full price in a traditional public—a postsecondary institution. 

Ms. BONAMICI. Terrific. 

And my time is about to expire and I want Ms. Mishory to respond, as well. Thank you. 

Ms. MISHORY. Sure. And we have looked at the Pay it Forward 

proposal and I think that, you know, it is a bold, innovative idea. 

I think we—there are both positives and negatives to the idea. You 

know, I think that we are also carefully watching that. 

But I think we have looked at some ideas around campus aid and 

how we can better send some of that aid to schools that are doing 

a better job with students, and so that is something that we are 

particularly interested in. 

Ms. BONAMICI. Thank you. 

Chairman KLINE. Gentlelady’s time has expired. 

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Ms. BONAMICI. Yield back. Thank you, Mr. Chairman. 

Chairman KLINE. Mr. Messer? 

Mr. MESSER. Thank you, Mr. Chairman. I appreciate the opportunity to be here and this important hearing. I certainly understand the importance of the federal student loan program; I am 

very much a product of the federal student loan and student financial aid program. Stafford loans, Perkins, Pell Grants, all those 

things were part of my life. 

And I want to maybe give Mr. Delisle—is that right?—an opportunity to finish his answer from just a few minutes ago and just 

say this: I think one of the things that has changed in the way we 

approach federal student aid or at least needs to change is we had 

a system that was always based on access, and that made sense 

because by and large the numbers were that if you had some college you were going to be better off economically in your life than 

no college at all. Clearly that is changed now, and if—unless you 

have a degree of completion in a degree that adds value in the marketplace, you are not going to do any better academically—I mean, 

you are not going to do any better economically than you would 

otherwise have done. 

And sadly for many students, if you—leave with tens of thousands of dollars in debt and have no degree then you are, by definition, much worse off because you don’t have a better economic opportunity and you have a lot of debt. And so, I think reforms that 

drive us towards completion are at least something we ought to 

give strong consideration. 

So invite Mr. Delisle to finish, maybe, your answer from a 

minute ago, and any others on the panel that would like to talk 

about what we could do to—or to motivate completion. 

Mr. DELISLE. Sure. What I was talking about was that there are 

places where, you know, I think that we have probably gone overboard or haven’t thought very carefully about the signals that we 

send to people in the amount of aid that is available and when it 

is available and under what circumstances that are perhaps too 

open-ended. So, for example, on the students who attend part time 

but then can borrow the full loan amount as if they were attending 

full time, so essentially what they are doing is they are using up 

a huge chunk of their loan eligibility for cost of living or whatever 

it might be rather than paying tuition, and we cut that off, and 

then on the graduate side we just let it go and go and go and go. 

Mr. MESSER. Sure. 

Ms. BAUM. I would like to add that I think that discussions about 

how to structure student aid programs to incentivize completion 

are important, but we shouldn’t just take as given where students 

are. Students have to select programs and institutions that are appropriate for them, and right now students don’t have the information or the assistance in doing that—particularly older students 

who don’t have high school guidance counselors, who don’t have 

people around them to really help them. 

We need to make sure that students have assistance in making 

the decisions about what to study, where to study, and when to 

study, and then they will be more likely to complete. 

Ms. MISHORY. I would just like to echo the comment on counseling. I think that it can’t be underscored enough. I think right 

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now our high school counseling rate is perhaps one counselor to 

every 476 students in a public high school, and so a student really 

trying to make good decisions for themselves is not getting the kind 

of help that they need. 

Ms. CONKLIN. Mr. Messer, I think it is important to recognize 

that failing to complete a college credential is not a demographic 

destiny, that it is due in some part to what public policy pays for. 

A recent survey out of Complete College America, based in your 

home state, found that fewer than a third of full-time community 

college students are actually taking enough courses to graduate on 

time. They are taking the Pell Grant and they are taking our cue 

that 12 credit hours is sufficient. So in a sense, we are not telling 

them that the expectations are much higher than you realize. 

And in fact, because of the way we price college, where we are 

doing it a la carte by credit, you actually are penalized and you get 

a bigger rebate if you take the fewer credits than if you took the 

15. So we really ask you to examine what are the incentives based 

in what we define as full time. 

Mr. MESSER. And not knowing how much time exactly I have 

left, I would just make one other quick comment. If we have time 

I hope to get your response. Hopefully we can explore it in a different hearing. 

I think a second area is that many of these programs tend to 

only incent four-year degrees in the right—you know, in sort of the 

traditional college where you show up and go to four homecomings, 

you are carrying a backpack. And at least in my district, which is 

19 mostly rural counties with agriculture or manufacturing-based 

economies, folks that could take a technical degree or maybe even 

a trucking course that gave them a 3-month trucking course but 

gave them a job right away and the ability to pay back many of 

these programs right away—what could we do to look at broadening the array of programs that these financial aid is eligible for? 

Ms. BAUM. Well, students are actually able to use their financial 

aid for those programs now. It is just that they don’t know how to 

pick the right program. Some of them are great and some of them 

are not. 

Mr. MESSER. I mean, I will tell you, our community colleges and 

others have said that—have talked to me directly about the restrictions on those kinds of programs. So you are saying you don’t believe those restrictions are there? 

Ms. BAUM. As long as they are credit-bearing. There are noncredit courses for which aid is not available and that is an issue 

at community colleges. 

Mr. MESSER. Okay. 

Chairman KLINE. Gentleman’s time has expired. 

Mr. Pocan? 

You know, new members to the committee are limited to 30 seconds, so— 

[Laughter.] 

Mr. POCAN. Thank you. I try to do that at the beginning, be very 

brief to make up for now. 

I do just want to say, if I can, before I start with the questions, 

I really am glad to be on this committee, not only, as mentioned, 

my background—I have been a small business owner for 25 years, 

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it is also of a union shop, so when it comes to labor and employment issues, hopefully I can bring some of that background to the 

committee. 

But also, I have about 75,000 students in my district. Not only 

do we have the flagship University of Wisconsin—flagship of our 

system, a world-class university, but we also have private colleges 

like Beloit College, which were started before our statehood, 1846. 

We have Edgewood College, Madison College, a technical college, 

many small private colleges. So I’m especially glad to be on this 

committee and I thank you very much for that opportunity. 

I think one of the questions or areas I would like to get to, 

when—I went around this past period and I was at Beloit College, 

and I was at U.W. Madison, I was at a number of high schools, I 

am going to Edgewood College this Saturday, so I do spend a lot 

of time talking to students and folks going to universities. 

You know, we talk about the three parts. One is the affordability 

of school, and I think there is still a lot more conversation around 

that, although, Ms. Mishory, I really appreciate the comment you 

said about public universities. When we got the economic hit and 

the states—49 states got hit—I was the chair of a finance committee at the time. We did decline our support and we have continued to decline our support to our state university, like we have 

seen in many other states, and that has had a really big impact. 

We talk about the availability of financial aid, making sure we 

have got loans available—and as Mr. Bishop said, things like Pell 

Grants and things that are being hit because of the sequester. I am 

a Pell Grant recipient, loan recipient. That is how I got through 

college. It is real important. 

But one of the things that came up, the third area I talk about, 

is how you make sure that you are able to pay for those loans afterwards. When I went to school it wasn’t as many years you had to 

pay it off. Between 1982 and 1986 when I went to school, you 

know, it was a little bit easier. 

Now they have become longer-term loans, much more debt. And 

we have got a group in Wisconsin that has helped us look at the 

thinking around this a little bit. I talked to a student when I was 

home this last period who has some loans at 6.8 percent, literally 

left college to go join the military so they could come back and get 

a free education after that point, but they still have the 6.8 percent. 

And I think one of the issues that came up from a group in Wisconsin and we have done a bill on, and it hasn’t really been addressed but I would love to hear your perspectives, is the potential 

to be able to make it easier to refinance loans. You know, one of 

the things is if people are paying either higher interest rates or 

longer-term loans they are having a used car instead of a new car 

and not helping the economy; they are renting rather than buying—again, not necessarily stimulating the economy. 

And, Ms. Mishory, you specifically talked about that 15 percent 

not paying, but I would love to hear any of your perspectives on 

the idea of maybe making it easier to refinance at current rates 

and what that might be able to do to help overall. 

Mr. DELISLE. Well, first of all, there—you can refinance the loans 

just like you can a mortgage. There is no prepayment penalty on 

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a federal student loan, so you can take out a loan from somebody 

else at a lower interest rate and pay off your entire federal student 

loan without a penalty. So in that regard, there is no barrier to refinancing the loan. 

Now, the issue is you have to find someone who wants to make 

you an unsecured loan— 

Mr. POCAN. Right. 

Mr. DELISLE [continuing]. At a fixed interest rate around 4 or 5 

percent for the next 10, 20 years. Nobody wants to do that with 

their own money. So in that regard, there is no opportunity to refinance the loan. 

So what you would have to do essentially is provide borrowers 

another chance to get a different interest rate on their current student loan. But what you are doing, then, is you are saying the borrower is receiving a subsidy and let’s just increase it. But then the 

question becomes, well, how much and why and for whom and how 

do you determine that. 

And then I would argue that if you can pay back your loan based 

on your income, which everybody can in the federal student loan 

program, then the payments are, by definition, affordable and the 

interest rate does not dictate whether or not you can make your 

payments. 

Ms. MISHORY. I would add to that—I would say that there certainly are students that are facing high interest rates on their federal loans, which is concerning. I just wanted to add and make the 

point there is also a lot of students that are facing incredibly high 

interest rates on their private loans, and so that is something to 

think about, as well. And those interest rates, actually, they are 

not capped so they can be sky-high, they can be double digits. 

So that is something, as you are thinking about refinancing interest rates, to think about as well. 

Mr. POCAN. Okay. 

Ms. BAUM. If we had interest rates moving with the market on 

loans then you wouldn’t run into this problem, and it is upsetting 

that students are now locked into loans with high interest rates. 

When interest rates are high in the economy then we might be concerned about some people, depending on when they went to school, 

having a subsidy because they have a low interest rate locked in, 

whereas people who go to school when interest rates are high end 

up with a higher interest rate. 

Mr. POCAN. Thank you. I am going to yield back. 

Chairman KLINE. Welcome, again, to the committee. Anybody 

who yields back is a rarity and we are glad to have— 

Mr. POCAN. I am trying to get bonus points today. Thank you. 

Chairman KLINE. You just got them. 

Mrs. Brooks, you are recognized. 

Mrs. BROOKS. Thank you, Mr. Chairman. 

And I, too, like Congressman Messer, was a recipient of student 

loans, but one of the important parts of my loan package in both 

undergrad and graduate school was work study, and I would like 

to talk a bit more about work study. And in fact, I was a work 

study student in the financial aid office, which was an interesting 

place to be a work study student both in undergrad and in my first 

year of law school. 

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But yet, I am curious about what your thoughts are with respect 

as we are all talking about reforming the student loan, you know, 

programs, where should the discussion—there has been very little 

about work study and the advantages of work study, not only particularly for younger people—the time management skills, the actual working, you know, the work experiences they can get. And so 

I am curious what kind of—starting with you, Ms. Conklin, where 

are we with respect to work study? 

And as you probably know, I have come from Ivy Tech Community College prior to running for Congress and coming here, and 

my other issue that I am curious about with respect to the older 

students who have jobs, as many of the community college students 

have jobs, how does work Sstudy, where they don’t have to repay 

a loan when you get a work study-type of grant, how does that 

work for those students who are working outside of school? 

Ms. CONKLIN. Mrs. Brooks, with all respect, actually, our proposal did call for merging all of the different grant programs into 

one grant program, so in that sense we were silent on work study 

or explicit that we really think the extra dollars should go into Pell 

Grants. But I know that my colleagues at the table have thoughts 

about that and so I defer to them. 

Ms. BAUM. The work study program is not very well funded and 

not very many students receive it. It is about 10 percent or a little 

bit more than the number of Pell Grant recipients. So if we really 

thought Work Study was terrifically important and all Pell Grant 

recipients should have access to subsidized work on campus, we 

would have to dramatically increase the work study program. That 

doesn’t seem to be in the cards. 

Right now, as I said before, the funds are allocated to institutions in a sort of irrational way, and one of the things that work 

study—I mean, it is great for students to have jobs, but really, 

many students are working much more than they could under work 

study and they need to earn more than they can under work study, 

and for them this is earnings. They don’t care that the federal government is paying part of the money. 

These are earnings and I don’t think that it needs—it should be 

considered part of what they are given to help them pay; this is 

what they are earning to help them get through, and they need 

other aid to meet their financial need. 

Ms. MISHORY. We think that the federal work study program has 

a lot of benefits and can really help a lot of students. I think that 

there are also a lot of ways that we can improve it. We can make 

it better-targeted; we can make sure that it is actually going to students who need it the most. Right now it is not always going to students who need it the most and we can improve that formula. 

We think that it can go to schools based off of who they are serving and not necessarily based off of how long they have been in the 

work study program, which is how the formula is set now. And we 

think it can go to schools that are providing programs to low-and 

moderate-income students who are actually getting really good 

skills and learning—basing their work off of also what they are 

studying at school. 

So there are definitely ways that we can improve this program 

and make it work even better. 

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Mr. DELISLE. I think I caught you saying that you got the work 

study while you were going to law school? 

Mrs. BROOKS. I believe. My recollection. I could be wrong on that. 

That was a long time ago. 

Mr. DELISLE. So this brings up a really good point. The campusbased aid programs are available to graduate students, and there 

is not a lot of money to go around in the campus-based aid programs. And there are plenty of undergraduates who could benefit 

from work study, yet the federal government is providing work 

study to graduate students, which seems like a really sort of the 

wrong set of priorities. 

Remember, these are students who already have an undergraduate degree. So you are essentially subsidizing people who already have an undergraduate degree. 

Secondly, work study is means-tested, correct? You are providing 

a means-tested benefit to a graduate student? Does anybody know 

a graduate student who isn’t poor? I mean, that is sort of a—it is 

sort of a crazy concept to think we are going to have a means-tested program for people in graduate school. 

So I think that there are ways to reform the campus-based aid 

programs. One place to start is stop providing them to graduate 

students. 

Mrs. BROOKS. I am curious, however, whether or not you all 

agree in the benefits of a work study program or are you opposed 

to work study? I am unclear. I heard some of you say that you believe that there are benefits to it, but I am curious, rather than, 

you know, increasing grants and loans and so forth, is there not 

a benefit to work study? 

And I am curious why it was eliminated from your study, Ms. 

Conklin, just out of curiosity. 

Chairman KLINE. The gentlelady’s time has expired, but we 

would like the answer to that for the record if we could. 

Thank you very much. 

Mrs. Davis, you are recognized. 

Mrs. DAVIS. Thank you, Mr. Chairman. 

Thank you to all of you. 

You know, one of the things that you have mentioned, I think, 

throughout the discussion is that students need more information. 

We know that there should be more sophisticated databases and 

Web sites that students can go to, and I know there has been an— 

I think we have had some discussion of that here in the committee, 

as well—something that is a little more foolproof, I think, and really cites the right metrics or, you know, that are important for students, that are agreed upon, kind of a universal consensus among 

schools. 

But I also get the feeling that, you know, there ought to be some 

other way of doing that. And, do you have any ideas about that? 

And let me just share very quickly. I had a number of folks come 

to me the other day on veterans issues and veterans support within 

schools, universities, colleges, community colleges, et cetera. And, 

there is a feeling that more education is needed to really understand how—whether it is the additional dollars that they are receiving as a result of being veterans or other means, that they 

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don’t have that information. And so it is very hard to really make 

good comparisons. 

Is that as big an issue as—I think you have mentioned, but 

maybe that is not the focus of this discussion. How would you do 

that? Because one of their interests was in having a mandated 

course—maybe not even a—well, could be a full semester—if a university takes dollars then they ought to be providing that in a way 

that students can get that information where they have counselors 

on hand there, it is more than a Web site, to be able to make those 

decent decisions. 

What do you think? I mean, is that something that—because certainly tuition is the bigger issue here but we are not going to answer that question. I know universities are working on that when 

it comes to the total package that students are having to deal with. 

Ms. MISHORY. So I agree that tuition is a huge issue and investing in the aid programs up front is a huge issue, but obviously 

counseling and providing information is also a huge issue for students. You know, I think that—we were talking to students the 

other day and one—you know, one said, ‘‘You know, I am studying 

biology and I think this is going to get me the financial security 

I need but I just don’t know.’’ She didn’t have the information 

about her school, her program, the labor market where she was 

looking to go. 

And so, you know, there are some Web sites out there and there 

are some tools out there. They are not always great or they are not 

always provided— 

Mrs. DAVIS. How would you do it? 

Ms. MISHORY [continuing]. To students in ways that they know 

that they are out there. So I think it is really important to be 

thinking about first of all getting the kind of data that students 

need to make good decisions, providing it in a way that is clear for 

students and that students can also access very easily. You know, 

there are some—there is a bill in the Senate that looks at how we 

can provide consumer-tested information to students, so we actually know when you are providing it at a certain platform it actually works for that student and they can understand their options; 

ensuring that maybe if schools aren’t providing the best outcomes 

they—you can actually trigger a system where you provide more 

counseling to students and they are required to provide more counseling. 

So I think there is a variety of ways to do it, but I think that 

including student feedback in that process is incredibly important. 

Ms. BAUM. Unfortunately, I don’t think there is a foolproof method, but one thing is there are lots of websites out there that have 

sort of basic indicators and lots of information, and the sophisticated students go to those websites and the students who really 

need the information don’t. So we need to think beyond just the information. It would be helpful if we didn’t focus so much on what 

do first-year graduates earn, because that is not really a very valuable piece of information for people to make choices. 

But there is a lot of information about how if you really want to 

get to students, if you send them a text message with a small 

amount of information they will pay attention to it, whereas if you 

put something complicated on a Web site they won’t. So we need 

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to figure out not so much how to provide more information as how 

to provide it in ways that students can process it and that the students who need it most will get personalized help to make decisions 

about the best course for them. 

And it is a risky investment. It is a great investment to go to 

school, but it is not going to pay off for everyone and you can’t 

know when you make a decision 100 percent that it is going to pay 

off. 

Ms. CONKLIN. So Mrs. Davis, I think you have hit on a point of 

consensus among the community, as well, that simplification by 

itself won’t replace the need for good counseling. In our Doing Better by More Students you can find our recommendation that actually we want to see local, third party, independent groups provide 

this counseling, that we cannot rely entirely on institutions to provide counseling about whether you should borrow and how much. 

That doesn’t encourage that kind of good choice that we are looking 

for. 

Mrs. DAVIS. Yes. 

Mr. Delisle, did you want to say something quickly? 

Mr. DELISLE. Well, I just wanted to say that, you know, one of 

the recommendations, you know, that we put out—and there is 

some consensus around this, around making the income-based repayment program the only repayment option or at least the automatic repayment option. And I think that is important when people 

are making decisions about what school to attend, will this work 

out, will I be able to make payments, to be able to tell them, ‘‘Well, 

your payments will automatically be calculated based on your income and the loan should be affordable.’’ That should take a lot of 

pressure off on knowing what is available and how to make decisions. 

Chairman KLINE. Gentlelady’s time has expired. 

Mr. Thompson? 

Mr. THOMPSON. Thank you, Chairman, and thanks for this hearing. You know, we are talking today about providing—we’re talking 

about America’s competitiveness, actually, in terms of making sure 

that folks have access to the education to—so we have a qualified 

and trained workforce. 

I want to start out my first question, Dr. Baum or Mr. Delisle: 

One of the questions I often have is how we as policymakers can 

empower students to be good consumers in postsecondary education, in higher education, you know, whether it is a certificate 

program, whether it is associate degree, whether it is a four-year, 

whether it is graduate studies. 

So beyond the tools currently available by the Department of 

Education, what recommendations could you make? 

Ms. BAUM. Well, one of the things, as I said before, I said I think 

that people really need personalized information so that they can 

make choices fitting their own circumstances, and that is a hard 

thing for the government to figure out how to provide, but they can 

fund third parties to provide better information, really understanding how students process that information. 

It is also true that students assume that if they are allowed to 

take their federal aid to an institution, that institution basically 

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ment should figure out how to make sure that it doesn’t grant that 

approval to institutions that serve very few students well. 

Mr. DELISLE. So there is a provision in federal law right now 

that requires colleges and universities to report the graduation rate 

of Pell Grant recipients, which is a really—that is an important 

factor. That is an important piece of information that if I have a 

Pell Grant I want to know how many people like me are going to 

graduate from this institution. 

Except the—universities and colleges don’t comply with this 

rule—not very well. They bury the information or they don’t even 

know that they have to provide it. 

And so it would seem that there are places where the laws that 

are already on the books could essentially bebeefed up and the enforcement could be improved such that this information is made 

available. I think that is one example where we have already had 

those ideas, they just haven’t been implemented effectively and 

more attention needs to be given to them. 

Mr. THOMPSON. Okay. Thank you. 

I would argue that we are measuring the wrong metric. It is success in life; it is where that education takes those folks to. Measuring graduation doesn’t necessarily constitute success nor being 

an ability to pay off loans, and so—I do believe that—I agree with 

the premise of we have got to do some measurements, but I don’t 

think we are measuring the right things if we just stop at graduation rates. 

Ms. Conklin, I noticed that the group assembled by HCM had a 

lot of diverse perspectives on how—best to improve student aid. I 

was curious, what were the guiding principles that led everyone to 

come together around the one loan and one grant proposal? 

Ms. CONKLIN. Thank you. So the coalition itself, the national 

leaders I referenced, some of them, they came together around 

three overarching principles and released their report in January: 

simpler and more transparent aid; more innovation to promote 

lower-cost options for today’s students; and a shared responsibility 

for completion among states, students, and institutions. 

The technical panel of experts, some who had decades of experience with financial aid, some economists, former congressional 

staffers sitting at the witness table with me, sat around and said, 

‘‘Now, taking those guiding principles, how do we translate that 

into a set of specific recommendations?’’ And so we—they advised 

the coalition, helped them come to that consensus on those three 

overarching principles, and then they tried to translate it and that 

is the technical report you have in front of you. 

Mr. THOMPSON. All right. Thank you. 

I have about a minute left. I want to go back to Mr. Delisle. 

I am interested in learning more about the streamlining of repayment options, including an idea out there to have student loan 

payments tied to income, withheld automatically from the borrower’s paychecks. Does income-based repayment plans have to be 

implemented that way, or are there other ways to do it? 

Mr. DELISLE. The income-based repayment plan that we have 

right now is not payroll withholding. It works like all the other repayment plans, where you have to submit your payment. You can 

do that automatically through, you know, auto debit or something 

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like that, but it does not come out of your paycheck like your income taxes. 

Doing payroll withholding may be a better way to collect payments in that people sort of repay their loans somewhat inadvertently, simply by working, but there are a lot of administrative challenges to doing that and I would argue that the main hurdle to 

that or the test on whether or not you can do that is if that system 

is as easy or easier for the majority of borrowers. 

Mr. THOMPSON. Thank you, Chairman. 

Ms. FOXX [presiding]. Thank you very much. 

Mr. Courtney, you are recognized. 

Mr. COURTNEY. Thank you, Madam Chairman. 

Mr. Delisle, reading your somewhat scathing comments about 

graduate student programs—you know, and I think, you know, 

there is some valuable insight that we can take from that. There 

still, though, is a thing that nags me, which is that we know right 

now in the workforce, particularly in areas of health care pediatric 

subspecialties, there are acute shortages in terms of making sure 

that we have got pediatric psychiatrists, you know, specialties up 

and down the profession. 

And if we were to eliminate Grad PLUS, you know, as part of 

the greater good in terms of, you know, more efficient use of resources, as you have argued, and cap the amount under Stafford 

and basically drive students into the private student loan market 

in terms of ways to fill the gap, you know, where does that leave 

the medical student who, again, wants to practice in an area where 

insurance payments are low, where, again, just—there are just 

huge obstacles in terms of trying to show an originator that 

youhave got a really strong financial future, as opposed to another 

student at Yale, maybe in the same class, who is going to become 

an orthopedic surgeon in New York City. 

And so, you know, we have got a problem, right now, in terms 

of trying to staff up in critical professions, and where does your 

proposal leave us in terms of being able to meet those challenges? 

Mr. DELISLE. So I don’t disagree that that is a problem, but what 

you have done is you have created an income-based repayment program with loan limits and no caps on forgiveness that provides the 

benefits you are trying to target to a certain sector of workers in 

the economy to everyone. 

Mr. COURTNEY. No, I— 

Mr. DELISLE. So that is essentially the issue. 

Mr. COURTNEY [continuing]. To that fact that your, you know, 

larger proposal were to be enacted. 

Mr. DELISLE. Right. 

Mr. COURTNEY. Where does that leave us in terms of trying to 

address these shortages? 

Mr. DELISLE. So prior to 2006, I would argue that we had doctors. We had lots of doctors prior to 2006, right? And so people 

were able to go to medical school and they were able to partake in 

those types of jobs. 

But prior to 2006 there was no Grad PLUS. Grad PLUS is a very 

new program, so I think it is a fairly weak argument to say that 

we need it and the world would look very different if we didn’t 

have it even though it is brand new. 

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Mr. COURTNEY. I am not arguing for preserving the status quo, 

you know, based on, you know, one discrete part of the workforce. 

I am just saying we have got a problem in terms of one discrete 

part of the workforce and if we—if we basically are saying we are 

going to just let the private student loan market be the way that 

a student who wants to go into an area that is underserved and 

that is not highly compensated, you know, where does that leave 

our country in terms of being able to address those needs? 

Mr. DELISLE. So you can borrow $20,500 a year in the Stafford 

program right now. You could increase that limit a bit where you 

think it is appropriate so that those people can borrow those loans. 

And I haven’t proposed eliminated loan forgiveness in my proposal. It includes loan forgiveness. But for public service, I suggest 

limiting the amount that can be forgiven to around $30,000 to 

$40,000 for anybody that qualifies for public service. I don’t think most people think that $40,000 in the government 

grant to have your loan forgiven is too little. And then the issue 

is you can still repay your loan using income-based repayment 

after you receive your public service loan forgiveness. 

Mr. COURTNEY. Okay. You know, I would just say that I think 

it is important to understand the kind of professions I am talking 

about are not public sector jobs, okay? These are people who have 

private practices and who, you know, provide services for child 

agencies and are not sort of government employees. 

So to sort of say that that—I just think you need to think that— 

Mr. DELISLE. So I didn’t— 

Mr. COURTNEY [continuing]. You need to think that through. 

Mr. DELISLE. Well, but I didn’t—but I have loan forgiveness in 

my proposal for them. 

Mr. COURTNEY. I understand— 

Mr. DELISLE. They would receive loan forgiveness after 25 years. 

Mr. COURTNEY. What you said was for, you know, public professions. 

Mr. DELISLE. And for non-public. There is loan forgiveness in 

current law— 

Mr. COURTNEY [continuing]. Follow up on that because— 

Mr. DELISLE. Right. That is current law. 

Mr. COURTNEY [continuing]. Frankly, we, in my opinion, can’t 

just sort of accept the status quo in this area. We need to ramp 

up in terms of—you know, if you look at the graduating class of 

Yale’s medical school and seeing where people are going, the costs 

and the challenges of financing are driving people away from parts 

of the profession where there is a critical need. 

I yield back. 

Ms. BAUM. Oh, I am sorry. Could I just say I think public subsidies for the people you are talking about are totally appropriate. 

They should be targeted at those people. We should just give public 

subsidies to people for going into those occupations. 

Mr. COURTNEY. Well, I think thatis, you know, I guess that is a 

good idea. I mean, the problem is, who decides? And that is, you 

know, something that, you know, we—is sort of left out of some of 

the discussion that is being talked about here. 

So I yield back. 

Ms. FOXX. Mr. Andrews, you are recognized. 

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Mr. ANDREWS. Thank you, Madam Chairman. I want to enter 

your contest for a new name for nontraditional students. I would 

call them survivors. 

And I want to ask Ms. Conklin—you or anyone else on the 

panel—the following question: Let’s take a woman who makes 

$30,000 a year, works full time, and she has two children. And she 

has an associate’s degree now, and her goal is to earn a bachelor’s 

degree in accounting because she thinks she could make another 

$10,000 or $15,000 a year if she did that. 

Under the one grant, one loan idea, how much would she get if 

your idea were adopted and how much does she get now? Let’s say 

she is taking two courses per semester, because, you know, when 

you look at her, full-time work and full-time mom that is about— 

she sleeps very little but she takes two courses a semester. How 

does the proposal affect her? 

Ms. CONKLIN. Okay. Thank you, Mr. Andrews. I want to make 

sure I get this. 

So that is my mom. She made $30,000 a year. There were two 

of us. She had three jobs. 

Mr. ANDREWS. She was— 

Ms. CONKLIN. She was not able to get back into— 

Mr. ANDREWS. She was obviously a very good mom. 

Ms. CONKLIN. Thank you, sir. 

In the—current system, that person gets a maximum Pell Grant 

probably as an independent student and gets 50 percent of the 

award because they are going approximately part time at two 

courses. What we are proposing to do is to create—there are several options that lay out on the table. We are proposing one of two 

options. 

Without a doubt, we want the Pell Grant to value full-time attendance and we want her to get out as soon as possible because 

she is losing that promotion that she could otherwise get if she has 

the bachelor’s— 

Mr. ANDREWS. Yes, but you don’t understand. Full time is not an 

option for her. 

Ms. CONKLIN. Okay, so actually, sir— 

Mr. ANDREWS. She has to pay the bills so she—you know, every 

waking hour she can take those two credits. That is it. Or two 

courses. 

Ms. CONKLIN. You have actually asked the right question. The 

play for Congress is to get your grant and loan programs to value 

competencies and completion. 

Mr. ANDREWS. Right. 

Ms. CONKLIN. And what you can do—that woman—I would advise her, I would advise my mom: Western Governor’s University. 

Kids go to bed, full-time program, self-paced, get your maximum 

award— 

Mr. ANDREWS. But with all due respect, she doesn’t want to do 

that. She wants to go to Rowan University in my district and sit 

in a classroom. She doesn’t want to go online. That is what she 

wants to do. 

If I read this proposal correctly, she gets less under your proposal than she does now, doesn’t she? 

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Ms. CONKLIN. No, sir. There is actually several ways to look at 

how to invest in that, and these are choices for Congress to make. 

We actually identify sufficient savings that she could actually get; 

that the maximum Pell Grant would go to $7,000—that you could 

afford to pay that with no new dollars. 

Mr. ANDREWS. But she doesn’t— 

Ms. CONKLIN. And so she would not receive any different benefits. 

Mr. ANDREWS. But she doesn’t get the maximum Pell, does she, 

because she doesn’t meet your— 

Ms. CONKLIN. No, but her average Pell would not change, sir, 

under this system if you choose to reinvest savings because you 

have adopted this comprehensive set of simplification options. 

Mr. ANDREWS. Does she still qualify for the American Opportunity Tax Credit the way she does now? She can get $2,500 refundable now. 

Ms. CONKLIN. She would actually get up to $10,000 because we 

actually propose one lifetime learning tax credit—one tax benefit 

modeled on the lifetime learning tax credit up to $10,000. 

Mr. ANDREWS. But there is no limit on the tax credit now. She 

can get it every year $2,500, can’t she? 

What is the limit now, Mr. Delisle? 

Mr. DELISLE. I believe it is 4 years. 

Mr. ANDREWS. So she is limited to $10,000 now? 

Mr. DELISLE. No, I believe that the number of years you could 

claim the AOTC is 4 years. But also, the AOTC expires in a few 

years. 

Mr. ANDREWS. Well, that is a different question. 

But, can anybody tell me definitively whether she is better off 

under the new proposal or the old one? 

Ms. BAUM. I haven’t heard anybody propose cutting the—any of 

the reform proposals involve cutting the aid that a student like 

that would receive. It is very clear that there are many students 

who have to enroll part time. They get Pell Grants now; they 

should continue to get Pell Grants and those Pell Grants should be 

funded as generously as we can manage to fund them. 

Mr. ANDREWS. And I understand this is a conceptual proposal, 

but we don’t legislate concepts; we legislate statutes and they have 

real impact on real people. And the one thing I am alarmed with 

reading this is this—look, I think people should finish as quickly 

as they can, but my concern here is for people for whom full-time 

going to school is not a viable option. Does this proposal penalize 

them? Yes or no? 

Ms. BAUM. No proposal that I am aware of here penalizes those 

students, no. No one proposes making a cut in the grant that a 

half-time student would receive. 

Mr. ANDREWS. So she would get the same that she does now, or 

more? 

Ms. CONKLIN. If you elect to make the other changes to simplification we recommend, which generate savings which can be reinvested in a larger Pell Grant, and then she gets exactly the same 

award. 

Ms. MISHORY. And just real quick, I mean, I can’t speak to Ms. 

Conklin’s proposals, but I do appreciate the question because I 

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think it raises a really important point, which is proposals that 

look at bringing students up from, say, 12 credits to 15 credits, and 

how can we encourage people to go full time or change the definition of that, they offer real drawbacks to students like that. 

They may not be able to take more classes because they have 

kids. They may not actually be able to take more credits because 

their school can’t offer those credits because their school is underfunded. 

So I think those are really important questions to be asking as 

we are thinking about that. 

Mr. ANDREWS. And I appreciate the answers. 

I would just say to the chair before I yield back that, you know, 

I think this goes to her point. The so-called ‘‘traditional student’’ 

is a minority these days. The majority of students are the people 

that we are talking about in this line of questioning. 

I think this committee wants to be very, very vigilant that someone in that position is not disadvantaged in any way and I think 

you do too. 

I yield back. 

Ms. FOXX. Mr. Polis, you are recognized. 

Mr. POLIS. Thank you, Madam Chair. I appreciate the time and 

appreciate you and Chairman Kline doing this hearing. 

At a time when college degrees are increasing in importance, we 

need to make sure that students have more information about their 

options and an easier way to repay their loans when they have 

completed their degree. Right now there are seven options that borrowers select when entering repayment. 

Even worse, the default option is very rarely the best. In fact, the 

most expensive at a time when their income is the lowest—likely 

to be the lowest and the least flexible. I appreciated Ms. Mishory’s 

remarks that said that many haven’t even heard of some of the better options that might be available, including income-based repayment. 

Students would benefit tremendously from a simpler way to 

repay their student loans as the default without having to worry 

about managing complicated paperwork and needlessly missing a 

payment. That is why I have introduced the ExCEL Act, along with 

Congressman Petri, who asked a few questions earlier. I believe 

that is a strong step in the right direction toward a more flexible, 

student-centered, and success-centered financial aid system. 

Under the ExCEL Act, students would pay back their loans on 

a simple, income-contingent basis. Payment obligation is 15 percent 

of a borrower’s income starting above 150 percent of the poverty 

line until the loan is repaid. It has strong borrower protections so 

our neediest students would be paying 0 percent when they are out 

of college. 

My first question for Ms. Mishory is, like the student you described in your testimony, I speak with many students in Colorado 

who are very frustrated by our complicated, often unforgiving student aid system. As you mentioned, a survey your organization conducted found 89 percent of respondents agreed or strongly agreed 

with being enrolled in an income-based repayment program. 

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How can streamlining the system of automatic and universal income-based repayment help students navigate the complicated student aid system and avoid defaulting on debt? 

Ms. MISHORY. Thank you. Yes. I mean, I think it can do a lot. 

I think that it can ensure that students, as they are leaving school, 

perhaps facing a tough economy, as they have in the last few years, 

and struggling to figure out their next step, really be able to manage those payments and manage a system that has otherwise been 

complex. 

I think one important point to make is thatwhen you are in an 

income-based repayment program you can pay more. So you can 

pay it down faster. So if that makes sense for you then you can go 

ahead and do that. And so we want to— 

Mr. POLIS. So it empowers a student if they want to pay even 

up to the amount they would under the 10-year repayment program if they want to. Just like you can pay down your credit bill 

early, you can, if you want to, pay it down. 

Ms. MISHORY. That is right. Yes. And so we would— 

Mr. POLIS. One more point: You get the advantages—to be clear, 

you get the advantages of the 10-year repayment program and the 

flexibility to do that if you want with additional flexibility to pay 

less if you so choose. Is that correct? 

Ms. MISHORY. That is right. 

Ms. BAUM. I would—oh, I am sorry. 

Mr. POLIS. Yes? Go ahead, Dr. Baum. 

Ms. BAUM. I was just going to also point out that in—another advantage is that with the discussion of the Oregon programs, if we 

had a program like the one you have proposed or others here have 

proposed in place and everyone knew about it, we wouldn’t have individual states trying to develop programs that loan students all 

this money and don’t tell them that it is a loan. 

Mr. POLIS. And I appreciate Ms. Mishory’s point in that last one 

that this gives students the option to pay less but if they choose 

to they can actually do the same 10-year repayment program, 

which is the default now. 

Next question for Mr. Delisle: I would like you to address the 

most needy borrowers, those who stand to benefit the most from affordable access to quality education. You mentioned that subsidized 

Stafford loans don’t always provide low-income students with the 

greatest benefits, and of course there is a tranche of students just 

outside of the eligibility that, of course, rely on student loans, 

might go into, depending on their degree, lower-and middle-paying 

jobs. 

How do you feel about the simplified universal system of incomebased repayment? How do you feel that can be more effective when 

it comes to serving the students who are most in need and most 

at risk? 

Mr. DELISLE. Well, it does a better job than the current system 

because it is essentially looking at what their income is when they 

leave school and setting their payment based on that. 

You mentioned the subsidized Stafford—we have a subsidized 

Stafford loan and we have an unsubsidized Stafford loan; this is 

part of the confusion I was talking about earlier. The subsidized 

Stafford loan has this interest rate benefit—has an interest benefit 

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where the interest doesn’t accrue while the borrower is in school, 

but that, again, is a benefit that they are receiving based on their 

family’s income when they enter school, and an income-based repayment program targets benefits based on their income when they 

are out of school, which makes much more sense. 

The other sort of complicating thing is that those benefits can 

sometimes cancel one another out. You can only earn one. You can 

only get the benefit from income-based repayment and not the subsidized Stafford, even though you have it nominally, and that is an 

example where we have got just too much overlap and complexity 

in the program. 

Mr. POLIS. And you think that more simplicity would work to the 

benefit of the students? 

Mr. DELISLE. Absolutely. 

Mr. POLIS. I thank the chairlady and I yield back the balance of 

my time. 

Ms. FOXX. And the gentleman made an unmitigated commercial 

for his and Mr. Petri’s bills. You are very good. That is why we 

know you came from the private sector. 

Mr. DesJarlais? 

Mr. DESJARLAIS. Thank you, Madam Chairwoman. 

And I thank the witnesses. 

A problem that we have seen evolving over the past couple decades is the amount of time it takes for students to complete college 

degrees. You know, often times it used to be four years; a 16-credit 

hour was standard. Now kids are actually being sold prices for a 

12-credit hour, which graduates them in 51⁄2 and maybe six years. 

So we are not getting people into college and back out into the 

workforce in a timely fashion. 

I think one great way to lessen costs for college students and taxpayers is to graduate students in as timely a manner as possible 

while still making sure they gain knowledge and appropriate skills 

to excel in the economy. I know in my district back in Tennessee, 

Bridgestone North America and Motlow Community College, along 

with local stakeholders, created a program—in this case a 

mechatronics program—in which high school students can gain college credit and technical credentials while gaining real-world work 

experience. 

Ms. Conklin, if you wouldn’t mind, can you talk about programs 

like dual enrollment credentialing and competency-based education? 

Ms. CONKLIN. I can, but can I give a shout out to Tennessee 

first? 

Mr. DESJARLAIS. You can. Is this another infomercial— 

Ms. CONKLIN. This is. 

So HCM, since 2010, has led a state reform network that Lumina 

Foundation supports called Strategy Labs. Tennessee is a superstar 

in it, and the reason why I say this is that they are the only state 

with an outcomes-based funding formula that rewards all of the 

state’s subsidy to institutions based on how well they do improving 

outcomes for students, particularly most disadvantaged students. 

By having such clear, few metrics—again, a simple system that 

is incentive-based around success. They have one of the best in the 

nation policies around prior learning assessment; they have a growCEWDOCROOM with DISTILLER

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ing appetite for competency-based education and a way to fund 

that through their premium on completion, not on courses completed, not on courses attempted, not on students enrolled. 

They are seeing institutional—they are seeing faculty and presidents kind of analyze the data, embrace data, analytic techniques, 

in ways that really we see at scale and we want to embrace, and 

then again, I was saying, kind of bringing back into Mr. Andrews’ 

question, the Tennessee Tech Centers have completion rates that 

are so far above the national average and it is because they have 

a structured cohort program. And so indeed, the way they approach 

structure is actually great for nontraditional students and they do 

well under this outcomes-based funding formula. 

Now on dual enrollment, we, in this technical panel report, didn’t 

speak directly to it, but dual enrollment is, indeed, if the courses 

that you take in high school count for college completion, it is a 

way to reduce the cost of college. If you are a student in an early 

college high school, for instance, where you can, in high school, 

earn an associate’s degree, you can save 50 percent on your associate’s degree. 

So it is a phenomenal option. But again, that is a state pathway, 

and that is why I come back to Tennessee and recognizing where— 

the role of state leadership in our nation’s college attainment problem. 

Mr. DESJARLAIS. I appreciate that, and if you need more time to 

brag on Tennessee, you are welcome to take it. 

But I would just ask, how can we encourage students to spend 

less time in school and more time building their skill sets in the 

workforce? 

Ms. BAUM. Well, one of the things I think that we have to understand is that students are a very diverse group of people. And it 

used to be that most students were young, full-time, traditionalaged students. That has for a long time not been the case and we 

can’t expect that the single mother of two children is going to be 

able to progress through a program at the same rate that someone 

with fewer responsibilities can, but we have to help them to select 

the right programs. 

And all of these ways of making it possible for people to do multiple things at the same time or to get credits for things they already knew are important, but we have to be very, very careful 

about making sure that students get a quality education, that they 

really learn something with the process of getting their degree and 

that we aren’t just handing out pieces of paper to students. 

Mr. DESJARLAIS. Thank you. 

Does anyone else have anything to add? 

Ms. MISHORY. I mean, one way is to make sure that we are supporting our aid programs and ensuring that we are investing in 

things like the Pell Grant that allow students to go to school and 

maybe work a few hours less because they are able to actually attend school and pay their bills. 

Mr. DELISLE. Amy Laitinen, in our office at the New America 

Foundation, has done a lot of work around the credit hour and 

competency-based education, and she has done a very good job of 

pointing out that the way the—federal student aid programs are 

structured is they essentially endorse a system that is based on the 

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credit hour and it makes it very difficult for institutions to do 

something different. 

But there are ways in existing statute, such as the experimental 

sites, where institutions can come up with different ways to provide 

federal aid that is not necessarily based on these standard delivery 

models. But I think it is really important for the committee to realize that when you make these rules and the ways the laws get 

written, if you are sort of codifying an educational system of today 

and not allowing for the flexibility that we want to be there, it is 

problematic. 

Mr. DESJARLAIS. I thank the panel for their perspective and I 

yield back. 

Ms. FOXX. Thank you very much. 

I would like to thank, again, our witnesses for taking the time 

to testify before the committee today. I realized that when I made 

my remarks I did not properly thank you and I will correct that 

now and also thank you on behalf of the chairman, who had another obligation. 

I would like to see if Mr. Hinojosa has any closing remarks. 

Mr. HINOJOSA. Yes. Thank you. 

In closing, I thank our expert witnesses for sharing their views 

on how the federal government can simplify the federal financial 

aid process in order to lower costs and improve access to higher 

education. I think that your presentation was excellent and we 

thank you for that. 

While I applaud President Obama and Secretary Duncan for 

working to make college costs more transparent, I believe that Congress and the federal government must make student loan repayment options easier for students and families to navigate and understand. As this committee moves forward to reauthorize the 

Higher Education Act, I intend to continue to explore ways in 

which Congress can simplify the federal student aid process and 

ensure that students and families fully understand their funding 

options. 

I plan to introduce an innovative amendment when we go to 

marking up this legislation as part of reauthorization of the Higher 

Education Act. That amendment will require that the Financial 

Literacy Education Program for high school students and their parents include this new component, which informs and teaches them 

about the new, improved federal student college financial aid that 

we have been discussing here this morning so they can make better 

choices for their family. 

And with that, I yield back. 

Ms. FOXX. Thank you, Mr. Hinojosa. 

I have realized, as a result of this hearing today and perhaps 

some of the other discussions that we have had, but particularly in 

this one, I think, that I am really a failure, because it took me 

seven years to get my undergraduate degree and we are so focused 

now on completion, it is obviously a failure if you take more than 

four years or even more than six years to get your degree. 

But I appreciate the comments that have been made today. I will 

make just a couple of brief comments. 

Dr. Baum, I appreciated very much what you said about the fact 

that if we focus on one student—and I think Mr. Andrews gave a 

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great example of that—if you focus on only one student and the impact of change on a particular student, it is very difficult to move 

forward, and I think that has been a real problem in terms of making changes that need to be made in this area. And I am—again, 

I appreciate the fact that Mr. Andrews gave the example, I think 

that you were pointing out in your comments. 

I also appreciate your saying that we need to really emphasize 

that students should be getting a degree that is useful to them or 

skills that are useful to them when they graduate. We focused on 

many different things today—we focused on inputs; we focused on 

getting students the information. But in other hearings, we have 

focused on that area, and so I appreciate your bringing that up. 

We realize this issue of loans and debt and financial aid become 

an even greater issue when 53 percent of the students who have 

recently graduated have not been able to get jobs. Ms. Mishory 

mentioned the terrible economy, and of course, some of us think 

the economy has suffered tremendously because of policies that 

have been implemented in recent years. 

I am concerned, though, about another issue, Dr. Baum, that you 

brought up, and that is if students going to college or in college 

cannot understand from websites on the campus and the colleges 

what it is that is happening, what about the completion rates, what 

about loans and all that, I am not sure what—but they can understand it from a text message—I am not sure what that is saying 

about our college population these days. 

How much simpler can we make things? And maybe we need to 

look at who is being admitted to college if they can’t understand 

the information. 

And what you continue to talk about, the obligation of the federal 

government, to have the material out there that they can understand, but very little has been said about the obligation of the student to understand what is out there. 

So anyway, I want to thank all of you for being here today. I 

think we have all learned a lot. 

The committee is now adjourned. 

[Additional submission of Chairman Kline follows:] 

Prepared Statement of the Education Finance Council (EFC) 

The Education Finance Council (EFC) is the trade association representing nonprofit and state agency student loan organizations across the country. EFC commends the Committee for examining ways to simplify the federal student aid system 

and reduce burdensome complexities for students and families. The members of 

EFC share the Committee’s overarching goals of improving postsecondary access, 

success, and affordability. We believe one of the cornerstones to student success is 

their access to and understanding of different options and pathways. Particularly, 

students must have access to an array of options to finance their education. 

EFC agrees that there is redundancy and complexity in the federal student aid 

system that must be eliminated. However, we disagree with the recent calls to 

switch to a single-loan federal student aid system, which would collapse all federal 

loan programs into one. Each student’s financial situation is unique and each student should have access to options that fit their varying needs. The alternative student loan programs provided by nonprofit and state agency student lenders serve 

as good examples of successful loan programs with several financing options. Most 

EFC members’ programs include different interest rate options for loans, depending 

upon the repayment option the student chooses. 

Members provide choices of variable- and fixed-rate loans; loans for students, parents, and families; consolidation loans; and loan programs for specific majors or professions. For example, many offer programs for teachers, doctors, and other highCEWDOCROOM with DISTILLER

142 

need professions in their states. The programs provide incentives for studying in 

such fields and terms and benefits tailored to the profession. 

A multitude of options is only useful to students and families in conjunction with 

effective financial literacy education and individualized counseling. Students must 

have access to tools and programs to help them evaluate each option and make an 

informed decision on which will best fit their needs now and in the future. EFC 

members work with students and families in-person and virtually to ensure they understand their options for financing their education and encourage them to only 

take on debt they will be able to manage by incorporating over-borrowing prevention 

strategies into their alternative loan programs and comprehensive financial literacy 

tools. These financial literacy tools provide information on financial aid options and 

processes, budgeting, credit scores, identity theft, default aversion, the impact of 

debt on lifestyle, responsible borrowing decisions, and consequences of over-borrowing. 

There is room for much improvement in the federal student aid system. Students 

and families deserve an easier-to-understand process of paying for college with 

fewer complexities, affordable options, and financial education that works. EFC 

members have played a significant role in helping students and families finance 

higher education for decades and stand ready to help coordinate and implement beneficial changes to the student aid system. 

[Additional submission of Mr. Barletta follows:] 

Prepared Statement of the Pennsylvania Association of Private School 

Administrators (PAPSA) 

The Pennsylvania Association of Private School Administrators represents the 

more than 300 for-profit career schools, colleges and universities in the Commonwealth. 

Like the rest of the country, PAPSA is deeply concerned about the complexity of 

federal student aid, and may have a partial solution to the problem. PAPSA believes 

that if schools were allowed to limit the amount of aid a student receives, it would 

greatly ‘‘streamline’’ the repayment process. With smaller and fewer loans, there 

would be less to pay back, and pay back would be done in less time. The outcome: 

less complexity and less student debt. 

Allowing schools to limit the amount of aid to students will help to simplify the 

‘‘complex patchwork of grants, loans, and institutional support programs’’ as the 

committee so aptly puts it. Limiting loans will reduce the confusion of applications, 

redundant paperwork, and the many different loan programs and repayment initiatives, making the whole process easier for students AND schools. 

Currently, many schools just process all of the aid available to a student so they 

are not cited by the Department. This can be confusing for families, especially if 

they did not want all of the loans available. 

Furthermore, schools have been reporting for years stories of students asking for 

all the financial aid they are entitled to, paying their tuition and then walking away 

with thousands of dollars which ends up paying for a newer car, Christmas presents, plastic surgery or big parties which the school usually ends up hearing about. 

These cash stipends can be, in one case, as high as $24,000 for an associate degree. 

Despite the best efforts of schools to curb overborrowing, the U.S. Department of 

Education mandates that schools must disclose to students all the loan money they 

are entitled to borrow. What schools in Pennsylvania have found is that over borrowing is a big part of the loan debt problem, especially among unsophisticated borrowers. And it is increasing despite aggressive loan counseling. 

The problems PAPSA sees now with overborrowing will only be exacerbated in the 

future. PAPSA would like to see Congress or the US Department of Education consider additional methods beyond counseling for limiting student borrowing. These 

methods will help simplify the student aid process and in the end, save student and 

taxpayer monies. 

[Whereupon, at 12:06 p.m., the committee was adjourned.] 

Æ 

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