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S. HRG. 113–861 

THE ROLE OF STATES IN HIGHER EDUCATION 

HEARING 

OF THE

COMMITTEE ON HEALTH, EDUCATION, 

LABOR, AND PENSIONS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

ON

EXAMINING THE ROLE OF STATES IN HIGHER EDUCATION 

JULY 24, 2014 

Printed for the use of the Committee on Health, Education, Labor, and Pensions 

( 

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

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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS 

TOM HARKIN, Iowa, Chairman 

BARBARA A. MIKULSKI, Maryland 

PATTY MURRAY, Washington 

BERNARD SANDERS (I), Vermont 

ROBERT P. CASEY, JR., Pennsylvania 

KAY R. HAGAN, North Carolina 

AL FRANKEN, Minnesota 

MICHAEL F. BENNET, Colorado 

SHELDON WHITEHOUSE, Rhode Island 

TAMMY BALDWIN, Wisconsin 

CHRISTOPHER S. MURPHY, Connecticut 

ELIZABETH WARREN, Massachusetts 

LAMAR ALEXANDER, Tennessee 

MICHAEL B. ENZI, Wyoming 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

RAND PAUL, Kentucky 

ORRIN G. HATCH, Utah 

PAT ROBERTS, Kansas 

LISA MURKOWSKI, Alaska 

MARK KIRK, Illinois 

TIM SCOTT, South Carolina 

DEREK MILLER, Staff Director 

LAUREN MCFERRAN, Deputy Staff Director and Chief Counsel 

DAVID P. CLEARY, Republican Staff Director 

(II) 

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C O N T E N T S 

STATEMENTS 

THURSDAY, JULY 24, 2014 

Page 

COMMITTEE MEMBERS

Harkin, Hon. Tom, Chairman, Committee on Health, Education, Labor, and 

Pensions, opening statement ............................................................................... 1 

Alexander, Hon. Lamar, a U.S. Senator from the State of Tennessee, opening 

statement .............................................................................................................. 2 

Franken, Hon. Al, a U.S. Senator from the State of Minnesota .......................... 4 

Isakson, Hon, Johnny, a U.S. Senator from the State of Georgia ....................... 31 

Warren, Hon. Elizabeth, a U.S. Senator from the State of Massachusetts ........ 32 

Murphy, Hon. Christopher, a U.S. Senator from the State of Connecticut ........ 34 

Murray, Hon. Patty, a U.S. Senator from the State of Washington ................... 40 

WITNESSES

Kaler, Eric, Ph.D., President, University of Minnesota, Minneapolis, MN ........ 6 

Prepared statement .......................................................................................... 7 

Lubbers, Teresa, Commissioner, Indiana Commission for Higher Education, 

Indianapolis, IN ................................................................................................... 12 

Prepared statement .......................................................................................... 14 

Madigan, Hon. Lisa, Attorney General, State of Illinois, Chicago, IL ................ 16 

Prepared statement .......................................................................................... 18 

Perna, Laura, Ph.D., Professor and Chair of the Higher Education Division, 

University of Pennsylvania, Philadelphia, PA ................................................... 21 

Prepared statement .......................................................................................... 23 

ADDITIONAL MATERIAL 

Statements, articles, publications, letters, etc.: 

Georgia State University, Complete College Georgia, 2013 Status Report . 49 

Letters: 

Coalition of Higher Education Assistance Organizations (COHEAO), 

Washington, DC ..................................................................................... 56 

Campus Partners, Winston-Salem, NC ................................................... 58 

(III) 

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(1) 

THE ROLE OF STATES IN HIGHER 

EDUCATION 

THURSDAY, JULY 24, 2014 

U.S. SENATE, 

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS, 

Washington, DC. 

The committee met, pursuant to notice, at 10:05 a.m., in room 

430, Dirksen Senate Office Building, Hon. Tom Harkin, chairman 

of the committee, presiding. 

Present: Senators Harkin, Alexander, Murray, Franken, Murphy, 

Warren, and Isakson. 

OPENING STATEMENT OF SENATOR HARKIN

The CHAIRMAN. Good morning. The Health, Education, Labor, 

and Pensions Committee will come to order. 

The hearing today is on the role of States in higher education. 

Since the establishment of State land-grant universities, our country has rightly recognized higher education as an essential public 

good, in the national interest. But States have also played a critical 

role to an affordable college education through investing and being 

a key player in oversight and developing strategies to increase degree attainment. 

So there is a lot of our history to be proud of, but I think it’s time 

to re-examine the States’ role in light of today’s challenges. Now, 

the steady erosion of State investment in public higher education 

over the last few decades reflects a stunning abdication of responsibility on the part of States to preserve college affordability. Also, 

too few low-income and minority students graduate from college, 

and States can and must play a more ambitious role in boosting 

degree attainment among these students. 

One of the biggest takeaways from our committee’s many hearings that we’ve had on college affordability is the direct link between rising college costs and long-term State disinvestment in 

higher education. There have been a lot of reasons why tuitions 

have gone up and kids are borrowing more money. But the single 

largest factor, at least as it’s come through in our hearings, has 

been the State abdication of that, State disinvestment. For example, when measured per student, State funding for public higher 

education is actually lower today than it was in 1980, adjusted for 

inflation. Public colleges have responded by raising tuition, leaving 

the students and their families to borrow more money and take on 

that financial burden. 

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Public institutions of higher education, which educate over 70 

percent of students in this country, are now approaching an historic turning point: for the first time ever in nearly half of the 

States, students will be paying more than their State governments 

for their public higher education. I think we must stem this tide 

and get States back in the game and meeting their responsibility 

for higher education. 

So today, we will also examine the critical role that States play 

in providing oversight and consumer protections in our higher education system. From abuses in student loan servicing to predatory 

practices at many for-profit colleges, we have seen State law enforcement officers fill a consumer protection void that has hurt students and student loan borrowers. Recently, we have seen a bipartisan group of nearly three dozen State attorneys general, including 

one of our witnesses here today, the attorney general of Illinois, 

take a leading role in standing up for students and taxpayers by 

undertaking investigations and initiating lawsuits to end these 

practices. 

States can also play a leading role in developing innovative practices to help students stay in school and attain a degree, and we’ll 

be hearing about that again from Dr. Kaler from Minnesota. We 

need to help more States pursue these types of innovations to help 

more students complete postsecondary education. 

In my recently released discussion draft to guide reauthorization 

of the Higher Education Act, I have put forward proposals specifically designed to get States back in as a partner in higher education. I’m not saying that’s the end-all and be-all, but I’m saying 

that we have to find some creative ways to incentivize States to invest more robustly in public higher education and to help students, 

especially low-income students and first-generation students, to get 

through college. 

As I have said, we have plenty to celebrate as we look back at 

our investment in higher education in this country, but new challenges today demand new solutions. I look forward to working with 

this committee, with our Ranking Member, Senator Alexander, and 

my colleagues to ensure that a pathway to the middle class is 

strongly in place for future generations. 

With that, I will yield to Senator Alexander for his opening statement. 

OPENING STATEMENT OF SENATOR ALEXANDER

Senator ALEXANDER. Thanks, Senator Harkin. 

I want to thank Senator Harkin for a series of really good hearings that we’ve had on reauthorizing the Higher Education Act, 

and I want to thank our witnesses for coming today. I look forward 

to learning from you. 

One thing we agree on is that we should strive to have more 

Americans with a college degree. The President agrees with that. 

The Governor of Tennessee agrees with that. I agree with that. 

Senator Harkin agrees with that. It might be Associate’s or Bachelor or beyond, but we need more graduates for the era we’re in. 

But we need to keep in mind that in achieving that, the Federal 

Government plays a limited role. States must lead the way. As 

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tend public 2-or 4-year institutions governed by States that receive 

substantial State funding. They attend those institutions because 

they’re good and, in part, because they’re affordable. The average 

in-State tuition fees are $8,600 for a 4-year institution, $3,100 for 

a 2-year institution. The Federal Government provides some funding to help students gain access. The Pell grant goes up to $5,700. 

It averages about $3,600 for a typical low-income student. The first 

2 years of college, therefore, are basically free. Students are eligible 

for more in grants than the cost of tuition. The Federal Government also makes about $100 billion in loans 

available to students. That can be up to about $7,500 a year for a 

typical dependent undergraduate student. 

But despite all of those Federal dollars, the Federal Government 

is still a minority investor in higher education. According to the 

State Higher Education Executive Officers Association, public colleges and universities, these are the ones that three out of four 

Americans attend—received about $143 billion in 2013; $81 billion 

of that came from State and local revenues, $61 billion from tuition. That includes Pell grants and Federal loans. 

States continue to play the biggest role financially. Every Governor knows that and knows how important that is, and many are 

doing very innovative work. For example, the Governor of Tennessee, Bill Haslam, has a Drive for 55 campaign aimed at having 

55 percent of Tennesseans with a postsecondary degree. As a part 

of that effort, he signed legislation this year making Tennessee the 

first State to make 2 years of community college free for every high 

school graduate in the State. 

Many States are implementing performance-based or outcomesbased funding models. I imagine we’ll hear about that today. Tennessee has one of those. One hundred percent of the money is distributed that way. Other States are working to create new programs for adults and veterans. I’m especially interested in how the 

Federal Government is getting in the way of State innovation. 

One way is the complexity of the Federal financial aid system. 

Senator Bennet and I have announced our effort to reform the Federal application—the FAFSA, which is 108 pages long, and I just 

got today this book that respected educators have written for the 

20 million families that are filling this absurd thing out when 

we’ve had testimony from witnesses that say that we can get 95 

percent of what we need to know by asking two questions—what 

was your income, and what’s your family size. That’s one example 

of how we’re getting in the way, and together I think we might be 

able to change that. 

A second is too many Federal regulations. The former President 

of Stanford said it cost 7 percent of their budget to fill all the regulations out. The current President of Stanford was by this week 

and he said that 42 percent, according to a National Science Foundation study, 42 percent of a principal investigator’s time is spent 

on administrative matters. That’s probably twice the amount of 

time that it ought to be. That’s billions of dollars wasted. 

And we hear a lot, and Senator Harkin and I have gone back and 

forth about this a little bit in the past, maybe we will some more 

today, about States not spending as much on higher education. 

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nessee did. We paid for 70 percent of a student’s college education. 

The student paid 30. That has flipped. Now it’s 30 percent is paid 

by the State, 70 percent by the student. But the principal culprit 

is Medicaid. It’s the Federal requirements on States to pay for 

Medicaid. It was 30 years ago when I was Governor. Thirty years 

ago, Medicaid was 8 percent of the State budget. Today it’s 30 percent of the State budget, and those dollars come mostly out of higher education. That’s not just my opinion. Peter Orszag, Thomas 

Kane of Brookings have written extensively about that. Mr. Orszag 

was President Obama’s budget director. Lieutenant Governor 

Ravitch of New York has written extensively about how the Federal requirements for Medicaid on States has the effect of taking 

money away from higher education, and that’s why tuitions go up 

around the country. 

We can talk more about that, but the stimulus bill made that 

worse, the health care law expansion made that worse. Federal 

strings are well intentioned, but the unintended consequence is 

higher tuition and higher costs for students. 

I look forward to what the witnesses have to tell us today, and 

I thank Senator Harkin for having another excellent hearing. 

The CHAIRMAN. Thank you very much, Senator Alexander. 

I will now introduce our panelists, and then we’ll take testimony. 

But I would invite Senator Franken to introduce our first witness, 

Dr. Kaler. 

Senator Franken. 

STATEMENT OF SENATOR FRANKEN

Senator FRANKEN. Thank you, Mr. Chairman. 

I’m very pleased to introduce Dr. Eric Kaler, the president of the 

University of Minnesota. President Kaler brings extremely valuable 

experience to this hearing as a witness. He served as president of 

EU for the past 3 years. In addition to that, just last April President Kaler was elected a member of the American Academy of Arts 

and Sciences. He was elected in two categories for his work as a 

chemical engineer and as a higher education administrator. 

In his first budget request to the Minnesota legislature, President Kaler worked with Governor Dayton to institute a tuition 

freeze for undergraduates for the 2013–2014 academic year, and 

the second tuition freeze was just approved for another academic 

year, a significant victory for Minnesota students and their families. 

In addition, President Kaler has been extremely successful in attracting research dollars to the University of Minnesota. He has 

brought in $35.8 million in research investments from the State of 

Minnesota. I’m particularly excited about his initiative called 

MnDRIVE, which makes sure that university research is more 

aligned with the State’s most pressing needs and key industries. 

In 2010, President Kaler was elected to the National Academy of 

Engineering. In 2012, then Secretary of Homeland Security Janet 

Napolitano named him to the U.S. Department of Homeland Security Academic Advisory Council. 

Dr. Kaler received his Ph.D. in Chemical Engineering from the 

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sity he served in 2007 to 2011 as Provost and Senior Vice President 

for Academic Affairs at Stony Brook University in New York. 

President Kaler is a knowledgeable champion for students, and 

I’m very pleased that he is a witness here today. 

The CHAIRMAN. Thank you very much, Senator Franken. 

I might add that my wife is a graduate of the University of Minnesota. Her sister is a graduate of Minnesota. Her sister is a graduate of the law school, and my niece just graduated from law school 

at the University of Minnesota. So, a lot of Minnesota contacts. 

Our next witness is Teresa Lubbers, who serves as Indiana’s 

Commissioner for Higher Education. Prior to joining the Commission in 2009, Commissioner Lubbers served in the Indiana State 

Senate for 17 years, including service as Chair of the Senate Education and Career Development Committee. 

You should feel right at home here then. 

As Commissioner, Ms. Lubbers has worked to increase college 

completion, improve productivity, and ensure academic quality 

while also controlling college costs. She holds an undergraduate degree from Indiana University and a Master’s in Public Administration from the Kennedy School of Government at Harvard. 

Our next witness is the attorney general of Illinois, Lisa Madigan, the first woman elected to serve as attorney general of that 

State. Since taking office in 2003, Attorney General Madigan has 

been a national leader in protecting consumers, safeguarding communities and advocating for students. She has been outspoken 

about the consumer risk, including excessive student debt, associated with for-profit colleges. 

Prior to becoming attorney general, she served in the Illinois 

Senate, worked as a litigator for a Chicago law firm, earlier in her 

career was a teacher, I understand, developing after-school programs to keep kids away from drugs and gangs. 

Attorney General Madigan is a graduate of Georgetown University and Loyola University School of Law. 

Our final witness would be Dr. Laura Perna. Dr. Perna is executive director of the Alliance for Higher Education and Democracy 

and professor in the Graduate School of Education at the University of Pennsylvania. She is past vice president for Postsecondary 

Education at the American Educational Research Association and 

is president-elect of the Association for the Study of Higher Education. 

Her research examines the ways that social structures, educational practices, and public policies promote and limit college access and success, particularly for individuals from lower-income 

families and ethnic minority groups. 

Dr. Perna holds a Bachelor’s degree in Economics and Psychology 

from the University of Pennsylvania, a Master’s in Public Policy, 

and a Ph.D. in Education from the University of Michigan. 

We have a very distinguished panel, very knowledgeable in the 

areas in which we’re concerned. 

All of your statements will be made a part of the record in their 

entirety. 

What I’d like to ask—we’ll start with Dr. Kaler—if you could sort 

of give us a summary in 5 minutes or so, and we’ll go down the 

line, and then after that we’ll open it for questions and discussion. 

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Dr. Kaler, welcome, and please proceed. 

STATEMENT OF ERIC KALER, Ph.D., PRESIDENT, UNIVERSITY 

OF MINNESOTA, MINNEAPOLIS, MN 

Mr. KALER. Thank you, Senator Harkin; and thank you, Senator 

Franken. I thank you on behalf of all Minnesotans, including those 

above-average ones from Lake Wobegon, for your service and your 

regular visits with students on our campus. 

Good morning, Senator Alexander, and members of the committee. 

I come before you today to share how the University of Minnesota is addressing the most critical issues in higher education 

today: first, ensuring access and affordability; second, forging 

strong partnerships to achieve student success; and third, establishing programmatic innovations to assure students, particularly 

low-income students, get their degrees in a timely fashion. 

I also come here to urge you to fully support our students and 

our State through reauthorization of the Higher Education Act legislation, and I thank you for this opportunity. 

I think we all know the value of a public college degree for our 

students and our States; in fact, for the entire Nation’s vitality. It 

has never been higher. The cost, too, has also never been higher. 

As States have reduced their support, families and students have 

borne the brunt of tuition increases. The burdens of student debt 

have become central to a national conversation about the cost of 

going to college. But our experience in Minnesota provides some 

perspective on the national narrative about debt which tends to 

focus on the outliers, that small number of students with $75,000 

or even $100,000 in undergraduate student debt. 

In a perverse definition of ‘‘average,’’ most analyses only include 

those with debt, ignoring, at the University of Minnesota, for example, 37 percent of our students graduate with no debt at all. But 

still, this trend of increased higher education costs for families, especially middle-class families, cannot continue. Since becoming 

president of the University of Minnesota in 2011, I have put accessibility and affordability at the top of my agenda. My first budget 

included the lowest tuition increase in more than a decade, and for 

the past 2 years we achieved an historic tuition freeze for Minnesota resident undergraduates. 

This was a significant achievement, especially given State disinvestment which, over the past decade, was among the largest nationally. Since then, the State and the university have developed 

a partnership of shared accountability. First, the university 

pledged to tackle administrative costs. We pledged to redirect $90 

million, $90 million over a 6-year period from administrative activities to our missions, and we’re ahead of schedule in doing that. 

The university also agreed to accountability targets. We invested 

in financial aid to assist students and families. We award our students nearly $340 million of financial aid annually. Counting all 

students, those with debt and those without, the average per-capita 

burden on our students when they graduate is about $16,500. That, 

to me, is a good investment, particularly when you consider the 

lifetime earnings of college graduates. 

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Our commitment to student support includes a series of innovative programs designed specifically to support low-income students, 

students of color, and first-generation college students. I outlined 

them in my written testimony, and I’m proud of our work in this 

area. 

But as you noted, applying for financial aid should be easier. 

Students and their families are burdened by a confusing collection 

of forms and websites in the process of seeking financial aid, and 

I urge you to help simplify the financial aid process. 

In closing, I offer these thoughts as you consider reauthorizing 

the Higher Education Act. I encourage you to create incentives to 

stop the decline of State investment, to promote affordability and 

access, to support partnerships, and to fuel innovative programs 

like those at Minnesota. I urge you to ensure Federal financial aid 

funding is targeted to institutions with high retention and high 

graduation rates. And finally, I urge you to look at the regulatory 

burdens imposed on us by the Federal Government not only related 

to financial aid but throughout our research enterprise as well. 

Mr. Chairman, members of the committee, we are all in this together to assure higher education’s accessibility and the success of 

the next generation of our Nation’s leaders. 

Thank you again, Chairman Harkin, for your focus on affordability and our students and an opportunity for me to be with you 

today. 

[The prepared statement of Mr. Kaler follows:] 

PREPARED STATEMENT OF ERIC W. KALER, PH.D. 

SUMMARY

President Kaler’s testimony will focus on ways his administration has strengthened the University’s partnership with the State of Minnesota, and he will detail 

programs the University developed to enhance retention and graduation rates 

among students of color and low-income students. 

He will detail the impact of the Great Recession on State funding of his university 

and others, but also point out that student financial debt burdens at the University 

of Minnesota and other land-grant universities, are not as onerous as the popular 

narrative has suggested. The value of a college degree must be measured against 

any debt. 

He will offer insights into the various partnerships required for low-income and 

students of color to succeed in gaining degrees in 4 years. He will emphasize the 

need for a five-way partnership to drive down costs and debt. Those partnerships 

require the support and commitment of the higher education institutions, their respective States, business and industry, students and their parents, and also Congress and the Federal Government. 

He will report on specific efforts his administration has undertaken to reduce 

costs, freeze tuition and invest in support services for students. 

He will detail the changing role of State support for his university, moving more 

deeply into a research funding partnership, a role usually reserved for the Federal 

Government. 

Finally, he will offer recommendations to the Higher Education Act that can help 

all States improve their systems of higher education and financial aid. 

Thank you, Senator Franken. I am honored to join you here today. I am used to 

seeing you on our campuses, visiting regularly with University of Minnesota students, and sharing your concerns about their lives, their families, and the affordability and value of a college education. Thank you for always focusing on our students. 

Good morning, Senator Harkin, and members of the committee. It’s an honor to 

testify before a committee chaired by a graduate of Iowa State University, one of 

our neighboring land-grant peer institutions. And it’s a pleasure to be before RankHELPN-003 with DISTILLER

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ing Member Senator Alexander of Tennessee, birthplace of my wife, Karen, a proud 

graduate of another land-grant university, the University of Tennessee. 

I come before you today to share how the University of Minnesota is addressing 

three of the most critical issues in higher education today: 

• First, ensuring access and affordability; • Second, forging strong partnerships to achieve student success; • And third, establishing programmatic innovations to ensure students—particularly, low-income students—get their degrees in a timely fashion, prepared for life 

and work. 

I also come here to urge you to find the will and the way to more fully support 

our students and our State through the reauthorization Higher Education Act legislation. While I am focusing on our experience in Minnesota, I know it is similar to 

that of public higher education institutions across the country. Many of my peers 

in your home States are also engaged in addressing these critical issues. Thank you 

for this opportunity. 

OVERVIEW

The value of a public college degree for our students and our States—for the entire Nation, really—has never been higher. More jobs than ever require a degree. 

But costs are higher than ever, too. 

Since the Great Recession, State disinvestment in public higher education has 

been profound. As a consequence, tuition has risen dramatically. The burden of student debt has become central to a national conversation—sometimes driven by emotion and not facts—about the cost and value of higher education. 

Meanwhile, we are leaders in investing in innovative ways to teach and for our 

students to learn, be it in thoughtfully designed ‘‘active learning’’ classrooms, 

through so-called ‘‘hybrid’’ or ‘‘flipped’’ courses, through online options, or through 

somewhat trendy and still developing MOOCs, or Massive Open Online Courses. We 

are on the frontlines of pedagogical change. 

While the Higher Education Act focuses on our teaching mission, we have at least 

two other missions that are equally critical for our students and our Nation’s vitality: research and public engagement. 

Public land-grant institutions have long been this Nation’s most logical and critical partners with States and the Federal Government for groundbreaking discoveries and cures, and for developing new knowledge, new products and new processes 

to keep the United States competitive. Our research mission is inextricably linked 

to our educational mission. If you want a strong and robust education, we must ensure our Federal research support is also robust. 

Public higher education institutions and their States are also active partners in 

public engagement and community outreach, be it via rural nutrition and wellness 

programs, dental clinics for New Americans, or helping to close the economic and 

educational achievement and opportunity gaps, a social inequality crisis that must 

be narrowed for our Nation to continue to prosper. This public engagement mission, 

too, benefits students who are actively engaged in civic and community projects for 

academic credit. 

As you consider reauthorizing HEA, I urge you to keep in mind the tripartite mission of America’s great land-grant universities. Consider all that we do. 

UNIVERSITY OF MINNESOTA

For context, let me tell you a bit about the University of Minnesota. Our flagship 

Twin Cities campus has more than 48,000 undergraduate, graduate and professional students, and our four other campuses across Minnesota educate another 

15,000 students annually. Our research enterprise is ranked as the 9th most active 

among public universities in the United States, with annual expenditures of about 

$700 million. 

Every year, we award a wide range of degrees to about 15,000 students, fueling 

Minnesota’s workforce and driving the State’s and region’s very healthy economy. 

Indeed, as Senator Harkin knows, the Upper Midwest is among the Nation’s most 

vibrant regions. 

In our classrooms, laboratories and recital halls, we prepare the next generation 

of leaders—including Members of Congress. Former Senators and Vice Presidents 

Hubert Humphrey and Walter Mondale are among our alumni, as are current members of the House of Representatives Keith Ellison and Rick Nolan. 

Through our research we tackle the grand challenges of our State, Nation and the 

world—from climate change to diabetes to safely feeding the world. And we partner 

with our communities to help our citizens face critical problems, from the future of 

urban density to viruses devastating the pork industry. 

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AFFORDABILITY AND ACCESS

Affordability and access may be the most pressing issues facing higher education 

today. When I became president in 2011, I put these issues at the top of my agenda 

and they are still there. My first budget included the lowest tuition increase at our 

University in more than a decade, and for the past 2 years we achieved an historic 

tuition freeze for resident undergraduate students. That is, a zero increase in tuition 

for most of our students. 

This was a significant achievement, especially given State disinvestment, which, 

over the past decade, was among the steepest nationally. As you may know, from 

1999 to 2011, the investment per capita that States allocated to higher education 

declined about 23 percent. But in Minnesota, over that same 12-year period, the decline was 48 percent, putting us well below the national average of funding students 

in higher education and headed toward the lower quartile. We had begun that 12- 

year span in the upper quartile. 

Put another way: 15 years ago in Minnesota you showed up with a dollar to put 

toward the cost of a University education and the State showed up with two dollars. 

Now, a student and her family show up with a dollar, and the State of Minnesota 

shows up with just 50 cents. That is the magnitude of the cost shift from State support to increased tuition that our students and their families experienced. 

Today, while we have successfully reinvigorated our partnership with the State 

of Minnesota and it is reinvesting in its only land-grant university, we’re still 14 

percent below the level of State support we received 6 years ago. 

In the wake of such disinvestment, it was time for creativity and action. I’m 

thankful to Governor Mark Dayton and members of our legislature—on both sides 

of the aisle—for strengthening the State of Minnesota’s relationship with us. 

Specifically, we achieved that tuition freeze through shared accountability. First, 

the University pledged to tackle administrative costs. We pledged to redirect $90 

million over a 6-year period from administrative activities to support our missions. 

I’m pleased to report we’re ahead of schedule. We are doing more with less. We are 

teaching more students and graduating them at a far better 4- and 6-year rate. At 

the same time, our employee head count has remained relatively flat. 

The University also agreed to accountability targets. We pledged to State leaders 

that we would increase the number of invention disclosures by faculty, confirming 

our role as fueling the State’s innovation culture. We also pledged to increase the 

number of total graduates, the number of Science, Technology, Engineering and 

Math (STEM) students, and the graduation rates of students of color. We’ve kept 

our pledges. 

On the affordability front, we have also invested in financial aid to assist students 

and families. Overall, we award our students nearly $340 million of financial aid 

annually. If you are from a family with no ability to contribute to your education, 

State, Federal and institutional grant aid will cover your full cost of attendance at 

the university. 

While student debt is a critical national issue, these programs have helped offset 

the impact at Minnesota. Among our undergraduate class of 2013, 37 percent completed their degrees carrying no debt at all. Let me repeat: Zero debt. That is 6 

percentage points better than the national average of 31 percent of students graduating with no debt. 

Counting all students—those with debt and those without—the average per capita 

burden on our students when they graduate is about $16,500. That, to me, is a good 

investment, particularly when you consider that the lifetime earnings of college 

graduates are considerably greater than those in the workforce without degrees. 

Perhaps that’s why our students default at a rate of only about 3 percent, significantly below the national average. 

Our experience and data counters much of the national narrative about debt, 

which tends to focus on the ‘‘outliers,’’ the very small number of students with 

$75,000 or $100,000 in undergraduate debt. For students from families earning less 

than $30,000 per year, we are Minnesota’s most affordable higher education option, 

public or private. 

Our institutional commitment to financial aid includes the University of Minnesota Promise Scholarship Program (U Promise), which provides more than $30 

million annually in scholarships to more than 13,000 low- and middle-income Minnesota resident students. Eligible freshmen and new transfer students—including 

those eligible for the Minnesota Dream Act—with family incomes of up to $100,000 

receive a guaranteed, multi-year scholarship, ranging from $570 to $4,000 annually. 

We proactively award work-study funds to all new, eligible freshmen students. 

Our aim is to ensure that eligible students, especially low-income students, have an 

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opportunity to receive not only the financial benefits of a work-study-funded position, but also the academic and social benefits of working on campus. 

Affordability is a shared responsibility. The State of Minnesota provides a robust 

State Grant program. The Federal Government supplies Pell grants. And the University provides hundreds of millions of dollars in institutional aid, much of it 

through the generosity of donors. But we also must rely on another important team 

of partners—parents and students—who, if they are able, save for college, live prudently while they are enrolled, and complete their degrees in 4 years. 

One additional point that’s a pet peeve of mine: students and their families are 

regularly burdened by an often confusing and classically Byzantine collection of 

forms, applications, websites and passwords in the process of seeking financial aid. 

It is enough to discourage them from gaining access to aid. I urge the Federal Government to help simplify the financial aid process and regulatory burdens. 

PROMOTING STUDENT SUCCESS

To lower the cost of education for students, we made investments to enhance retention and increase graduation rates. If you don’t earn a degree at all, or it takes 

6 or more years, it’s simply more expensive. It adds years of tuition—and, often, onerous debt—to one’s personal balance sheet. 

Mr. Chairman, you can’t graduate students if you don’t retain them. Our firstyear student retention rate is now at about 91 percent, comparable to top-flight private schools. There is only a 0.5 percent difference in first-year retention rates between students of color and the rest of our freshmen. 

We are now focused on improving graduation rates for low-income and first-generation students. We have invested in programs specifically designed to achieve that 

goal. The President’s Emerging Scholars Program (PES) is an initiative designed for 

students who have faced challenges that may have negatively affected their high 

school metrics, but whose personal experiences and high school records indicate potential for collegiate success. 

The President’s Emerging Scholars Program ensures that students have the academic and personal support necessary to achieve academic success. It is built 

around three programmatic elements: 

(1) Activities that create a strong sense of belonging to the University community, 

including a summer seminar; 

(2) Academic guidance and support to ensure a successful and timely degree completion, including peer mentoring and professional advising; 

(3) And financial aid support to make a University education possible for eligible 

students if they remain on track. 

A related initiative—Retaining all Our Students—builds upon the success of the 

President’s Emerging Scholars Program. I was honored to attend the White House 

College Opportunity Summit last January to introduce this initiative. It focuses on 

improving the first-year retention of low-income University students, defined as Pell 

grant recipients, and is built around four components: 

(1) An enhanced financial literacy program specifically designed to meet the needs 

of low-income students and their families. When compared to other students, lowincome students are less familiar with the many possible sources of scholarships 

and other financial support, are less comfortable with taking out loans to support 

their education, and are less familiar with on-campus employment opportunities; 

(2) Incentives for low-income students to participate in a summer seminar to keep 

them educationally engaged when classes are not in session; 

(3) The development of better success-tracking tools for academic advisers to monitor the academic progress and enhance the advising of these students during their 

critical first year; 

(4) And promoting available services and connecting low-income students with 

peer tutors. 

These efforts build on State and Federal investments and help to guide low-income students toward graduation in a timely fashion, reducing debt and changing 

their lives. 

SHARED RESPONSIBILITIES

Let me turn now to the shared responsibility for an affordable, accessible and excellent higher education system in our State and Nation. In my view, those of us 

determined to positively shape the future of public higher education—particularly 

for our land-grant, major research universities—must forge a strong five-way partnership. 

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As this hearing today suggests, the States are central to this partnership. But, 

so, too, are universities, the Federal Government, business and industry, and students and families themselves. 

Specifically: 

The role of colleges and universities is to educate and graduate our students, 

along the way helping to transform them into lifelong learners and leaders, but we 

must demonstrate accountability for our costs, and innovation in delivering education; 

The role of our respective States is as critical as ever to invest in higher education and our students, and to partner with us and the private sector in economic 

development, job creation and workforce development; 

The role of industry and businesses is to work with institutions and government to help fund, prepare and hire our graduates, who are the States’ and Nation’s 

talent force; 

The role of students and their families is to aspire to success, and to strive 

to complete their degrees in 4 years, making smart and informed financial choices 

along the way; 

And, finally—but not least—you in Congress and the Federal Government 

have a critical role to fully and creatively support access for low-income students, 

support groundbreaking research, and, in so doing, advance larger national strategic 

goals for the common good. 

Each of us has responsibilities to strengthen this partnership and, in some cases, 

to adjust our past roles to address the needs of today—but more importantly, tomorrow and the years to come. It is not alarmist to State the Nation needs a diverse 

and highly educated workforce. It is a fact of global life. And we are all in this together. 

PROMOTING ECONOMIC DEVELOPMENT

Another way in which the University of Minnesota has been innovative is to forge 

a strong partnership with the State of Minnesota and its business community to 

promote economic development by matching the State’s needs with our world-class 

research. 

Last year, the State of Minnesota recognized that some areas of research impact 

its citizens directly, and the State is now playing a role in helping to invest in University projects that align with some of Minnesota’s key and emerging industries. 

In 2013, the legislature established the landmark Minnesota Discovery, Research 

InnoVation Economy initiative, or MnDRIVE. 

We identified four areas of opportunity that leveraged the University’s intellectual 

strengths with Minnesota’s business and industry strengths: 

• Robotics and sensors for advanced manufacturing at a time when Minnesota 

and the Nation need to rebuild our manufacturing base; 

• Global food ventures, a natural for a State in which nearly 20 percent of our 

economy is tied to agribusiness, and where we have a deep tradition in world-leading food production, protection and safety; 

• Water quality issues around mining, agriculture and other industries; 

• And brain conditions, mostly around neuromodulation, which will build on Minnesota’s strengths as the center for medical devices in the United States and the 

world. 

MnDRIVE is a new way for our State to partner with its flagship research institution. But, in the long run, I don’t believe that States can or should be expected to 

ever assume the critical research funding role historically played by the Federal 

Government through, among others, the National Institutes of Health, the National 

Science Foundation, the Department of Defense or the Department of Energy. 

We need the Federal Government to be an unwavering partner in this area. We 

need the Federal Government to strongly support the creation of knowledge at landgrant institutions at which it’s increasingly difficult for top researchers to gain 

grants, where junior researchers are struggling to obtain funding, and where, in the 

aftermath of the American Recovery and Reinvestment Act of 2009, research dollars 

have dried up. 

RECOMMENDATIONS/SUGGESTIONS

In closing, where does this leave us? As you reconsider the Higher Education Act, 

I would encourage you to examine incentives to stop the decline of State investment, 

to promote affordability and access, to support partnerships, and to fuel innovative 

programs that aid our students. 

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Specifically, the University of Minnesota supports incentives to award Federal financial aid funding to institutions with high retention and graduation rates. Congress needs to make sure that Federal funds go to institutions that see their students succeed, advance in a timely fashion toward a degree, and, so, not incur unnecessary and excessive debt. 

The University of Minnesota would also support a move to a One Grant/One Loan/ 

One Work program. As I mentioned earlier, the financial aid process is often confusing and cumbersome. One Grant/One Loan/One Work would streamline a system 

that is overly complicated for the student and overly burdensome for the institution. 

We would also support simplification of the Free Application for Student Aid Form, 

or FAFSA. These changes would result in no additional expense to the taxpayer. 

Finally, we urge you to look at the regulatory burdens imposed on us by the Federal Government on financial aid matters and throughout our extensive research enterprise. Excessive regulatory burden is expensive, adding to our administrative 

costs and draining funds from our educational and research mission. 

CONCLUSION

Mr. Chairman, higher education is often accused of being aloof, of being ‘‘academic,’’ of residing in that mythical ‘‘ivory tower.’’ We are far from that. We are here 

on the front lines of innovation and job creation, of saving lives and nurturing new 

knowledge and ideas. Despite the historic cutbacks in our States, we continue to be 

called on everyday to solve our State’s and Nation’s Grand Challenges. In new and 

efficient ways, we are fulfilling our land-grant mission as first envisioned by Congress and President Abraham Lincoln 152 years ago. 

Members of the committee, we are worthy of your continued and increased support. We want to be your partners. We’re all in this noble endeavor—to provide affordable excellence that leads to timely graduation for students from all economic 

backgrounds—together. It’s our shared responsibility so that the next generation 

can share in our Nation’s successes. 

Thank you for this opportunity. 

The CHAIRMAN. Thank you very much, Dr. Kaler. 

Mrs. Lubbers, welcome. Please proceed. 

STATEMENT OF TERESA LUBBERS, COMMISSIONER, INDIANA 

COMMISSION FOR HIGHER EDUCATION, INDIANAPOLIS, IN 

Ms. LUBBERS. Chairman Harkin, Senator Alexander, and members of the committee, thank you for this opportunity to testify. I 

serve as commissioner of Indiana’s Coordinating Board of Higher 

Education. My testimony will emphasize that higher education is 

a shared responsibility among the States, institutions and students, and will underscore the importance of aligning Federal policies and funding with State student success agendas. 

I just returned from the annual meeting of the State Higher 

Education Executive Officers. Across the country we have many 

common challenges. Too few students make it to the finish line. 

On-time completion is the exception, especially for low-income and 

first-generation students. Our work across State lines helps us 

learn from each other, including in difficult areas such as ensuring 

academic quality. 

Indiana’s sense of urgency may be greater than some States 

since we face an economy that no longer guarantees a good quality 

of life without education or training beyond high school. It’s no coincidence that Indiana’s per capita personal income and education 

attainment levels are nearly the same, around 40th in the Nation. 

We must convince Hoosiers that hard work and postsecondary credentials are required for the jobs that propel individuals and families up the economic ladder. 

Our goal in Indiana is to ensure that more students complete 

postsecondary credentials on time and at the least possible cost. 

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13 

Today I will highlight what we’re doing to reach this goal, share 

how our colleges are responding, and offer a few recommendations 

based on the lessons we learned. 

What have we done in Indiana? First, we measure what we 

value. We publish three annual reports that are simple to understand and focus on our most important success metrics. The first 

indicates whether our students are ready for college. The second 

shows whether they graduate, and how those results differ by income, race, and ethnicity. The third conveys graduates’ return on 

investment, their career opportunities balanced against the cost 

and debt they incur. 

Our reports demonstrate that affordability is not just about tuition, though efforts like Purdue University’s 3-year tuition freeze 

certainly help. Costs escalate unnecessarily when students take 

longer than they need and borrow more money than they should. 

Further, many of the stumbling blocks students face are not of 

their own making. In Indiana, we reined in ‘‘credit creep,’’ extra 

credits that extended program length and time to degree. This commonsense change saved students time and money, about $35 million per year. 

Another recent law provides each student with a degree map 

that guarantees courses are available and prevents scheduling snafus that delay graduation. We also discovered that many students, 

even our student leaders, think that 12 credits per semester is 

enough to graduate on time, so we are rolling out a 15-to-Finish 

campaign to make it clear that full-time is 15. 

We also pay for what we value. Our performance funding model 

rewards college completion and on-time graduation while embracing differing missions and upholding our commitment to at-risk 

students. We recently restructured State financial aid so that students take and complete the 30 credits they need each year to 

graduate within the 4-years the State will finance. 

How are colleges responding? They are changing the message 

they send to students. Indiana University reduced borrowing 11 

percent in 1 year by telling students how much debt they had accumulated and what their monthly payment would be. Their Indianapolis campus doubled the percent of students taking 15 credits by 

changing their advising protocol to make 15 the default. 

Colleges are removing other stumbling blocks. Our community 

college system improved the success rate of students unprepared in 

math from 9 percent to 50 percent by delivering remediation at the 

same time students take credit-bearing work. 

Colleges are being proactive to help students succeed. Indiana 

State University now alerts students who are falling short of meeting the new State credit completion requirements, offering them 

free summer tuition and discounted housing so they can catch up. 

What have we learned, and what do we recommend? We learned 

that what we measure demonstrates what we value. We encourage 

the Federal Government to continue its progress toward measuring 

all students’ success, not just that of first-time, full-time students. 

We learned that we can move stubborn numbers in a big way 

with the messages we send. We recommend that the Federal Government provide the same straightforward ‘‘truth in lending’’ for 

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14 

student loans that it has previously backed for mortgages and credit cards. 

We learned that financial aid policies drive institutional structures, which in turn drive student choices. We recommend that the 

Federal financial aid system do its part to increase affordability in 

three key ways: define full-time as 15 credits per semester, not 12; 

pay for completed courses, not attempted courses; and, as proposed, 

fund summer Pell so that summer can be used to either catch up 

or get ahead. 

I thank you for this opportunity to testify and will happily answer any questions. 

[The prepared statement of Ms. Lubbers follows:] 

PREPARED STATEMENT OF TERESA LUBBERS

SUMMARY

Across the country we have many common challenges: too few students make it 

to the finish line. On-time completion is the exception, especially for low-income and 

first generation students. Our work across State lines helps us learn from each 

other. Our goal in Indiana is to ensure that more students complete postsecondary credentials on time and at the least possible cost. 

WHAT HAVE WE DONE IN INDIANA?

We measure what we value and use data to drive policy change. 

• Reined in ‘‘credit creep’’—extra credits that extended program length and time 

to degree. 

• Provide each student with a degree map that guarantees courses are available 

and prevents scheduling snafus that delay graduation. 

• Rolling out a 15-to-Finish campaign to make it clear that full-time is 15. 

We pay for what we value. 

• Performance funding model rewards college completion and on-time graduation. 

• State financial aid restructured so that students take and complete the credits 

they need to graduate on-time. 

HOW ARE INDIANA COLLEGES RESPONDING?

• They are changing the message they send to students—IU loan advising, advising protocols. 

• They are removing other stumbling blocks—Ivy Tech remediation reform. 

• They are being proactive to help students succeed—ISU outreach and free summer tuition. 

WHAT HAVE WE LEARNED, AND WHAT DO WE RECOMMEND?

• What we measure demonstrates what we value. Recommend: support ongoing 

efforts to expand IPEDS reporting beyond first-time, full-time students. 

• We can move stubborn numbers in a big way with the messages we send. Recommend: the Federal Government provide ‘‘truth in lending’’ for student loans. 

• We learned that financial aid policies drive institutional practices, which in 

turn drive student choices. Recommend: changes to Federal financial aid to increase 

affordability by limiting time to degree. 

Define full-time as 15 credits, not 12. 

Pay for completed courses, not attempted courses. 

Fund summer Pell so that summer can be used to either catch up or get ahead. 

Chairman Harkin, Ranking Member Alexander and members of the committee, 

thank you for the opportunity to testify. My name is Teresa Lubbers, and I serve 

as Commissioner of Indiana’s coordinating board for higher education. My testimony 

will emphasize that higher education is a shared responsibility among the States, 

institutions and students, and will underscore the importance of aligning Federal 

policies and funding with State student success agendas. 

I just returned from the annual meeting of the State Higher Education Executive 

Officers. Across the country we have many common challenges: too few students 

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15 

make it to the finish line. On-time completion is the exception, especially for lowincome and first-generation students. Our work across State lines helps us learn 

from each other, including in difficult areas such as ensuring academic quality. 

Indiana’s sense of urgency may be greater than some States since we face an 

economy that no longer guarantees a good quality of life without education or training beyond high school. It’s no coincidence that Indiana’s per capita personal income 

and education attainment levels are nearly the same—around 40th in the Nation. 

We must convince Hoosiers that hard work AND postsecondary credentials are required for the jobs that propel individuals and families up the economic ladder. 

Our goal in Indiana is to ensure that more students complete postsecondary credentials on time and at the least possible cost. Today I will highlight what we’re 

doing to reach this goal, share how our colleges are responding, and offer a few recommendations based on the lessons we learned. 

WHAT HAVE WE DONE IN INDIANA?

First, we measure what we value. We publish three annual reports that are simple to understand and focus on our most important success metrics. The first indicates whether our students are ready for college. The second shows whether they 

graduate, and how those results differ by income, race and ethnicity. The third conveys graduates’ return on investment: their career opportunities balanced against 

the cost and debt they incur. 

Our reports demonstrate that affordability is not just about tuition, though efforts 

like Purdue University’s 3-year tuition freeze certainly help. Costs escalate unnecessarily when students take longer than they need and borrow more than they should. 

Further, many of the stumbling blocks students face are not of their own making. 

In Indiana, we reined in ‘‘credit creep’’—extra credits that extended program length 

and time to degree. This common-sense change saved students time and money— 

about $35 million per year. Another recent law provides each student with a degree 

map that guarantees courses are available and prevents scheduling snafus that 

delay graduation. We also discovered that many students—even our student leaders—think that 12 credits is enough to graduate on-time, so we are rolling out a 

15-to-Finish campaign to make it clear that full-time is 15. 

We also pay for what we value. Our performance funding model rewards college 

completion and on-time graduation while embracing differing missions and upholding our commitment to at-risk students. We recently restructured State financial aid 

so that students take and complete the 30 credits they need each year to graduate 

within the 4-years the State will finance. 

HOW ARE COLLEGES RESPONDING?

They are changing the message they send to students: Indiana University reduced 

borrowing 11 percent in 1 year by telling students how much debt they had accumulated and what their monthly payment would be. Their Indianapolis campus doubled the percent of students taking 15 credits by changing their advising protocol 

to make 15 the default. 

Colleges are removing other stumbling blocks: Our community college system improved the success rate of students underprepared in math from 9 percent to 50 percent by delivering remediation at the same time students take credit-bearing 

coursework. 

Colleges are being proactive to help students succeed: Indiana State University 

now alerts students who are falling short of meeting the State’s new credit completion requirements—offering them free summer tuition and discounted housing so 

they can catch up. 

WHAT HAVE WE LEARNED, AND WHAT DO WE RECOMMEND?

We learned that what we measure demonstrates what we value. We encourage 

the Federal Government to continue its progress toward measuring all students’ 

success, not just that of first-time, full-time students. 

We learned that we can move stubborn numbers in a big way with the messages 

we send. We recommend that the Federal Government provide the same straightforward ‘‘truth in lending’’ for student loans that it has previously backed for mortgages and credit cards. 

We learned that financial aid policies drive institutional structures, which in turn 

drive student choices. We recommend that the Federal financial aid system do its 

part to increase affordability in three key ways: 

• Define full-time as 15 credits, not 12; 

• Pay for completed courses, not attempted courses; and 

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16 

• As proposed, fund summer Pell so that summer can be used to either catch up 

or get ahead. 

I thank you for the opportunity to testify today and would happily answer any 

questions. 

The CHAIRMAN. Thank you very much, Ms. Lubbers. Great testimony. 

All right. Attorney General Madigan. 

STATEMENT OF HON. LISA MADIGAN, ATTORNEY GENERAL, 

STATE OF ILLINOIS, CHICAGO, IL 

Ms. MADIGAN. Chairman Harkin, Ranking Member Alexander, 

and members of the committee, thank you for giving me an opportunity to share the problems I see at the State level that relate to 

your work on higher education at the Federal level. 

As the chief consumer advocate for the State of Illinois, I have 

seen an increasing number of fraud complaints from current and 

former higher education students over the past several years. The 

most frequent complaints involve for-profit schools, loan servicing, 

and student loan debt relief scams. 

Complaints against for-profit schools this year are over 50 percent of the complaints my office has received regarding higher education. Given the committee’s work in this area, I know you are 

well aware of the billions of taxpayer dollars that have gone to 

funding for-profit schools that heavily advertise their high-cost and 

poorly accredited programs. Too often, these schools are failing to 

provide students an opportunity to attain a job in the field they 

seek and instead are responsible for a disproportionately high rate 

of loan defaults. 

I’ve testified on these concerns before, so let me simply again 

urge the committee to address the pervasive problems with some 

of these so-called schools that have undermined the chances of too 

many students, squandered billions of our tax dollars, and put a 

drag on our economy. You have the power to put an end to for-profit abuses, and you should not hesitate to do so. 

Another area where we are seeing a growing number of complaints is Federal student loan servicing. This area is extremely 

problematic and extremely confusing for borrowers to contend with. 

There are many kinds of Federal loans, and there are a variety of 

repayment programs available. Unfortunately, the complaints we 

are seeing are reminiscent of those we saw during the mortgage 

and foreclosure crisis. 

Borrowers who contact us are usually seeking help with repayment options because the companies operating as Federal student 

loan servicers are not meeting the needs of these borrowers. When 

we’ve told struggling borrowers to contact their servicers for help, 

they call us back and report that instead of the servicers explaining 

their options and working to assist them to choose the best one, 

borrowers are pressured to get their loans current instead of being 

given information about repayment options. 

Due to the growing number of these types of complaints and the 

expertise we gained during the mortgage and foreclosure crisis, Illinois is currently leading a multi-State investigation into Sallie 

Mae’s practices. 

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Because of the complexity and confusion surrounding Federal 

loan programs and repayment options, the millions of Americans 

struggling to make their payments have become targets of the most 

recent wave of debt relief scams. Scammers are filling the airways 

with ads making too-good-to-be-true claims about how they can reduce your student debt by half or have your loans completely eliminated. Needless to say, when desperate borrowers call the number 

in the ads, they’re pressured to make large up-front payments, 

often in excess of $1,000 for services that borrowers should receive 

at no cost because they are government programs provided for free 

by the Department of Education. 

Last week, I filed the first two lawsuits going after these student 

loan debt relief operations. However, investigations and enforcement actions at the State level are only part of the solution. Let 

me make some suggestions for action at the Federal level as well. 

Most importantly, higher education students need to be better 

protected under Federal law. With respect to for-profit schools, 

Congress must place better controls over Title 4 funds to ensure 

they are only used to help students achieve affordable, quality 

higher education. And Congress should support the Department of 

Education’s rulemaking to increase accountability of for-profits. 

For companies engaged in student loan servicing, Congress 

should create a uniform process for all student loan servicers to follow. I would propose following the detailed model that we drafted 

for mortgage servicers in the National Foreclosure Settlement. 

Servicers should be required to tell struggling borrowers all their 

options, and borrowers need assistance to determine which option 

is best for their situation. To facilitate this, Congress should seriously consider making counselors available to student borrowers, 

just as counselors are available to help homeowners struggling to 

pay their mortgages. 

In addition to the reforms needed in student loan servicing, people struggling to repay their student loans need better and easier 

access to Federal student loan repayment options available through 

the Department of Education. The rise of student debt relief scams 

can be attributed to the fact that borrowers are unaware of Federal 

programs or have a difficult time understanding and accessing the 

programs available to them. These options need to be transparent, 

accessible, and streamlined. The Department of Education should 

increase public awareness to current and former students so they 

know there are free government programs available to help them. 

We should also prevent them from contacting the growing number 

of scammers who only seek to take their money. 

Finally, Congress should pass a bill allowing students to refinance their Federal loans to take advantage of the lower interest 

rates available today. When homeowners were struggling to pay 

their mortgages, the Federal Government stepped in to offer loan 

modifications and refinancing options. At the very least, we should 

offer these options to our country’s young people who are struggling 

to pay back their loans. Student loan debt should not prevent millions of them from fully participating in the economy or ever 

achieving financial security. 

I appreciate the work this committee has done to address the 

problems current and former students are facing paying for their 

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higher education, and I look forward to answering your questions. 

Thank you. 

[The prepared statement of Ms. Madigan follows:] 

PREPARED STATEMENT OF HON. LISA MADIGAN

SUMMARY

The testimony is divided into three parts: (1) the role of the Attorney General in 

higher education; (2) the office’s work protecting higher education students; and (3) 

recommendations for the committee to consider as it works to reauthorize the Higher Education Act. 

Role of the Attorney General in Higher Education. As a State attorney general, I have the responsibility to protect the consumers of my State. My role in higher education is no different than my role in other areas where I work to protect consumers. 

Protecting Illinois Students. In recent years, my office has received higher education complaints from students with increasing regularity. Overwhelmingly, these 

complaints are against three types of companies involved in higher education: forprofit schools; student loan servicers; and, more recently, companies purporting to 

offer student debt relief services. 

For-Profit Schools. Through my office’s work, we have learned that some forprofit schools are gaming our higher education system. 

Student Loan Debt Relief Scams. Because many former students are having 

a difficult time paying down their student debt, a new scam looking to take advantage of these students has been created—it is called student loan debt relief. 

Student Loan Servicing Companies. My office continues to investigate student 

loan servicing—including leading a multistate investigation of the student loan 

servicer, Sallie Mae, now called Navient. 

Recommendations for the Committee. My office’s work in these areas—forprofit schools, student debt relief scams, and student loan servicing—is having an 

impact. State attorneys general can and do change the behavior of industry through 

our investigations and lawsuits. These outcomes certainly apply to higher education 

as well. However, our role at the State level is only part of the equation. We need 

action at the Federal level. 

Most importantly, higher education students need to be better protected under 

Federal law. Congress should make stronger consumer protections apply to the private companies that play a role in higher education. These companies include both 

for-profit schools and student loan servicers. 

The Department of Education should create a public awareness campaign to get 

through to current and former higher education students so they know there are 

programs available that can help them. 

Finally, Congress should pass a bill allowing students to refinance their Federal 

loans to take advantage of the lower interest rates available today. 

Chairman Harkin, Ranking Member Alexander, and members of the committee, 

thank you for inviting me to testify today. 

At the State level, one of our foremost concerns and priorities is to have a highly 

qualified workforce available to attract and retain businesses that provide our residents jobs. 

The only way to achieve that goal is to ensure affordable, high quality higher education opportunities for our residents. 

I appreciate the opportunity to share what we have learned about the challenges 

facing higher education students in Illinois—first, as they seek higher education, 

and, later, as they work to pay off the debt they accumulated obtaining that education. 

In recent years, my office has seen a significant increase in the number and scope 

of complaints from current and former higher education students. 

To assist the committee today, I am dividing my testimony into three parts: 

• I will explain my role in higher education as the Attorney General of Illinois; 

• I will share my office’s work protecting higher education students; and 

• Finally, I will provide recommendations for the committee to consider as it 

works to reauthorize the Higher Education Act. 

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ROLE OF THE ATTORNEY GENERAL IN HIGHER EDUCATION

As a State attorney general, I have the responsibility to protect the consumers 

of my State. My role in higher education is no different than my role in other areas 

where I work to protect consumers. When high school students or non-traditional 

students begin the process of pursuing higher education, it often marks one of the 

biggest purchases they will make in their lives. They are taking on loans that can 

add up to tens of thousands of dollars, if not more. 

While we call them ‘‘students,’’ they are acting as consumers when they seek higher education and these students deserve protections, like all consumers. 

In my role, I have ensured that my office understands the challenges facing higher education students and that we take steps to protect them. Unfortunately, I have 

repeatedly seen circumstances where companies involved in higher education are 

taking advantage of students. 

PROTECTING ILLINOIS STUDENTS

In recent years, my office has received higher education complaints from students 

with increasing regularity. Overwhelmingly, these complaints are against three 

types of companies involved in higher education: for-profit schools; student loan 

servicers; and, more recently, companies purporting to offer student debt relief services. 

For-Profit Schools 

My office currently has one active lawsuit against a for-profit school, as well as 

a number of open investigations into the conduct of other for-profit schools operating 

within Illinois. 

I have also joined a multistate investigation into the conduct of for-profit schools 

with 17 other State attorneys general. 

While I cannot go into detail on the specifics of each investigation, I can share 

why State attorneys general across the country, from both political parties, are 

suing and investigating for-profit schools. 

Since 2010, over a thousand current and former higher education students have 

filed complaints with my office about the practices of for-profit schools. These students wanted nothing more than to go to school and better their lives. But too many 

of them ended up struggling to pay for an expensive education that did not give 

them the skills necessary to obtain meaningful employment. 

Through my office’s work, we have learned that some for-profit schools are gaming 

our higher education system. They are using aggressive marketing tactics to lure 

unsuspecting students, who have access to Federal loans, into entering exorbitantly 

priced programs that will not help them secure employment. In fact, tuition prices 

can be so high that Federal student aid is often not enough, and students are 

steered into high-cost institutional loans that saddle them with more debt while 

maximizing profits for schools. 

For example, we have heard from students who paid tens of thousands of dollars 

to obtain degrees or certificates from for-profit schools, only to find out that employers did not recognize the certificates or degrees from the for-profit schools the students attended. The schools did not have the proper accreditation, but they led potential students to believe that they did. 

For our State and the Federal Government, outcomes like these mean lost opportunities to train individuals for the workforce and wasted taxpayer dollars. The Federal Government has provided billions of dollars of loans to students attending these 

for-profit schools. 

And for the students, it means tens of thousands of dollars of debt with no better 

chances at finding employment. 

This dangerous combination of high debt and few job prospects means that a lot 

of these students have a hard time paying off their student loans. And the statistics 

confirm it. 

Students of for-profit schools are more likely to default on their loans than their 

counterparts at public institutions and private, non-profit institutions. 

But we cannot ignore the fact that default is a problem for graduates of all kinds 

of higher education programs and that unscrupulous companies are now targeting 

students who are struggling to pay off their Federal loans. 

Student Loan Debt Relief Scams 

Because many former students are having a difficult time paying down their student debt, a new scam looking to take advantage of these students has been created—it is called student loan debt relief. 

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These companies offer student loan debtors bogus services or charge for services 

that the Federal Government already offers for free. And they are making empty 

promises in TV and radio ads and on the Internet, including claims to provide: 

• Help with enrollment in the ‘‘Obama forgiveness program,’’ which is not an actual government program; 

• Free help to anyone with at least $10,000 dollars in student loan debt; and 

• Free loan forgiveness information for teachers, nurses, government employees, 

police officers, firefighters and employees of non-profit companies. 

For these so-called services, the companies charge huge up-front fees—sometimes 

more than $1,000. And in some instances, we discovered they provided no assistance 

to the people who paid for their help, or the companies charged students for simply 

providing government forms easily accessible for free on the Federal Government’s 

websites. 

We have seen these kinds of scams before. 

When the recession hit, people had trouble paying off their credit card debt. In 

response, companies began offering bogus credit card debt relief services that took 

advantage of people and left them worse off financially. 

When the housing crisis hit, the same scammers targeted homeowners who were 

having trouble making payments on their mortgages. 

Student loan debt relief is just the latest iteration of an ongoing scam. 

The scam violates a number of Illinois laws, including a law on debt settlement 

that my office crafted and the legislature passed in 2010, which bans up-front fees— 

the Debt Settlement Consumer Protection Act. 

Last week, my office filed lawsuits against two companies engaging in this scam. 

We will continue to pursue companies like these until we put a stop to these practices. 

However, the companies that engage in these scams are mere symptoms of a larger problem. Too many former students are having a hard time paying down their 

student debt. 

In many cases, they are not aware of the options available to them. Student loan 

debtors can have a hard time getting the right person on the phone. And they are 

not receiving information on the options available to them for repaying their loans. 

This massive confusion provides an easy opening for scammers. 

Student Loan Servicing Companies 

That is why, in addition to these lawsuits my office continues to investigate student loan servicing—including leading a multistate investigation of the student loan 

servicer, Sallie Mae, now called Navient. 

RECOMMENDATIONS FOR THE COMMITTEE

My office’s work in these areas—for-profit schools, student debt relief scams, and 

student loan servicing—is having an impact. State attorneys general can and do 

change the behavior of industry through our investigations and lawsuits. These outcomes certainly apply to higher education as well. However, our role at the State 

level is only part of the equation. We need action at the Federal level. 

Most importantly, higher education students need to be better protected under 

Federal law. Congress should make stronger consumer protections apply to the private companies that play a role in higher education. These companies include both 

for-profit schools and student loan servicers. 

With respect to for-profit schools, Congress must place better controls over title 

IV funds to ensure they are only used to help students achieve high quality, affordable higher educations. These funds are too important to be misused. For those institutions that do misuse funds, Congress should ensure there are strong civil penalties for doing so. 

For companies engaged in student loan servicing, Congress should create standards that all student loan servicers must follow. To protect borrowers, we need protections in place that are above and beyond the general prohibitions against unfair 

and deceptive practices in State consumer fraud acts. These standards need to ensure that servicers make clear to borrowers what their repayment options are. 

Standards would help eliminate the confusion and lack of information that borrowers are currently experiencing. Congress should also make sure counselors are 

made available to student loan borrowers, just as they are made available to borrowers with mortgages. 

In addition to the reforms needed in student loan servicing, people struggling to 

repay their student loans need better and easier access to student loan repayment 

options available through the Department of Education. 

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The rise of student debt relief scams can be attributed to students being unaware 

of Federal programs or having a hard time understanding the programs available 

to them. This system needs to be streamlined and it needs to be more accessible. 

At the very least, the Department of Education should create a public awareness 

campaign to get through to current and former higher education students so they 

know there are programs available that can help them. The scammers have advertisements and these advertisements are working. We need ads highlighting real programs to counteract them. 

Finally, Congress should pass a bill allowing students to refinance their Federal 

loans to take advantage of the lower interest rates available today. This bill recently 

stalled in the Senate and there is no justification for Congress’s failure to help these 

students. 

CONCLUSION

Student debt poses a large and growing threat to our economy. In Illinois, and 

across the country, because too many people are unemployed or underemployed, 

they are having a hard time keeping up with their student debt obligations. And 

if Congress can take steps—like lowering the interest rates on student loans—to 

help those people, it should do it. 

I have seen what happens to people when they fall behind on their student loan 

payments. It can take years for them to get themselves back on solid financial 

ground. 

Just as the housing crisis has trapped millions of borrowers in mortgages that are 

underwater, student debt could very well prevent millions of Americans from fully 

participating in the economy or ever achieving financial security. The warning signs 

are there. Just like they were there before the housing crisis. And Congress needs 

to act before it is too late. 

As an attorney general, I can bring cases against bad actors. And I will continue 

to do so. But we need more effort on the front end, to prevent those bad acts from 

happening in the first place and to prevent students from falling into the vicious 

cycle that unpaid debt brings. 

I am available to answer any questions you have. Thank you. 

The CHAIRMAN. Thank you very much, Attorney General Madigan. 

And now we turn to Dr. Perna. 

STATEMENT OF LAURA W. PERNA, Ph.D., PROFESSOR AND 

CHAIR OF THE HIGHER EDUCATION DIVISION, UNIVERSITY 

OF PENNSYLVANIA, PHILADELPHIA, PA 

Ms. PERNA. Chairman Harkin, Ranking Member Alexander, and 

members of the committee, thank you for inviting me to offer comments on the role of States in improving higher education attainment, especially for students from historically underrepresented 

groups. I have devoted my career to conducting research on these 

topics, and I’m delighted to have the opportunity to speak with you. 

My written comments have more detail on some of my relevant 

research, including results of an in-depth study of the relationship 

between public policy and educational attainment in each of five 

States. In my 5 minutes, I’d like to underscore five points. 

First, as a Nation, we must do more to close the considerable 

gaps that persist across groups and the opportunity to enroll in college and complete a degree. Whether someone attends and completes college should not depend on their family income, the color 

of their skin, or the State and locality where they happen to live. 

These differences in college attainment contribute to a society that 

is highly stratified based on demographic characteristics between 

the haves and the have-nots. Closing gaps in college opportunity 

and attainment is important for social justice reasons. It’s also important for the economic and social well-being of our communities. 

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Second, we must recommit to the public purposes and benefits of 

higher education. Our Nation’s approach to funding the costs of 

higher education increasingly reflects an emphasis on the private 

benefits—that is, the ways that individuals who participate in college are benefiting. These benefits to individuals are clearly substantial, and they’ve been growing in recent years. An emphasis on 

the private benefits provides a rationale for explaining why students and families are responsible for growing shares of the cost 

of attending college and why more and more students are borrowing ever larger amounts. But a narrative that emphasizes the 

private benefits of higher education obscures the many ways that 

the public also benefits when educational attainment increases and 

gaps in attainment close. 

Certainly, many demands compete with higher education for 

available public resources, but investing the resources we have into 

promoting higher education attainment and closing gaps in attainment is one of the best investments we can make. 

The third point I’d like to emphasize, through the student financial aid programs and other components of the Higher Education 

Act, the Federal Government plays an important role in leveling 

the playing field of higher education. Despite the critical role of 

Federal programs, however, States have the primary responsibility 

for raising the attainment of their populations as each State develops its own public higher education and K–12 education system. 

Fourth, if we are to make meaningful progress in raising attainment and closing gaps in attainment, we need a more comprehensive approach. There is no silver bullet for solving higher education 

attainment that will fit the circumstances of all States. Aligning 

policies at the Federal and State levels will help to maximize the 

benefits of the resources that are allocated toward higher education 

and help ensure that State and Federal policies do not work at 

cross-purposes. A more comprehensive approach would specify the 

roles and responsibilities of the Federal Government, State governments, and colleges and universities. 

Fifth, Federal-State partnerships are one potentially productive 

mechanism for developing this more comprehensive approach. 

Through such partnerships, Federal policymakers, including the 

White House, congressional leaders, and the Department of Education, can encourage an ongoing public dialog with State Governors that advances more purposeful planning for the future of 

higher education. 

Federal-State partnerships should be oriented toward addressing 

what we know are the primary barriers that limit higher education 

attainment for too many students. If we are to raise overall attainment and close gaps in attainment, we need public policies that ensure that college is affordable. We need policies that ensure that 

students can move successfully from K–12 into higher education 

and transfer among higher education institutions without loss of 

academic credit. We need policies that ensure that students have 

access to high-quality higher education opportunities. 

We also need to do more to ensure that students and their families have the knowledge, not just the information required to successfully navigate our Nation’s large and diverse system of higher 

education. We also need to ensure that students learn about and 

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understand the many nuances of student financial aid and that 

they are not over-burdened by debt when they leave higher education. 

We also need to ensure the availability of data that enable us to 

monitor the effectiveness of the public policies that are in place so 

that we can make adjustments. Any Federal-State partnerships to 

achieve these goals should be designed to incentivize States, not 

regulate States or create price controls. Through incentives, Federal-State partnerships can encourage States to develop and adopt 

more effective systemic and comprehensive approaches. Particularly productive would be partnerships designed to improve college 

affordability and finding innovative approaches to the many complex problems that are driving up the challenges in higher education. 

Thank you for your attention. I welcome additional conversation. 

[The prepared statement of Dr. Perna follows:] 

PREPARED STATEMENT OF LAURA W. PERNA, PH.D. 

SUMMARY

The Higher Education Act is a key mechanism for raising the Nation’s overall 

higher education attainment and closing the considerable gaps in higher education 

attainment that persist across groups. I applaud the committee for its attention during this reauthorization process to the topic of today’s hearing: The Role of States 

in Higher Education. 

Drawing from a recent comprehensive in-depth examination of the relationship 

between State policy and educational attainment in five States, I offer five conclusions that are particularly relevant to understanding the role of States in higher 

education. First, the relationship between public policy and higher education attainment cannot be understood without considering the State context, including the 

characteristics of a State’s higher education system and governance structures. Second, improving higher educational attainment requires State policy leadership and 

steering of higher education institutions to achieve statewide goals. Third, State 

policies must be oriented toward ensuring that college is affordable, that students 

can move from K–12 schools into higher education institutions and can transfer 

among higher education institutions without loss of academic credit, and that highquality higher education options are available to all State residents. Fourth, public 

policies must be oriented toward leveling the playing field for higher education attainment. Finally, States must continually monitor the extent to which their collection of public policies is effectively promoting the State’s overall higher education 

attainment and closing gaps in attainment across groups, and make necessary adjustments in these policies. 

Based on this and other research, I recommend that the Higher Education Act 

be amended to include ‘‘Federal-State partnerships’’ for raising overall higher education attainment and reducing gaps in attainment across groups. Explicit FederalState partnerships would recognize that a comprehensive approach with specified 

roles of multiple actors is required if we are to successfully raise overall rates of 

higher education attainment and close gaps in attainment across groups. One productive Federal-State partnership would focus on improving college affordability. A 

second type of Federal-State partnership would encourage the development of more 

effective and innovative approaches to addressing the complex, systemic issues that 

limit college opportunity especially for students from low-income families, racial/ethnic minority groups, and other groups that are underrepresented in higher education. In a third type of Federal-State partnership, the Federal Government would 

incentivize States to promote college-related knowledge among prospective college 

applicants. 

Thank you for the opportunity to offer comments on the role of States in improving higher education attainment, especially for students from historically underrepresented groups. As I have devoted my career to conducting research designed to 

understand how to improve college access and success especially for students from 

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24 

underrepresented groups, I am delighted to have the opportunity to speak with you 

today. 

Improving higher education is critically important to both individuals and our society. In this global, technologically driven economy, available jobs increasingly require some education beyond high school. But, the United States cannot achieve the 

levels of educational attainment that are required for international competitiveness 

without closing the gaps in attainment that persist based on family income, race/ 

ethnicity, and other demographic characteristics. Students from low-income families 

are less likely than students from higher-income families to enroll in college, and 

when they do enroll, they tend to attend less selective postsecondary education institutions and have lower completion rates. Data from one longitudinal study show 

that only 11 percent of adults whose parents had been in the lowest-income quintile 

earned a college degree, compared with 53 percent of adults whose parents had been 

in the top-income quintile. Educational attainment also varies considerably based on 

other characteristics, including the State, region, and locality in which an individual 

resides. Closing these substantial gaps in higher education attainment is important 

to the economic competitiveness of our Nation, as well as for social justice reasons. 

Higher education produces countless benefits for individuals—including higher earnings, better working conditions, higher rates of employment, lower rates of unemployment and poverty, better health, and longer life expectancies, as well as numerous benefits for our society, including greater economic productivity, less reliance on 

social welfare programs, greater civic engagement and charitable giving, and higher 

rates of voting. Raising our Nation’s educational attainment and closing gaps in attainment across groups is also needed to counteract the considerable and growing 

income inequality that exists in the United States. 

Many stakeholders, including the Federal and State governments, as well as students and their families, K–12 schools and higher education institutions, employers, 

and philanthropic organizations, have roles to play in closing gaps in higher education attainment. 

The Higher Education Act is a key mechanism for advancing this goal. As I and 

others have written elsewhere, the financial aid programs authorized under title 

IV—especially the Federal Pell grant—are critical to reducing the financial barriers 

to college attendance for students from low-income families. The TRIO programs are 

important to promoting the successful transition into and through college for many 

low-income and first-generation college students and have expanded college opportunity for groups that had previously been excluded. I applaud the committee’s attention to the ways that the benefits of these and other programs may be enhanced 

by making such changes as simplifying the financial aid application process, standardizing the financial aid award letter, and addressing some of the negative consequences of using loans to pay college costs. 

I also applaud the committee for its attention to the topic of today’s hearing: The 

Role of States in Higher Education. 

In our Federalist system, States have the primary responsibility for improving the 

higher education attainment of their residents. In a new book entitled, The Attainment Agenda: State Policy Leadership for Higher Education, my Penn GSE colleague 

Joni Finney and I provide complete results of a comprehensive examination of the 

relationship between State policy and higher education. For this study, we conducted in-depth case studies of this relationship in five purposively selected States: 

Georgia, Illinois, Maryland, Texas, and Washington. 

Five conclusions are particularly relevant to today’s hearing. 

First, the relationship between public policy and higher education attainment cannot be understood without considering the State context. We found different stories 

about the relationship between public policy and higher education attainment in 

each of the five States we examined. These different State stories are not surprising, 

given that these five States—and all 50 States—vary greatly in terms of many characteristics, including their need for improved educational attainment and the magnitude of gaps in educational attainment across groups, as well as the size and diversity of their higher education systems and their varied higher education governance structures. They also vary in terms of their demographic, economic, political, 

and historical characteristics. Any Federal policy intervention must recognize the 

tremendous diversity that exists across and within States. Given this diversity, 

there is no ‘‘silver bullet’’ policy that will ‘‘solve’’ the higher education attainment 

problem. 

Second, improving higher educational attainment requires State policy leadership. 

Higher education institutions have a range of goals and objectives—not all of which 

give priority to—or are consistent with—a State’s goal of improving its overall higher education attainment and closing gaps in attainment across groups. State policy 

leadership is required to articulate statewide goals for improving a State’s higher 

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education attainment, and State policy leadership is required to steer institutions 

toward achieving these goals. 

Third, all States have policies in place that are somehow related to college preparation, participation, completion, and affordability. But, if States are to make meaningful progress in raising overall higher education attainment and closing gaps in 

attainment, they must have more than a collection of policies. To improve educational attainment for their populations, these policies must be oriented toward 

meeting three goals: 

(1) Ensuring that college is affordable, 

(2) Ensuring that students can move from K–12 schools into higher education institutions and can transfer among higher education institutions without loss of academic credit, and 

(3) Ensuring that high-quality higher education options are available to all State 

residents. 

To maximize the effectiveness of available resources, we must better understand 

how various public policies in these three categories come together to influence higher education attainment for individuals from different groups. For instance, college 

affordability is determined not just by the Federal Government’s investment in financial aid, but also by State appropriations to public institutions, the amounts and 

types of financial aid that State governments and higher education institutions 

make available to their students, and the tuition and fees charged by higher education institutions. Affordability is also a relative term, as what is affordable depends on an individual’s family income. 

A fourth conclusion from our study is that public policies must be oriented toward 

leveling the playing field for higher education attainment. Students from disadvantaged groups are disproportionately negatively impacted when public policies do not 

ensure that college is affordable, do not ensure that students can move seamlessly 

across education levels and sectors without loss of academic credit, and do not ensure the availability of high-quality higher education options. 

Finally, States must continually monitor the extent to which their collection of 

public policies is effectively promoting their State’s overall higher education attainment and closing gaps in attainment across groups, and make necessary adjustments in these policies. 

Based on this and other research (including a volume in The ANNALS of the 

American Academy of Political and Social Science that I co-edited with Michael 

McLendon from Southern Methodist University and that will be released in September), I recommend that the Higher Education Act be amended to include ‘‘Federal-State partnerships’’ for raising overall higher education attainment and reducing gaps in attainment across groups. Such partnerships would build on prior successful partnerships such as those stimulated by the Federal Morrill Land Grant 

Acts and the Leveraging Educational Assistance Partnership (LEAP) Program (formerly known as the State Student Incentive Grant (SSIG) program). Explicit Federal-State partnerships would recognize that a comprehensive approach with specified roles of multiple actors is required if we are to successfully raise overall rates 

of higher education attainment and close gaps in attainment across groups. 

One productive Federal-State partnership would focus on improving college affordability. This type of partnership would address one force that is driving up tuition 

and fees at public colleges and universities: the decline in State appropriations per 

student. Greater attention to State investment—through both appropriations and financial aid—is warranted, given the declining affordability of higher education and 

the many public benefits that result from higher education. This type of partnership 

could take the form of maintenance of effort provisions like those in the State Fiscal 

Stabilization Fund in the American Recovery and Reinvestment Act of 2009. An alternative approach would be to match State funding with Federal funding, along the 

lines of the State-Federal College Affordability Partnership proposed by American 

Association of State Colleges and Universities (AASCU) and included in Senator 

Harkin’s draft reauthorization bill. Three characteristics of the proposed partnership 

are particularly important. First, the proposed partnership specifies the roles and 

responsibilities of the Federal Government, State governments, and public colleges 

and universities in ensuring the availability of high-quality but affordable higher 

education. Second, it recognizes that affordability is influenced by both appropriations and tuition. Third, it sets as a clear goal the enrollment of students from lowincome families. 

A second type of Federal-State partnership would encourage the development of 

more effective and innovative approaches to addressing the complex, systemic issues 

that limit college opportunity, especially for students from low-income families, racial/ethnic minority groups, and other groups that are underrepresented in higher 

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education. This type of partnership could take the form of Senator Harkin’s proposed ‘‘State Competitive Grant Program for Reforms to Improve Higher Education 

Persistence and Completion.’’ Innovation is essential if we are to identify effective 

strategies for reducing the costs of delivering high-quality higher education, improving the transition of students from K–12 education into higher education (and reducing the need for developmental education), smoothing transfer among higher 

education institutions, improving degree completion rates, and better aligning the 

higher education options that are available within a State with the educational 

needs and other characteristics of a State’s population. 

In a third type of Federal-State partnership, the Federal Government would 

incentivize States to promote college-related knowledge among prospective college 

applicants. Students are more likely to stay enrolled and have better graduation 

rates when they have more complete information about the different kinds of colleges and universities from which they can choose, the differences in costs of these 

institutions, and their financial-aid options. More and more information is available 

about these issues. But, the challenge is greater than simply making information 

available. The information must be relevant, useable, and applicable to students 

with different information needs. One of the primary mechanisms for converting information into knowledge is the high school counselor. But, in too many schools 

across the Nation, there are too few counselors to adequately address college-related 

information needs. More must be done to ensure the availability of college-related 

counseling, including providing funding to staff these positions and encouraging the 

development of innovative approaches for delivering this counseling. 

The challenges to closing gaps in attainment across groups are many. But continued gaps in higher education attainment leave the United States and individual 

States at a competitive disadvantage, diminish the middle class, and contribute to 

growing economic and social inequality. The time for greater action is now. 

The CHAIRMAN. Thank you very much, Dr. Perna. 

Thank you all for excellent written statements, which I read last 

night, and for your spoken statements this morning. 

Now we’ll start a round of 5-minute questions. 

Dr. Perna, I’ll start with you. You talked in your testimony about 

the five States that you had done a comprehensive examination of. 

Through this examination, did you identify any best practices 

among States for boosting college completion rates among their students, particularly low-income students? 

I would add here that the president of Arizona State University, 

Michael Crow, I think here once made a statement that really 

caught me. He said that if you are a C student from a high-income 

family, you have an 80 percent chance of completing college. If you 

are an A student from a low-income family, your chances are only 

17 percent. 

So what are some of the best practices that we can do to close 

that gap? You mentioned the gaps. 

Ms. PERNA. Right. Thank you for that question. Our States vary 

tremendously, and all of the States that we looked at—we looked 

at Maryland, Georgia, Texas, Washington and Illinois—all States 

need to do more in order to improve the educational attainment to 

the levels required for economic competitiveness moving forward, 

and all have substantial gaps across groups. 

One area of promise we found was in Maryland. Maryland has 

developed a comprehensive approach to financing higher education 

that is really seeking to align the fiscal levers that are in place to 

address affordability. College affordability is still challenging in 

Maryland and in other States, but there are practices in place now 

to think about how those levers that we have—State appropriations, tuition, and financial aid—come together relative to family 

income to ensure that college is affordable. 

The CHAIRMAN. I’ll be back to that in the second round. 

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Ms. PERNA. OK. 

The CHAIRMAN. I wanted to ask Attorney General Madigan about 

what’s happening with students being ripped off by some of these 

scam artists that say that they’re going to take care of your debts 

and all that, you just give us some money, and then that’s the end 

of it. I do applaud the work that you’ve done, and what other attorneys general have done with respect to some of these instances, but 

it almost seems like we’re playing that old game of whack-a-mole 

where you do one thing here and it pops up someplace else. 

I just wonder how you might respond to the Federal Government, 

have we done enough to rein in some of these economic incentives 

and market failures that allow these abuses at these institutions. 

And second to that, talking about the investigation of Sallie Mae. 

Do you believe there are enough statutory protections in place to 

protect student loan borrowers? 

Ms. MADIGAN. Mr. Chairman, first and foremost, let me actually 

applaud what the committee has done in terms of investigating forprofits. You, like some of the State attorneys general and other regulators, are probably the most aware in this country of the problems that have been, unfortunately, pervasive at some of the forprofit institutions. The very aggressive recruiting, the poor accreditation, the high cost, the low job placement, and therefore a heavy 

amount of debt when these students can’t find a job in their field, 

or certainly a decent paying job to pay down that debt. 

So you, this committee has done a good job, but there is obviously much more that needs to be done at the Federal level to 

make sure that we aren’t sending billions of dollars to sub-standard, really predatory colleges. There’s much more to be done in that 

regard. 

I’m not going to talk to you specifically about our investigation 

with Sallie Mae, but I will say in general, from the complaints that 

we’ve received in the Attorney General’s Office, what we are seeing 

are problems that are very similar to what we saw when we were 

having problems with struggling homeowners making their mortgage payments. When they contacted their servicers, and when the 

students, former students are contacting the servicers, again 

they’re not being given their repayment options. 

If you have a Federal student loan, there are actually some very 

good repayment options available. But instead of being informed of 

what those are and walked through what would be the best for 

their financial circumstance, they’re instead being kind of pushed 

into just get up to date with their payments as opposed to get into 

a better payment plan. 

We’re also seeing some of the typical problems that we saw previously where you never talk to the same person. When you do 

hand in paperwork, it’s lost repeatedly. Problems with applying 

payments appropriately if there’s an overpayment, and a real lack 

of counseling that’s out there. 

Those are some of the problems that we’ve been seeing. 

The CHAIRMAN. I’ve had that experience. 

Ms. MADIGAN. Sorry. 

The CHAIRMAN. Yes, believe me. 

My time is up. 

Senator Alexander. 

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Senator ALEXANDER. Dr. Kaler, welcome. Someone once asked me 

what’s more difficult, being Governor, a member of the Cabinet, or 

president of a university, and I said obviously you’ve never been 

president of a university. 

[Laughter.] 

I welcome you. 

You mentioned in your testimony some deregulation. You mentioned one grant, one loan, one work, working on this FAFSA 

thing. Senators Mikulski and Bennet, Burr and I, with Chairman 

Harkin’s agreement, have set up a task force headed by Chancellor 

Zeppos of Vanderbilt and President Kirwan of the University of 

Maryland to try to address over-regulation of colleges and universities. Do you have any specific comments about that? And specifically, the finding that 42 percent of a principal investigator’s time 

on Federal research is spent on administrative matters. 

Mr. KALER. Thank you, Senator Alexander, and I appreciate your 

nuanced view of the various positions you’ve had in your career. I 

happen to agree with you. 

The regulation is just really quite remarkable. It’s probably more 

apparent, more flagrant in the research space. We have a variety 

of research reports that we have to send back to the Federal Government, and our Office of the Vice President for Research has 

done an analysis, and about half of the information that we send 

back to the Federal Government in one of those reports is information the Federal Government already has. There’s just this repetitive need to provide information that does not add value. 

I think the research community is deeply interested in accountability. We are interested in using our funds wisely. But the regulatory burden is just crushing elements of our scientific—— 

Senator ALEXANDER. The head of one of the academies visited 

with me this week, and a university president. I said, well, what 

would be a reasonable percentage of time? And they were reluctant 

to say that, but they said, well, 15 or 20 percent of a principal investigator’s time might be spent on administrative matters. Does 

that sound more or less right? 

Mr. KALER. Senator, in my experience as a long-time principal 

investigator, as a scientist, a 10 percent number I think is completely reasonable, and again recognize that in addition to the principal investigator’s time, these reporting activities require the hiring of additional staff whose principal job is to fill out forms for the 

Federal Government. There’s an added cost associated, as well as 

the researcher’s time. 

Senator ALEXANDER. We have, if I’m not mistaken, about $30 billion of Federal research dollars out. So if we were able to find a 

way to reduce from 42 percent to 10 or 15 percent the amount of 

administrative time for the principal investigator, that would be a 

lot of extra money for research, it would seem to me. 

Let me ask Ms. Lubbers, you’ve been a State senator, and now 

you’re a commissioner of education, so you’ve had a chance to look 

at the State of Indiana budget. I mentioned Peter Orszag and 

Thomas Kane of Brookings. Peter Orszag was President Obama’s 

budget director who talked about a key factor in explaining the declining trend in State appropriations for higher education is the 

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mated that if higher education’s share of State budgets had remained constant instead of being crowded out by rising Medicaid 

costs, it would be getting some $30 billion more than it receives 

today, or more than $2,000 per student. 

Lieutenant Governor Ravitch, a Democratic lieutenant Governor 

of New York, I read his comments where he talked about in an article in the New York Times during the Great Recession how the 

maintenance of effort requirements that require more spending on 

Medicaid had the effect of less spending on higher education, and 

therefore higher tuition. 

What has been Indiana’s experience with the relationship of Federal requirements on State Medicaid spending and funding for 

higher education? 

Ms. LUBBERS. Senator, you’re exactly right, and Indiana would 

be a poster child for this. We used to be about 12 percent of the 

budget, 12 to 13 percent would be for higher education. Obviously, 

a greater portion would go to K–12. For the first time in the last 

budget cycle, we saw Medicaid bump higher education at a higher 

percent, Medicaid higher than higher education. That was the first 

time that had happened. 

Clearly, that is the case. And I recall from my 17 years in the 

senate how difficult it is to balance very important and competing 

interests, and never more so than after the recession that we just 

faced as universities have struggled with their budgets and families have struggled with their budgets. But it is a very real phenomenon that entitlements have caused pressure on budgets at the 

State level, including the higher education budgets. 

In Indiana, the last budget session we looked at our appropriations and we made a convincing argument that our appropriation 

for FTE had been going down and we asked for more money for 

higher education, which we received, but we did it predicated on 

two very important factors. One, that we would fund our higher 

education institutions based on our performance metrics. We were 

going to pay for what we value. And we were also going to ask our 

institutions, if we were successful in getting more money, to hold 

tuition to no more than the rate of inflation. In fact, they did that, 

and some froze tuition. 

This is a very delicate balance with other State interests, and it’s 

a very delicate balance in terms of how we fund higher education. 

I think we’re making some progress, but it’s a complex issue. 

Senator ALEXANDER. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

I see Senator Franken, Senator Isakson, Senator Warren, and 

Senator Murphy, in that order. 

Senator Franken. 

Senator FRANKEN. Thank you, Mr. Chairman. 

Dr. Kaler, thank you for your testimony, your written testimony. 

We’ve attended a number of college affordability roundtables together. One of the things that we both heard is that very often students say they didn’t really understand going in what the cost was. 

Just before the hearing today we talked about net price calculators. 

I have a bipartisan piece of legislation to make those very prominent and have a standardized thing, and that’s in the process beHELPN-003 with DISTILLER

30 

fore you apply to college. When you can look online, you can see 

what it would cost with all the different financial aid possibilities 

that you can get. 

The College Board did a study and showed that a lot of students 

decided not to apply to schools that they could have gotten into, 

elite schools or better, because they didn’t understand what actually was there for them, what the actual net price was. 

Now, after you get into a school—and Senator Alexander, the 

Ranking Member, was talking about complicated forms—there is 

no uniform form coming back from these schools on award letters. 

There will be different award letters that use different terminology 

for the same thing. It will be an award letter that says you’re getting this Stafford subsidized loan, but it says SS–182 or something, 

and it’s under ‘‘Awards.’’ Most people don’t think of a loan as an 

award. 

I want to get your comment on what we can do to help transparency and simplicity in letting kids, letting students, letting parents, letting guidance counselors, letting everyone know what the 

cost of a college is before you apply, and then once you’re accepted 

at different schools be able to have a uniform comparison. 

Mr. KALER. Senator Franken, Senator Harkin, I couldn’t agree 

with you more. I think the net price calculator is an important first 

step, but it is just a first step. I mentioned to you before the testimony that you can hardly avoid the net price calculator on our 

website. It is there, and it’s heavily used, and it’s critically important for families, particularly first-generation college families, to be 

able to see what it is really going to cost and to avoid, as you mentioned, under-placement, a student accepting a lower-quality institution when in fact they could be quite competitive and they could 

economically afford to go to what I would call a better school. 

That’s important. 

I think we as an industry need to do a better job of advising our 

students clearly where they are in their financial aid trajectory and 

tying that conversation very directly to academic progress. 

I was delighted to hear about the 15-credit banding. We’ve moved 

our tuition structure to enable that to occur at Minnesota as well. 

Students need to be on-time and graduate in 4 years, if at all possible. 

If you look at the history of how debt has accumulated, a student 

may be doing some of this in years 2, 3, 4; but 5 and, heaven forbid, 6 are where you take a larger chunk because you’ve used all 

your other resources. So timeliness, clarity, and appropriate placement I think are three very important points, and I agree with you 

on them. 

Senator FRANKEN. And another thing you wrote about in your 

testimony is what you’ve been doing at the U., and I think all of 

you will recognize this as part of this problem of 6-year graduations 

or students not graduating, and that’s when you have debt and no 

degree. But what you’ve been doing to get non-traditional students, 

students who are poor, students of color, get them through school, 

you have the President’s Emerging Scholars Program and another 

program you talked about in your written testimony, Retaining All 

Our Students. Can you talk a little bit about that? 

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31 

Mr. KALER. Thank you, Senator Franken, Chairman Harkin. Indeed, what goes on in the classroom is a pretty important part of 

a student’s experience, but what goes on outside is at least as important. We are really focusing on getting students to graduate, 

and it’s pretty clear that if you don’t come back for your second 

year, you’re probably not going to graduate in four. 

The President’s Emerging Scholars Program is an enhanced program around advising, around integrating first-generation students, students of color, students who are challenged economically 

into the full breadth of the university so they become part of the 

community and have a connection that brings a student back. 

In addition to the academic progress, a connectivity with a club 

or a sport or an activity is really important for enhancing that. 

Right now, our first- and second-year retention rate for all of our 

students is 91 percent, and for students of color it’s 90.5 percent. 

So it is working to enable those students to connect and come back. We spend about $30 million a year in the University Promise 

Scholarship Program, which is directed to provide financial aid, 

particularly for families with zero expected family contribution, and 

it’s working to improve the success of those students. 

Senator FRANKEN. I’m out of time, my time. I’d like to thank all 

the witnesses. I’ll probably submit some written questions. 

Just to the Ranking Member’s point about college presidents, I 

once heard a saying that a college president is someone who lives 

in a mansion and begs for money. 

[Laughter.] 

We just beg for money. 

[Laughter.] 

STATEMENT OF SENATOR ISAKSON

Senator ISAKSON. Mr. Chairman, thank you very much, and 

thanks to the witnesses for their good testimony and their great 

work. 

I’m going to deviate from what I’m supposed to do in terms of 

asking questions and instead try and address the Chair’s question, 

which all of you have really referred to, and that is the likelihood 

of lower income families actually being able to get a college degree. 

In the United States today, if a young person goes to a university 

or a college when their family has a household income in the top 

quartile of America, they are 10 times more likely to graduate with 

a college degree than a student from a family in the lowest quartile, and there’s an example in Georgia that I just want to use to 

submit for the record, if I can, Mr. Chairman. 

Georgia State University is a large urban university in downtown Atlanta with 32,000 full-time students. In the last 10 years, 

they’ve gone from some of the poorest performing graduation rates 

among Latinos and African Americans to where today they grant 

more Bachelor’s degrees to African Americans than any university 

or college, not-for-profit, in the United States of America. Latino 

students have gone in 10 years from a graduation rate of 22 percent to one of 66 percent. African Americans have gone from 29 

percent to 57 percent, and African American males, which was one 

of the biggest problems we experienced, has gone from 18 percent 

to 59 percent. 

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32 

They did it with a program they call the GPS Advisor’s System 

and Panther Grants. The GPS Advisor System is a system where 

when a student enrolls, they’re given a password into the GPS Advisor System, which has 10 years of collective data, 2.5 million 

grades and programs, and the likelihood predictability of students’ 

ability based on their qualification to perform and achieve in each 

one of the courses that they are registered for, so they can actually 

do some comparative analysis of what they’re trying to do using the 

computer. All the students have access to it, but it’s most helpful 

to those students who are most at risk not to graduate. And what 

has happened has been pretty remarkable. 

The access to the GPS system has generated 34,000 individual 

meetings in 1 year and saved students an average of 3 credit hours 

and $4 million in savings for additional time they have to stay at 

the university in order to graduate. 

The second thing they’ve done is they’ve raised an endowment to 

create something called Panther Grants. One of the biggest difficulties for low-income students is they run just short of having enough 

money to register for a semester. So they don’t register, they drop 

out and they get a part-time job, and they never come back. Georgia State raised the money to create a program called Panther 

Grants where you can qualify for grants in the $300 to $1,000 

range to be just that little bit of money that can take you from your 

loans, from your family income and from your grants and give you 

enough money to stay in school. 

The results of that have been that 70 percent of seniors who received funding graduated within two semesters of receiving the 

grant. These are the students who almost make it and drop out because at the last minute they’re a little bit short of income. 

I’d like to submit for the record the details of these programs because I think Georgia State University has done a remarkable job 

doing that. Their student population, by the way, that 32,000 students, is 61 percent non-white. They are a majority minority university that has done a great job of addressing the disparity in 

terms of income and giving their students access to a quality education, and I’m very proud to brag about them. And thank you for 

your testimony and your work. 

The CHAIRMAN. Without objection, we’ll put that in the record. 

[The information referred to may be found in additional material.] 

The CHAIRMAN. But I want to visit with you more about this. I 

want to learn more about what they did and how they did that. 

That’s fascinating. 

Senator Warren. 

STATEMENT OF SENATOR WARREN

Senator WARREN. Thank you, Mr. Chairman. 

And thank you all for being here today. 

Last month, Senator Durbin, Senator Harkin, Senator Franken 

and many others introduced a student loan refinancing bill to lower 

the interest rates on outstanding student loans. Even though every 

Democrat, every Independent, and three Republicans supported 

moving this bill forward, a majority of Republicans filibustered it 

and blocked the bill. 

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33 

I’m disappointed about what happened because student loan refinancing should not be a partisan issue. North Dakota, for example, 

recently began its own student loan refinancing program with 

strong bipartisan support. People in North Dakota can now lower 

the interest rate on their Federal loans by refinancing into a State 

loan. So far, the program has been pretty popular. The State has 

refinanced more than $40 million in student loans just since April. 

There’s a downside, though, and that is borrowers who refinance 

have to give up the benefits of Federal student loans, like incomebased repayment plans, loan forgiveness, and certain consumer 

protections. A Federal student loan refinancing program would let 

borrowers get lower interest rates without losing out on any of the 

Federal protections that they’re currently guaranteed. 

Let me start by asking you, Attorney General Madigan, how 

would a Federal refinancing program affect people with student 

loans in Illinois? 

Ms. MADIGAN. Senator Warren, obviously I believe, like you do 

and many others, that allowing student lenders to refinance makes 

an enormous difference. Any attempt and any ability we have to 

reduce the overall amount of debt that they have is going to allow 

them to more quickly pay off their debt and therefore more quickly 

fully participate in our overall economy, because what we’re seeing 

with the students who are struggling is that many of them are living in their parents’ homes. They can’t even qualify sometimes, because their credit is a mess, to rent an apartment. They’re unable 

to make small purchases of furniture or make major purchases of 

a car, certainly of a home, and they can’t save for retirement. They 

can’t even startup a small business. 

So we are very concerned about having millions of people in this 

upcoming generation perpetually stuck and not able not only to fulfill their own life and dreams but also be a significant drag to our 

economy. Refinancing seems to be not only a good option but a fair 

one that we have in the past put people who are struggling to 

make their mortgage payments front and center. 

Senator WARREN. Good. Thank you very much, Attorney General. 

North Dakota’s refinancing plan had overwhelming support from 

both Democrats and Republicans in the State legislature. It was 

signed into law by a Republican Governor. I believe it’s time to cut 

the interest rate on student loans, and I think this should be something that we should be able to support, both Democrats and Republicans. 

I want to ask another question, and that is the role the States 

can play to keep students from wasting their money at poor performing for-profit colleges like Corinthian College. Corinthian is a 

national for-profit college chain that has sucked down about $1.4 

billion a year in Federal financial aid. It is now facing allegations 

that it falsified job placement data, altered grades, and fabricated 

attendance data. About 1 in 5 of its students are in default on their 

loans within 3 years. 

The Federal Government finally took action against Corinthian 

and as a result it will either shut down or sell off campuses over 

the next several months, and I think this is an important step in 

holding a for-profit college accountable if they’re taking Federal 

loan money. So I support this. 

HELPN-003 with DISTILLER

34 

But even as Corinthian shuts down, the majority of its students 

have already taken on significant student loan debt. Some will get 

their money back, but many will have to finish out their programs 

either at Corinthian or at another institution. Students at campuses that are listed for sale are going to have to wait to see 

whether Corinthian can find a buyer and then decide whether to 

stay enrolled at the new institution or try their luck at transferring 

somewhere else. Despite all this, Corinthian continues to enroll 

new students. 

State Attorneys General are playing a significant role in investigating for-profit colleges. Corinthian is currently under investigation in more than a dozen States. But I’d like to know whether the 

States are doing everything they can to ensure that Corinthian College students are being protected. 

I want to start here with Dr. Lubbers. Has your office assessed 

whether students at the local Corinthian campus will be able to 

transfer to their local community colleges, and are you helping 

them research this option? 

Ms. LUBBERS. Thank you. We do have some students at Everest 

College in North Indiana who would be coming under this new 

problem that’s been created. It’s a teach-out for those students 

there. But this goes far beyond I think just this particular situation, as egregious as that might be, and that is to really look at 

how Hoosier students understand these issues related to transparency and value. 

I suppose if there’s an area in which the Federal Government 

and the States could be more engaged, it is an area like this where 

you have students who could live in one State and are going to 

school in another State. We have all the online programs that are 

offered as well. So I think we really need to work together on this. 

We do oversee the Board for Proprietary Education in Indiana, 

so we are taking a really good look at this. We have a return on 

investment report. For the first time we’re really gathering data for 

not just our public institutions but our private and our proprietary 

schools, too. We’ll be gathering information on graduation rates. 

This is especially true for our financial aid students where we have 

new State authority to get additional information about our proprietary schools. 

We’re very committed to making sure that students get value 

from their dollar, and that includes getting a degree and having an 

opportunity so they will find another placement in Indiana, and 

we’re working with them to do that. 

Senator WARREN. Thank you very much. 

I’m out of time, so I may have more questions for the record on 

this, Mr. Chairman. But I do want to say, this problem did not 

occur overnight. We can push the Federal Government on its role 

in overseeing these for-profit colleges, but I very much encourage 

the States to step up their oversight as well. 

Thank you very much. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator. 

Senator Murphy. 

STATEMENT OF SENATOR MURPHY

Senator MURPHY. Thank you very much, Mr. Chairman. 

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35 

I want to stay on this exact topic because I’m as passionate as 

Senator Warren is about this issue. While I share all of her concerns about Corinthian College, let me just broaden out the problem because the statistics are fairly stunning on a national basis 

when we look at for-profit schools, understanding that there are a 

lot of good for-profit schools out there, but there must be a lot of 

pretty poor performing for-profit schools if for-profits in this country educate about 13 percent of students but comprise 47 percent 

of loan defaults. That is a stunning statistic, 13 percent of students, 47 percent of loan defaults. 

Many of these schools take in about 90 percent of their revenue 

in Federal Government aid, and the industry writ large turns a 

profit of about 19.7 percent every year, taking in about $3.32 billion in total profit, largely off of federally funded grants. So I’m 

thrilled that the Administration has taken on Corinthian College, 

but it’s much bigger than that. 

Let me pose the question to you, Attorney General Madigan. 

You’ve talked about in your testimony the need for the Federal 

Government to start setting some real standards. I mean, we are 

the 3,000-pound gorilla here. We have $140 billion that we are 

spending with virtually no strings attached to it when it comes to 

quality. We have one standard that says if you have default rates 

of more than 30 percent, we’ll start to look at perhaps restricting 

the money. 

What are the things that Attorneys General can do here? But 

what are also the limits of your authority, and what would you recommend to the Federal Government when it comes to accountability? 

Ms. MADIGAN. Let me liken this to the situation where you had 

State Attorneys General during the beginning of the mortgage crisis looking at the large subprime lenders. We were constantly doing 

our investigations, bringing our lawsuits, even settling our lawsuits, but we were still unable to really stop the problem because 

we kept getting push-back from the institutions, similar to as we 

are now with the for-profits saying, well, if there was a problem, 

the Federal Government would do something, they’d stop our payments. 

You have, as you’re aware, on a bipartisan basis, Attorneys General across the country that are involved in investigations, that are 

involved in lawsuits, that are trying to either change these practices or stop students from enrolling in these schools by making 

them more aware. So certainly Federal oversight, whether it is 

through the rulemaking process, the 90/10 Rule, the Gainful Employment Rule, as you mentioned, the Cohort Default Rate, you 

have to be not just looking at those things but truly putting teeth 

into them and enforcing them. You can’t keep on giving money out 

to these predatory subprime colleges. It is a waste of taxpayer dollars and, worse than that, you are ruining people’s lives by allowing it to happen. 

There is much more that can be done at the Federal level. I 

think the States and even some of the Federal regulators are doing 

a lot of work, but we really need the support at the Federal level. 

Senator MURPHY. Dr. Kaler, you were nodding your head, so I 

want to ask you to comment on this but pose this specific question. 

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When you’re talking about accountability, we need to be able to assess how schools are performing, and that involves understanding 

how students do after they graduate. Do they make enough money 

in order to pay back their student loans? 

We have a fairly blunt instrument right now, which is just figuring out which students have defaulted on their loans. But because we have a Federal ban on something called a unitary student 

record, the ability to take the data that exists in the Federal Government today and just figure out how they did after they graduated and whether the schools’ claims about what they were going 

to deliver actually matched up to reality, we’re unable to really 

give a metric to students, never mind the Federal Government, 

that allows them to choose. 

My understanding has been that one of the barriers to enacting 

a unitary student record has been the resistance of colleges and 

universities, for-profit and non-profit, all across the country. So I’d 

like your general comment on this, but how can you help us get the 

information necessary to hold these schools accountable and give 

students information as they’re applying that is relevant to the decisions that they make? 

Mr. KALER. Senator Murphy, thank you for that question. I’m 

tempted to give you an academic answer which I suspect you will 

find unsatisfactory, so I’ll avoid that. 

It is a nuanced situation, and you are looking at the outcomes 

that an individual makes after graduation as to the trajectory of 

their life, and there is a lot that goes into that beyond just the education that they obtained at a particular institution. In some sense 

those outcomes are out of the control of the place from which they 

graduated. 

What is in control and which I do believe you should look very 

carefully at is what happens in that institution, what are the 4- 

and 5- and 6-year graduation rates, what are the trajectories of not 

just full-time first-time students, as somebody mentioned in our 

comments, but all students. If you transfer, if you come to Minnesota for 2 years and transfer to Iowa and graduate from Iowa in 

2 more years, that’s a success for everybody, and we don’t count 

that appropriately. 

What are the student default rates? What are job placement 

rates? These are elements that are more directly related to the performance of the institution and which I would be comfortable being 

judged on. The lifetime outcomes are more difficult and involve, as 

I mentioned before, many other inputs that are out of our control. 

Senator MURPHY. I understand it’s imperfect, and it speaks to 

the fact that you would have to have subtlety and nuance to the 

way in which you enforce the law. But the fact is that there are 

for-profit colleges out there that are bringing in droves of students 

for degrees in video game design, which is a wonderful thing to 

study for 4 years, but there are no jobs in that field commensurate 

to the number of students who are going to for-profit schools to 

study it, and right now we don’t have the appropriate tools to determine whether those marketing claims about the job market are 

actually based in reality. 

Thank you, Mr. Chairman. I’m over time. 

The CHAIRMAN. Thank you, Senator Murphy. 

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Dr. Kaler, I’m a graduate of Iowa State University, a land-grant 

college in Iowa, and I just thought it was a very nice touch that 

you wore the university’s colors on your tie today. I thought that 

was a nice touch. 

Mr. KALER. The coincidences in life are sometimes overwhelming, 

Senator. 

[Laughter.] 

The CHAIRMAN. I couldn’t resist. 

Mr. KALER. But I’m glad you appreciate it. 

The CHAIRMAN. I couldn’t resist. 

Dr. Kaler, you talked about the collection of Byzantine forms, applications, websites, et cetera, and you talked about going to a oneform, one-application type of thing. I know my friend, Senator Alexander, has talked about that, too. But here’s a concern I have. 

If you do that, what do you do about Perkins loans? What do you 

do about SEOG? What do you do about subsidized loans? Do we 

just get rid of all those? 

Mr. KALER. Senator, I think this is a very important conversation 

to have, and the details, which are important ones, and you just 

named three of them, I think need to be sorted out. But the current 

situation is almost a Rube Goldberg kind of machine. It’s complicated to operate and it’s non-transparent. 

The CHAIRMAN. I agree with that. Every time Senator Alexander 

holds that up, I shake my head. It is Byzantine. But still, how do 

we work and make sure that we continue to have programs which 

I think have proven effective? I don’t know. I could hear a counterargument. But Perkins loans are an extension of the kinds of loans 

I took out, which when I went to school were called National Defense Education Act loans. Of course, SEOG, which I think is very 

important to a lot of colleges and a lot of our students, and the subsidized loans. I don’t know how you work that in. 

Mr. KALER. Let me give you another example that my folks have 

provided me. We have the Teacher Education Assistance for College in Higher Education, or TEACH, loans. Those have to be repaid with the loan plus interest. Many of these loan programs have 

different expected family contributions, different lifetimes, different 

interest rates. I don’t have the solution for you today, but I would 

strongly encourage in this process to run a comb through this, 

make it user friendly, make sure that the families who need the 

help get the help, and that that help goes to institutions that deliver on their mission. 

The CHAIRMAN. Thank you. 

Attorney General Madigan, as you know and as you noted, we 

had a long series of investigations and hearings on the for-profit 

college sector, which we published. I was challenged at one time 

saying that we were just being selective and that there are a lot 

of mistakes. At the time we put out the report, I challenged the forprofit school industry. I said if you find any mistakes in our report, 

just any mistakes, please let me know. I have yet to hear one. So 

I think our team, our investigative team, did a good job. 

I want to followup on that, and you had some discussions here 

with Senator Warren about that, and Senator Murphy. I have serious concerns that students are not being properly protected from 

a failing for-profit education model that rewards executives with 

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high pay, rewards their shareholders, but leaves students holding 

the bag when the music stops. In this regard, you have concerns 

about the ability of these cash-strapped for-profit colleges to compensate their victims if they’re forced to pay for their illegal practices. 

In other words, it may not be coincidence. There are others out 

there, too. What happens when they start to go under? The students have paid their money, which they borrowed from the Federal Government, by the way. The taxpayers have put that money 

in, and yet they don’t have a degree. These people have engaged 

in deceptive practices under State laws. How are they going to be 

compensated? 

Ms. MADIGAN. Mr. Chairman, that is the right concern to have, 

and it’s one that we share. So to the extent that these institutions 

don’t have the capital to repay these people to make them whole, 

then the Federal Government has to look at what, if anything, will 

you do in terms of discharging all or part of their loans, because 

I’m not sure what other relief is available to them at that point if 

there is no money to be had from these institutions. 

The CHAIRMAN. So these schools have taken taxpayer money, 

they have enriched their executives and their shareholders. They 

go under. The students have the debt. The students still have to 

pay the money. The students have to pay it back, but they didn’t 

get their degree. They didn’t get anything out of it. So will the Federal Government then have to come in again and pay, and pay for 

these students? 

Ms. MADIGAN. That is a possibility and one that, unfortunately, 

I think you are going to have to look at, particularly if one of these 

schools completely goes under. 

In the instance of Corinthian, if there is not a buyer, then what 

do you do in these circumstances? Certainly, as you know, if an institution does go out of business, then those loans are allowed to 

be discharged. So that is a possibility, unfortunately. The taxpayers 

get hit twice. 

The CHAIRMAN. They get hit twice, and the students get hit because they’re the ones that are burdened with the debt. 

Thank you very much, and thank you for your leadership in this 

area, Attorney General Madigan. 

Ms. MADIGAN. Thank you. 

The CHAIRMAN. Senator Alexander. 

Senator ALEXANDER. Attorney General Madigan, on loan repayments, with the President’s new executive order I believe there 

may be nine different ways under the Federal law a student can 

repay a student loan. Senator Bennet and I have suggested that we 

change that to two. One would be a standard 10-year repayment, 

and one would be a 20-year repayment based on a student’s income. 

Based on your experience, would that eliminate confusion? And 

if you eliminated confusion, would that help? 

Ms. MADIGAN. Senator, I certainly think that we have seen from 

the complaints coming in to the Illinois Office of Attorney General 

a great deal of confusion. There’s not awareness of the opportunities that are even available. To the extent that there is an ability 

to streamline the process, make it transparent and make it easy, 

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yes, that would be a good thing, and it also eliminates the opportunity for these scam artists to prey on people who have to pay 

back their debt by telling them they can get them through the 

process and they can reduce your debt. I think anything that Congress can do to make the loan repayment process simpler is a good 

idea. 

Senator ALEXANDER. Mr. Kaler, or any of you, several school directors in Tennessee have told me that if we were able to replace 

this FAFSA with something that came close to two questions or a 

few more that the effect would be that a lot more students would 

take advantage of the Pell grants and the loans that are available 

to them, and that would help with our effort to get more people 

into higher education and to graduate. Do you have any sense of 

whether that’s likely to be true? 

Mr. KALER. Senator Alexander, my sense, and it is only that, not 

backed by data, is that not only would that be true that we would 

get more students, but I think it would also address the placement 

issues that Senator Franken mentioned earlier, about students 

under-achieving in their educational objectives and the schools that 

they would consider. 

Senator ALEXANDER. And would it help if a student, a traditional 

student, could find this information out in the junior year of high 

school rather than in the second semester of the senior year? 

Would that help? 

Mr. KALER. Yes, sir. We have a very vigorous program at Minnesota to get information into high schools beginning the freshman 

year and start to acculturate families to the University of Minnesota as a potential destination. You simply cannot wait until the 

second semester of the senior year. 

Senator ALEXANDER. I have one other question. I’d be interested 

in a response from any of the panelists. In dealing with student 

loans, we have a provision that really limits the ability of an institution to counsel students who are borrowing money. That seems 

nonsensical. And there have been several suggestions that the institutions themselves, both for-profit and non-profit, become more 

involved in the loan process. 

There have also been suggestions of risk sharing; in other words, 

that at least for some part of a loan, the institution itself would be 

responsible for some or all of the default. Any of you have any comment on that or any practical way of how to go about doing it? 

Ms. MADIGAN. I would very quickly say it’s the ‘‘skin in the 

game’’ concept, similar to what we were looking at when we were 

forming the mortgage practices. So that makes some sense. It 

should hopefully prevent institutions from purposefully having 

their students take out enormous loans that they will never have 

to contend with the default. I think that’s something that should 

be looked at. 

Ms. LUBBERS. I would offer that many of the schools are, in fact, 

stepping up, and I mentioned in my testimony that Indiana University, in the course of 9 months, reduced borrowing by 11 percent 

with their students by showing them what they owed and what 

they were going to owe going forward. There’s a lot that can be 

done already in terms of what colleges and universities are doing. 

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40 

I have to use this as an opportunity to talk about the fact that 

all we’ve talked about today is really very, very important, but 

equally important is making sure that we get these students to 

graduate because then they have an opportunity to use their degree when they leave in a way that will benefit them. I think having smart consumers when they’re there, making sure that they 

understand the value of going to college and graduating, is really 

the key to financial viability for families. 

Mr. KALER. I would just add that this limitation on counseling 

and advice is critical. We graduated last year 7,420 undergraduates 

from the University of Minnesota, and exactly eight of them had 

undergraduate debt of more than $100,000. I don’t know how that 

can happen, and it turns out I can’t actually find out, and I think 

that’s a shame. 

Senator ALEXANDER. I think many Senators really aren’t aware 

that the law limits the ability of institutions to counsel students 

about over-borrowing, which is something we should change. 

The CHAIRMAN. Senator Murray. 

STATEMENT OF SENATOR MURRAY

Senator MURRAY. Thank you very much to Chairman Harkin and 

to Ranking Member Alexander. 

I think this is really an important hearing because, as we all 

know, for a lot of Americans, earning a college degree really is a 

ticket to the middle class, and we also know that a highly educated 

workforce is really good for our economy by building the middle 

class and strengthening the workforce we need for the jobs that are 

coming to our country. And because of those benefits, States 

around the country traditionally have played a very fundamental 

role in financing higher education to help make it more affordable. 

But when that economic downturn hit in 2007 and 2008, a lot of 

States made some very drastic cuts to investments in higher education, and we know now today they spend 23 percent less per student than before the recession, on average. In fact, in my home 

State, spending is down nearly 28 percent less per student. 

When States cut back funding for higher education, schools increase tuition, and that cost is obviously passed on to students who 

are working to advance their own education. And because of those 

rising tuition costs, of course, students take out more loans. Today, 

the average college graduate has to pay back about $30,000 in student loans, and we all know that debt can have a very lasting consequence for borrowers and for our economy. 

Mr. Chairman, I was really proud to co-sponsor the bill from 

Senator Warren to allow borrowers to refinance their student loans 

to today’s lower interest rates to help ease that debt. But I am also 

very concerned that besides that crushing burden, there are a lot 

of complaints today about student loan servicers mistreating borrowers and failing to process payments correctly. I know, Mr. 

Chairman, you asked about that, but that is a concern that I have. 

With that, let me just ask a few questions of the panel. 

Dr. Kaler, you actually come from a similar State to mine when 

it comes to State support for student aid. Both Minnesota and 

Washington have some generous State need grants and their own 

State work study programs. In your testimony I noticed that you 

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41 

testified that your institution would support a one loan, one grant, 

one work proposal, and I wanted to ask you how that proposal 

would then interact with Federal, State, and institutional student 

aid funds. 

Mr. KALER. Thank you, Senator Murray, for the chance to amplify my comments on that. Again, we view this one bill activity as 

a good step forward. There are a lot of details that have to be 

worked out. We want to ensure that we, in the course of this, do 

not take resources away from students who need them, obviously. 

But it is an opportunity—we talked about the Perkins loans a 

minute ago—to reassess where we are in those. Those are available, for example, to students at for-profit colleges, but they’re not 

available to students at community colleges, and that strikes me as 

not right. 

I think if we were able to build a Federal system, then States 

could interface to that electronically—a shim, if you would—so that 

the Minnesota State Grant Program or the one in Washington 

could be seen in a holistic way by a student and their family as 

they evaluated the cost of going to various institutions. I think 

standing up websites is sometimes more complicated than you 

might want it to be, but having that data available to a family 

would be enormously useful. 

Senator MURRAY. Under that, would you support elimination of 

some of the campus-based programs that support, for example, lowincome students, like the Supplemental Opportunity Education 

Grants, or the elimination of the Iraq and Afghanistan Service 

Grants? 

Mr. KALER. The short answer is I want a system that provides 

the amount of aid that students need in a more seamless way, and 

we have a lot of programs. Let me take the Iraq and Afghanistan 

one. I will share with you, for the first 14 years of my life, my father was a sergeant in the Air Force, so I understand what dependent families have to do. But in that program, we have two programs in the State of Minnesota that support the spouses or dependents of Iraq and Afghanistan vets. There are programs in the 

Veterans Administration, and when I queried our folks about the 

number of students who took advantage of the Iraq and Afghanistan program that you just mentioned, we don’t think we have any 

because they’re using these other sources. 

This is an area in which I think we should look carefully. Obviously, we want to align resources in support of those families. But 

what’s the best and most efficient way between the Federal Government and the State to get that done? I think in Minnesota, we 

don’t have the optimum way to provide that support. 

Senator MURRAY. OK. I know my time is up, but if I could just 

ask one other question, I just wanted to broadly ask because as 

Chair of the Budget Committee, I know we live in pretty tight fiscal environments, and a lot of States are moving toward performance metrics for institutions of higher education. 

What have you learned about performance metrics at the State 

level just generally? Anybody can respond to that. 

Ms. LUBBERS. We have been doing performance funding for institutions for about a decade. We’ve learned that it’s important to 

have the student at the center, so as to have your rewards built 

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around the student. It’s important to have them differentiated 

based on the mission of the institution. So different kinds of institutions can be allocated money through the metrics in different 

ways. It’s important to pay for what you value, and in Indiana, like 

probably your State, Senator, we value more degrees, more students graduating on time, more at-risk students graduating, more 

high-impact degrees. So the metrics themselves are very important, 

and then the way that you look at those over a period of time. The 

period of time in which you recognize the metrics matters, too. 

We think that funding of higher education is always complicated. 

But if you say you’re going to pay for what you value, then you 

need to pay for what you value in good times and bad. You need 

to continue to do performance funding even if you don’t have new 

dollars. 

Senator MURRAY. Do those change—do metrics change institutional behavior? And, maybe even more importantly, is there a 

threshold level of funding required to change institutional behavior? 

Dr. Perna. 

Ms. PERNA. Thank you, Senator. The research on this is pretty 

limited, and it suggests that, at least looking at the older, the first 

generation of performance funding, that there have not been substantial changes in institutional behavior associated with performance funding. There are some new approaches that are being implemented now in some States, so we’ll see. But it’s mixed. 

Senator MURRAY. OK. All right. Thank you. 

Thank you very much, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator Murray. 

Dr. Kaler, I just want to make it clear, as a followup to my question earlier, in terms of simplification, you are not advocating that 

we do away with Perkins loans or SEOG or subsidized Stafford 

loans. 

Mr. KALER. Senator, I would advocate for a simplification approach. If the purpose is that those programs serve now can be met 

in a more efficient way, I would be interested in seeing that happen. If that meant instead that we would abandon students who receive important aid under those programs, then I would not do 

that. I think there is a way to provide this kind of aid in a more 

simplified way. 

The CHAIRMAN. If you have some suggestions on it, I would be 

more than happy to receive that information from you later on. Tell 

us how you think these could be simplified yet continue the important role that they play, I think, in higher education. 

Mr. KALER. We do have some ideas on that that we’ll share with 

your office. 

The CHAIRMAN. Yes, please do so, please do so. 

I wanted to ask Dr. Perna just one last question on this. On Federal-State partnerships here, I know that my friend, Senator Alexander, has talked about the Medicaid problems. I don’t think we 

need to debate that here. We’ve debated that a lot in the past, I 

think. But what I want to know from you is, tell me again in your 

own words and the research that you’ve done, why a State-Federal 

partnership is needed for college affordability in the context of 

State disinvestment. 

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I don’t want to get into this whole Medicaid thing, but the fact 

is—and we’ve had the data to show, that States have been 

disinvesting. Dr. Kaler talked about what happened in Minnesota. 

In the past, if a student brought a dollar, the State brought two 

dollars. Today, if a student brings a dollar, the State brings 50 

cents. 

Mr. KALER. Yes, sir. 

The CHAIRMAN. The State has been disinvesting. So why is it so 

important for the Federal Government and the State government 

to partner in college affordability? 

Ms. PERNA. Thank you, Senator. College affordability we know is 

one of the primary forces that limits attainment for students. Certainly other things matter, including academic readiness and 

things like that, but we have to address the college affordability 

problem. 

We have competing uses for resources. What we saw in our 

States is that we really need more strategic use of the resources 

that we have available, and I think that really means bringing into 

alignment the different types of levers that we have at our disposal 

to try to achieve the purposes that we’re trying to achieve. 

I think the first step is determining do we care about reducing 

the cost of going to college for students, so do we care about addressing the college affordability issue. If we have consensus that 

that’s a shared goal, then figuring out how we can incentivize all 

the different stakeholders to use the resources that we have available. In our work, we have shied away from saying if you just implement this one very particular type of policy you’ll solve the problem, because there’s variation across States in the orientation of 

their systems, their governance, structures for higher education, 

other contextual forces. 

But thinking about how to incentivize States to allocate resources, appropriations to institutions to help reduce the cost of 

higher education, figuring out how to allocate financial aid to improving access for students from the lowest income families, and 

thinking about tuition policies. In three of our five States, there 

has been a movement toward tuition deregulation, so giving more 

and more power to institutions to set tuition, and institutions have 

priorities that are not necessarily aligned with the statewide goals 

for higher education. 

We tend to think about policy in isolation, but thinking about 

how policies come together to really achieve what we’re trying to 

achieve here I think is key. 

The CHAIRMAN. Thank you. 

Ms. Lubbers, I wanted to cover one thing with you and what I 

think you’re doing really great in Indiana. You say in your testimony you’re telling students how much debt they’ve accumulated 

and what their monthly payment would be, that that tends to 

maybe get them to understand their financial obligations and 

maybe not even borrow so much. 

We have had testimony before from other panels on some colleges that when a student enrolls and is accepted to that college, 

they have to go through a—what am I trying to think of? 

Ms. LUBBERS. Financial literacy course of some kind? 

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The CHAIRMAN. That kind of thing when they first go, and telling 

them what they ought to be thinking about in terms of financial 

literacy and how much it’s going to cost to go to school and that 

kind of thing. Not all schools do that. I assume you’re doing that 

in Indiana. I don’t know if you’re doing that in Indiana. You’re 

doing it, it sounds to me, after they’re in school, but do you do it 

when they first enroll? 

Ms. LUBBERS. We do it at most institutions when they first enroll. We are a coordinating board, so this would be done at the institutional level, not at the State level. But they’re doing it because 

it pays for them to do it. Keeping their students there is in their 

best interest, and it’s what they want to do. So if financial stress 

is one of the reasons why students don’t persist, then making sure 

that they understand that before they begin is important. 

We’ve talked a lot about the cost calculator, for example. We 

have a comparative cost calculator in Indiana which goes far beyond the Federal requirements in terms of providing information to 

students. They would be using that in high school, not when they 

get to college, and it provides a lot of information to them about 

borrowing and the cost of college. 

The CHAIRMAN. I wish more high schools would do that. But the 

fact is we have a lot of kids—and these are kids with good grades 

who are eligible to go to college. They haven’t the slightest idea of 

how to balance a checkbook, let alone figure out what their debt 

payment is. 

Do you do that in Minnesota when students first come in? 

Mr. KALER. Yes, sir, Senator Harkin. We have a terrific program, 

actually, very robust, and the tag line is ‘‘Learn to live like a student now so you don’t have to later.’’ 

The CHAIRMAN. That’s not bad. I like that. 

Any other views on that? I’m out of time, but I just wonder about 

getting students up front, when they first go to school, to get them 

to understand what debts mean to them. 

Yes, Dr. Perna. 

Ms. PERNA. Just very quickly, Senator, I think it’s important to 

recognize that one of the strengths of the U.S. higher education 

system is also one of the challenges. We have so many choices, so 

many different opportunities here, and we don’t specifically track 

people to those different choices early on like they do in other nations. 

We also have so many different options and mechanisms available to finance higher education. I think we need to be embracing 

the choice that we have and recognizing the challenges that it does 

create. With all of that complexity, we have to figure out a way to 

make sure that people can make informed choices. We’ve done, I 

think, a good job of putting information out there, but it’s not 

enough just to put information out there. Often it’s not understandable, it’s not accessible to folks, especially for those who are the 

first generation in their family to attend college. 

Part of the complication here is that we know that having people 

involved in counseling students one-on-one, that matters, it improves their knowledge. But in many ways, we’ve moved away from 

allocating resources in that way. In the average high school there 

are 450 students per counselor, and the students in the high 

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schools that serve disproportionately low-income first-generation 

students, the numbers are often higher. 

We need to do multiple things. We need to simplify our system. 

We have to put in more mechanisms to help people understand and 

make the good choice, especially given our reliance on loans and 

the riskiness of loans, especially for this population. Thank you. 

Ms. MADIGAN. May I just very quickly say we’re dealing with 

teenagers. 

The CHAIRMAN. Say that again. 

Ms. MADIGAN. We’re dealing with teenagers for the most part. 

Some people are going back to school, but most of these people are 

teenagers when they are taking on a substantial amount of debt. 

They do not understand the long-term implications of that. So 

there absolutely have to be programs in high school and when people get to college to make sure they understand what they’ve taken 

on and what their ability is going to be to pay it back. 

The CHAIRMAN. Thank you all very much. I took a lot of time. 

Senator Alexander. 

Senator ALEXANDER. We had testimony in one of these hearings 

about that simplification which struck all of us here about how 

much consensus there was about the importance of it. If you’re presented with all this stuff, instead of this, and if you’re presented 

with it after you’ve already decided where to go to school instead 

of your junior year in high school, if high school counselors are 

spending all their time reading through this instead of counseling, 

they would have more time to advise students about how much 

they can afford and where they ought to go to school, which leads 

to the point that if we do simplify, we have to simplify, which 

means we have fewer programs. 

The one grant, one loan proposal that was made to us by witnesses said that an undergraduate ought to have a single grant 

and a single loan. That would mean, for example, that we would 

not have the subsidized loan, which 80 percent of students who 

have an unsubsidized loan have a subsidized loan. That saves $41 

billion over 10 years. That money could then be put for more Pell 

grants, and we expect there would be a lot more Pell grants if people filled out this instead of all this. 

It would also pay for year-round Pell grants, which is very expensive. We tried that a few years ago and then had to give up on it 

because of the cost of it. 

We have to simplify, which means getting rid of some options. If 

we get rid of options at the beginning, and if at the end instead 

of nine repayment options we have two, less confusion might mean 

more education. 

The only other thing—and Senator Harkin is correct, we don’t 

need to get into a big debate about Medicaid, except I want to just 

restate my position in this way. During the Great Recession after 

2008, because of the maintenance of effort requirement on States, 

Medicaid funding went up 15 percent in the State of Tennessee, 

higher education funding went down 15 percent. The growth didn’t 

go down 15 percent. The absolute amount went down 15 percent, 

and I’ll bet it did in Minnesota, Illinois, Indiana, Pennsylvania, and 

every other State in the country, and it was because Washington 

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was telling the State X is more important than Y, instead of letting 

the State spend its own dollars. 

President Obama’s former budget director, Peter Orszag, said if 

higher education’s share of State budgets had remained constant 

during this period instead of being crowded out by rising Medicaid 

costs, it would be getting some $30 billion more than it receives 

today or more than $2,000 per student. Now, $2,000 per student 

is a lot of money when the average tuition at a community college 

is $3,600. 

We have to be straightforward about this. If we want to require 

States from Washington to spend more for Medicaid, we need to 

understand that that means there’s going to be not disinvestment 

by States—States don’t want to spend less on higher education. 

They just don’t have the money if they’re required from here to 

spend it another way. 

That’s something we’re going to have to grapple with in the future, and obviously we have a difference of emphasis let’s say. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Well, since we did get into it—— 

[Laughter.] 

The CHAIRMAN [continuing]. I will say that the 2012 report from 

the Kaiser Foundation found that a decline in States’ revenues was 

a greater factor than increases in Medicaid on State budget shortfalls from 2008 through 2010. We were in a recession. What happens in a recession? People lose jobs. When they lose jobs and need 

health care, where do they go? Medicaid. It stands to reason. 

But at the same time, what States did is they started cutting 

taxes, cutting their revenues. I understand there was a big move 

there. The decline in State revenues, and that’s what happened. 

If you want to talk about Medicaid, the Affordable Care Act proposed that States that go into the Federal Medicaid system, for the 

first 3 years 100 percent of that increase would be picked up by the 

Federal Government and after that 90 percent. That’s better than 

the 50/50 that most States have. I think my State is about 50/50. 

Ninety percent of that would be picked up by the Federal Government. 

I say to my friend from Tennessee, maybe we have some kind of 

an agreement on this, that the Federal Government ought to do 

more in health care. I’m for a national health care system. I’m for 

a single payer system, the Federal Government. I’d like to get the 

States completely out of that. But I don’t think that that’s going 

to pass here in this—in any kind of Congress. 

I’m for a single payer. It would be streamlined. It would be 

cheaper. The Federal Government takes up—the States don’t have 

to worry about a darned thing in Medicaid after that. But I don’t 

know if that’s what my friend is advocating on the single payer system. 

But States, they have to step up and do their part too on higher 

education, and I would just say this about the simplification. 

Again, studies have shown—I would be corrected if I’m wrong on 

this—that about 1 percent of students who fill out a FAFSA do it 

on paper. They do it online, and it takes about 25 minutes. About 

25 minutes fills it out. 

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And my friend says, well, we may just have to do away with subsidized loans or SEOG and Perkins loans, but those are targeted 

for different populations. Then we have other things we come up 

with, but we say we want to increase or decrease the interest rates 

for certain occupations that we want people to go into, and we 

made that decision. Rightly or wrongly, we made that decision. So 

all those, I think, would go by the wayside. 

I’m all for simplification, but not at the expense of the poorest 

students, not at the expense of students who need a Perkins loan 

because they’re low interest rate, no interest rate while you’re in 

college. I pointed out that I had the NDAA when I went to school. 

I went to school at a State land grant college. I didn’t have any 

money, so I borrowed under that Eisenhower—they called it the Eisenhower Program at that time. All the time I was in school, there 

were no interest charges. I went into the military for 5 years, no 

interest charges. I then went to law school for 3 years under the 

GI bill, no interest charges. Then I had a 1-year grace period after 

I finished law school, no interest charges. And then, on my then 

Perkins loans or NDAA, then the interest clock started ticking. 

Think about that. I had 5, 8, 9, 10, 11 years where there were 

no interest charges on my student loans. Now, if that was good 

enough for my generation, why isn’t it good enough for this generation? Why is it now when they take out a loan, that interest rate 

clock starts ticking right away? 

Again, if it provided a whole generation of young people of my 

generation a great college education at very low cost—but we don’t 

do that anymore. So I say what the heck? If it was good enough 

for me, why isn’t it good enough for students today? 

I didn’t mean to have the last word. Do you want to say anything 

else? 

Senator ALEXANDER. No. I want to say thank you for your comments. 

After you leave, if you have any specific thoughts about simplification, things that we could actually write into a Higher Education Act, I would welcome those. If you have any specific recommendations about risk sharing for institutions on loans, we’re 

very actively considering that. Senator Jack Reed of Rhode Island 

is interested in that. I’m interested in it. Others are, too. But we 

want to make sure we do it in a correct way. I would welcome having those ideas. Thank you. 

The CHAIRMAN. Thank you. And I would join with Senator Alexander in requesting that, too. 

I think what this hearing has shown, and others, is that there 

is a Federal-State relationship here that we need to have for higher 

education. It extends from, obviously, loans and that type of thing 

to the States being involved in oversight and innovation. It involves 

consumer protections for students, both on the State level and the 

Federal level. 

What my draft tried to do is to see how do we reinvigorate that 

Federal-State relationship, and what are the proper roles for both 

in higher education, and that’s what we’re trying to seek to do in 

that regard. That’s what I think the key is to the reauthorization. 

To figure out how we both get the States back in the game and deHELPN-003 with DISTILLER

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lineate those unique responsibilities for both State, Federal Government, students and their families. 

I want to thank Senator Alexander for all of his participation in 

this. We’ve been great partners in this. Obviously, we have philosophical differences on things, but we don’t have personal differences. And I say this publicly, Senator Alexander has been a 

great member of this committee, and of course he brings a lot of 

expertise being a former college president, and also Secretary of 

Education. So we rely upon him a great deal for his expertise in 

this area. 

I thank you all for being here, and I request the record remain 

open until August 7th for members to submit statements and additional questions for the record. 

The committee will stand adjourned. Thank you all very much. 

[Additional material follows.] 

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ADDITIONAL MATERIAL 

GEORGIA STATE UNIVERSITY

COMPLETE COLLEGE GEORGIA

2013 STATUS REPORT

OVERVIEW

Ten years ago, Georgia State’s institutional graduation rate stood at 32 percent, 

and underserved populations were foundering. Graduation rates were 22 percent for 

Latinos, 29 percent for African Americans, and 18 percent for African American 

males. Pell students were graduating at rates barely half those of non-Pell students. 

In 2013, as a result of a campus-wide commitment to student success and more 

than a dozen innovative programs implemented over the past several years, Georgia 

State’s achievement gap is gone. The institutional graduation rate has improved 21 

points since 2003. This past 2 years alone, it has climbed 5.1 points—reaching a 

new record of 53.1 percent—and it is on pace to increase another 2 to 3 points next 

fall. (See Chart 1.) In the past decade, graduation rates are up 28 points for African 

Americans (to 57 percent in 2013), 41 points for African-American males (to 59 percent), and 44 points for Latinos (to 66 percent) (Chart 2). All of these numbers set 

all-time highs for Georgia State. Pell students now are as successful as non-Pell students. The total number of degrees conferred annually increased in the past year 

from 6,901 to 7,365 (up 7 percent), setting another institutional record. Just 4 years 

ago, the number of conferrals stood at 5,857, meaning that Georgia State is now 

graduating 1,500 more students per year than it was in 2008 (Chart 3). 

Significantly, Georgia State did not accomplish this dramatic turnaround through 

exclusion. Over the past decade, the student population has become larger (growing 

from 27,000 to 32,000), more diverse (moving from 46 percent to 61 percent nonwhite), and more economically disadvantaged (with the Pell population climbing 

from 31 percent to a record 56 percent in 2013) (Chart 4). In fact, Georgia State 

also set records this past year for the number of students enrolled in each of the 

following categories: Pell (with the number now topping 14,000 students), AfricanAmericans, Latinos, Asian-Americans, first generation, and military learners. Georgia State’s success with diverse student populations is of growing national significance. In September 2012, the Education Trust released a report ranking Georgia 

State 1st in the Nation in success with Latino students and 5th in the Nation in 

success of African American students relative to other student populations. Over the 

past year, Georgia State was named one of the Top 100 Hispanic Serving Universities in the United States, ranked among the top 50 universities in the Nation for 

the number of bachelor’s degrees conferred to Asian Americans, and, with a 17 percent once-year increase, ranked 1st in the Nation among all non-profit universities 

in bachelor’s degrees conferred to African Americans (Chart 5). 

UPDATES AND PROGRESS WITH SPECIFIC INITIATIVES

We believe that this impressive progress has come from a commitment to the systematic use of data in identifying problems that impact students across multiple racial, ethnic, and economic groups; the piloting of innovative, low-cost interventions; 

and the subsequent scaling up of the successful programs to maximize their impacts. This last point is of particular significance. It is by no means easy to develop 

effective programs, but it is also not enough. The institution must also be willing 

and able to scale the programs so that they impact large numbers of students. 

This year, Georgia State will welcome 300 at-risk freshmen into its Summer Success Academy; serve 2,500 students in Freshman Learning Communities; teach 

more than 7,500 pre-calculus students in a hybrid, adaptive learning format; tutor 

9,600 students in peer-led Supplemental Instruction; reverse 2,600 students from 

being dropped for non-payment through its Panther Retention Grant program; and 

track the academic progress of 25,000 students daily through its web-based GPS advisement system. Not one of these programs existed 10 years ago; indeed, all but 

two were implemented over the past 3 years. 

What follows are updates on some of the major initiatives mapped out in our 2012 

plan: 

Double the number and amount of need-and merit-based scholarships. Led by 

President Mark Becker and the GSU Foundation, the University has raised over 

$10 million in new scholarship moneys over the past 12 months. In 2010, GSU 

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opened a fully staffed Scholarship Resource Center and created a searchable data 

base of scholarship opportunities for students. Outcome: Disbursements to students 

from institutional scholarships and grants increased 63 percent over the past year. 

In its first year of operation, the new scholarship data base was used by more than 

9,000 students. 

Reduce the negative impacts of unmet need. With a large increase in the number 

of GSU students dropped for non-payment in recent terms, we initiated the Panther 

Retention Grants program in 2011. Within hours of the fee drop, personnel in enrollment services proactively reach out to hundreds of students who have just been 

dropped, offering small grants. In some cases, the difference between a student staying enrolled or not hinges on as little as $300—a surprising claim until one realizes 

that 40 percent of Georgia State students come from households with annual incomes of $30,000 or less. Outcome: Over the past year, 2,600 students were returned 

to classes after having been dropped as a result of this program. The grant recipients meet with financial aid counselors, and more than 90 percent have re-enrolled 

for subsequent semesters without requiring additional grants. Seventy percent of 

the students who were within two semesters of graduating when the grant was 

awarded have since graduated. 

Decrease the negative effects of the loss of the Hope scholarship. At Georgia State, 

74 percent of freshmen come into the University supported by the Hope Scholarship. 

In 2008, 51 percent of Hope freshmen lost the scholarship by the end of their first 

year due to their GPA dropping below 3.0. Of these students, only 9 percent ever 

gained the scholarship back again. For the others, their likelihood of graduating 

dropped 40 points, from 61 percent to 21 percent. Sadly, the vast majority of students who dropped out after losing Hope left Georgia State in good academic standing; they were on the path to graduating, they just lacked a 3.0 GPA. In 2009 we 

piloted a program, Keep Hope Alive, offering students $500 a semester for the first 

two semesters after they had lost Hope. In return for the funds, they signed a contract agreeing to attend a series of academic skills and financial literacy workshops 

and to meet with their academic advisors regularly during the year. Outcome: Last 

year, 62 percent of the students in the program recovered Hope by their next check 

point. The program has helped to raise Hope retention rates on campus from 49 percent in 2008 to 75 percent last year and has proven so effective that the Goizueta 

and the Coca-Cola Foundations both directed funds to the initiative as part of recent 

gifts to GSU (Chart 6). 

Overhaul academic advising. Georgia State had an academic advising system that 

had developed piece-meal over time. The University and its colleges maintained six 

different advising offices with little coordination between them, no common recordkeeping, and no common training. As prescribed by the 2011 Georgia State Strategic 

Plan, Georgia State has hired 42 additional academic advisors to bring our studentadvisor ratio to the national standard of 300-to-91. We have established a common 

record system, common training, and a campus-wide University Advising Council. 

In 2013, we opened a central University Advisement Center, housing almost 70 advisors who serve every college and major, in a location in the heart of campus. In 

August 2012, we went live with a cutting-edge, web-based GPS Advising system 

based on 7 years of RPG data and over 2 million GSU grades. The system, which 

monitors 25,000 students with nightly updates from Banner, uses 700 markers to 

track when students go off path academically and offers predictive analytics for how 

each student will do for every major and every course in the curriculum. Outcome: 

In its first year of operation, the GPS system was used in 15,800 advisement sessions. Twenty-four hundred fifty-two students were converted from off path to on 

path for graduation, and 900 had their schedules corrected during registration when 

markers were triggered indicating that they had signed up for wrong or inappropriate courses. According to our analytics, the net impact of the first-year of our advising initiative will be a 1.1 point increase in the institutional graduation rate. In 

the coming academic year, with the help of an Incubator Grant from the USG, we 

will become the first school in the Nation to integrate a nuanced set of financial 

analytics into a web-based advising platform. 

Redesign courses with high DFW rates. Five years ago, the mathematics requirement constituted an insurmountable progression roadblock for many students and 

was the cause of thousands of students losing the Hope scholarship. The DFW rate 

in College Algebra, for instance, was 43 percent. In some sections, the number 

topped 60 percent. The university piloted a hybrid model in which students attend 

a 1-hour lecture each week and spend 2 hours in a math lab with their class, working online with adaptive-learning exercises while the instructor monitors results 

and answers questions. Outcome: This past academic year, 7,500 students took their 

mathematics requirement in this hybrid format, including every student who enrolled in College Algebra. The DFW rate for the course has dropped from 43 percent 

HELPN-003 with DISTILLER

51 

to 21 percent. This means that 1,650 more students are passing the course in their 

first attempt than was to case 5 years ago. Our newly founded Center for Instructional Innovation is helping to expand such pedagogical innovation across the curriculum with seed grants to departments and faculty to explore new approaches in 

the classroom. 

Expand Supplemental Instruction. With many other courses with high DFW rates 

and limited resources, we decided to tap into one of our competitive advantages: 

large numbers of Federal Work Study students. We scoured the rosters of courses 

with high failure rates for Work Study students who had done well. Rather than 

assign these students to work in the library or cafeteria, we hired them to go 

through training, attend the course again, and offer tutoring sessions to students 

currently in the course. Outcome: The average course grade for those students who 

attend at least five SI sessions is almost half a letter grade higher than for those 

who do not attend, and the program now supports 9,600 students every year. A side 

benefit of the program has been that the graduation rates of the tutors, now teaching rather than working in the cafeteria or shelving books in the library, have also 

climbed by 10 points. 

Institute a Summer Success Academy for at-risk freshmen. Our data show that 

there are identifiable characteristics of admitted students that correlate highly to 

academic struggles and attrition. Rather than defer admission for the weakest students until spring, Georgia State piloted a Summer Success Academy in 2012. Students were admitted for the fall on the condition that they attend the Academy— 

a 7-week long, 7-credit-hour program in which all students are enrolled in Freshman Learning Communities (that extend into fall and spring) and are exposed to 

intensive academic support, including Supplemental Instruction, our early alert system, one-on-one advisement, and financial literacy workshops. Outcome: The 135 

students in the 2012 Summer Academy (representing the 4 percent of the fall freshman class with the highest risk factors) not only all completed the Summer Academy; the group went on to achieve a 2.95 average GPA during the fall semester— 

a higher average GPA than that earned by the remaining 96 percent of the freshman class. For 2013, the Academy has more than doubled in size and the students 

completed the 7-credit-hour summer term with an impressive average GPA of 3.29. 

Increase Enrollments in Freshmen Learning Communities. By breaking down the 

freshmen class into groups of 25 students and having the students travel to all of 

their fall semester classes together, Freshmen Learning Communities allow studypartnerships and friendships to form naturally and provide a structure through 

which the University can direct advisement, Supplemental Instruction, and other 

academic support to the students. The average 1-year retention and 6-year graduation rates are both 4 points higher for students enrolled in FLCs than for those who 

are not. Outcome: The 2011 University Strategic Plan pledged to increase the percent of freshmen enrolled in FLCs to 70 percent. We hit the target for the first time 

this fall, enrolling 2,160 of the incoming 2013 freshmen in FLCs—and increase of 

almost 690 students over FLC enrollments in 2012. 

PARTNERSHIPS

As a comprehensive research university with deep ties to metro-Atlanta and the 

State, Georgia State University has dozens of partnerships that serve the college 

completion goals not merely of Georgia State but of the entire State of Georgia. 

The College of Education, for instance, maintains multiple successful service centers that provide important resources to K–12, including professional development 

for teachers and administrators, training and support for mental health providers, 

and literacy resources for children and families. There is a commitment to expanding these thriving centers and clinics, including the Alonzo A. Crim Center for 

Urban Educational Excellence, the Center for School Safety, the Principals Center, 

the Center for Reading Recovery, and the Urban Literacy Clinic, in order to more 

effectively serve the needs of the Georgia. 

The University continues to work closely with Atlanta Public Schools on multiple 

fronts and has recently increased the number of students in its Washington High 

Early College program, which has brought hundreds of at-risk high-school students 

to take courses at Georgia State. We also maintain our successful Early College 

partnership with Carver High. Leadership from the national Woodrow Wilson Foundation recently visited campus and indicated that they would like to partner with 

Georgia State on several innovative programs for the preparation of K–12 teachers, 

especially in STEM areas. We also entered a new agreement with the Woodrow Wilson Foundation to educate and to support teachers in STEM fields through a comprehensive program of curricular and financial support. The partnership with this 

highly prestigious foundation—one of only a handful of such agreements that the 

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52 

Woodrow Wilson Foundation has entered in nationally—seeks to increase both the 

number and the quality of STEM teachers in Georgia. 

Our leadership in partnering with the Education Advisory Board to develop GPS 

Advising has led to a host of new collaborations. As a result of the 2013 CCG summit, multiple USG campuses sent representatives to campus to visit GSU’s new 

University Advisement Center, observe the advising protocols we have put in place, 

and see the web-based advising platform in action. More surprisingly, perhaps, is 

the fact that Georgia State has now worked with two other groups who saw the 

demonstration of GPS Advising at the Summit, the TCSG and the Georgia Association of Independent Colleges—with GSU providing webinars and hosting campus 

visits to the groups. In the past year, Georgia State has also been asked to present 

on its innovations in the area of advisement at meetings of Complete College America in Chicago, New Orleans, and Orlando; meetings of the American Association 

of State Colleges and Universities in Mobile and Baltimore; APLU meetings in 

Miami and Washington; the Aspen Institute’s forum on The Future of Higher education in Colorado; and with dozens of individual universities. The Chancellor of 

SUNY has asked Georgia State to present on its advising programs and its use of 

‘‘big data’’ in October at an annual meeting of the leadership of all SUNY schools, 

as has the Board of Regents of Ohio and the Indiana Higher Education Commission. 

We are partnering with the USG and the Education Advisory Board to develop the 

first-in-the-nation integration of financial analytics into a web-based advising platform. 

The coming year will also see a major partnership between Georgia State and the 

USG in developing principles and procedures for the support and credentialing of 

innovative means of learning, including MOOCS. Meanwhile, we continue to work 

with Georgia Perimeter College on a Lumina-funded project to improve transfer success between the two institutions using Lumina’s experimental DQP (Degree Qualifications Profile) as the model. 

KEY OBSERVATIONS AND LESSON LEARNED

One of the most exciting aspects of the innovative programs that Georgia State 

has implemented is their potential to provide novel data that can be employed to 

accelerate rates of college completion, not merely at Georgia State but elsewhere. 

The Panther Retention Grant Program—simple in concept, but highly uncommon 

nationally—was recently featured in an article in the Chronicle of Higher Education 

and in Jeff Selingo’s new book College (Un)bound precisely because it has revealed 

the strong positive impact that micro grants of as little as $300 can have on college 

persistence. As we track the data in the semesters ahead, we should be able to provide insights into the effect of such grants on college-completion rates—a study that 

will have national significance. 

Our tracking through the National Student Clearinghouse of all Georgia State 

students who leave the University has produced data now being cited nationally by 

Complete College America due to their startling implications. When one tracks 

Georgia State’s cohorts by race and ethnicity not merely through Georgia State but 

through all institutions nationally, success rates increase by 20 points for African 

Americans, 25 points for whites, and an incredible 29 points for Latinos (Chart 2). 

This has led to an increased appreciation of the transient nature of low-income and 

at-risk students: they and their families, often due to economic pressures, move 

around more than do better resourced students. Even more importantly, the data 

has led to increased appreciation of the under-reporting that occurs when we track 

success rates by individual institutions. Georgia State’s graduation rate of 51 percent climbs by more than 20 points when you include students who go on to enroll 

(and succeed) elsewhere. 

Perhaps most promisingly, the hundreds of thousands of datum being collected on 

a daily basis by Georgia State’s new GPS Advising system have the potential to be 

a game changer (and the subject of an upcoming article in The Wall Street Journal.) 

Academic advisement has long been a hold-out when it comes to data; the details 

of advisement are often veiled behind the private conversations of students and advisors. Now, we not only have the ability to see what impact the careful tracking 

of every undergraduate and his or her academic choices will have on existing 

metrics—encouraging news, for instance, is the fact that after 1 year of GPS Advising, Georgia State’s average number of credit hours at the time of completion is 

down for the first time in 5 years—it also opens the door to a whole new set of 

metrics. If we can track whether each student is on path or off path for timely graduation, how do these numbers compare by various degree programs and how do they 

track over time? (See Chart 7.) If we can identify all of the pre-Accounting students 

who failed to meet the minimum grade in their first course in the program and we 

HELPN-003 with DISTILLER

53 

intervene immediately, what percent of students can have their path righted and 

go on to succeed in the Accounting degree program? (See Chart 8.) If we can track 

the effects of different types of interventions, what potential do the resulting data 

hold for strengthening the nature and substance of the interventions that we offer? 

The search for such answers is exciting, and it will be a major focus of Georgia 

State’s college completion efforts in the coming year. 

For more information: Timothy Renick, Vice Provost and Chief Enrollment Officer, 

trenick@gsu.edu. 

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24453-1.eps
54 

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24453-2.eps

Chart 3 

Georgia State Degree Conferrals 

1-Vr 4-Vr 

2007-08 2008-09 2009-10 2010-11 2011-12 Change Chanoe 

5,857 6,188 6,419 6,901 7,365 +7°/o +260/o 

Chart 4 

Georgia State Students on Pell 

GO% 

55% 

50% 

Col 45% 

N 40% 

~ 40% --------

~ " 35% 

)0% 

---- -,3~1~%-- ~ 

__j-===~~------· -~--

25% ---------~--~--------·-- -·----------------------

Fall 2007 Fall 2008 Fall 2009 Fall 2010 Fall 20~~ Fall 2012 

-New t-reshmen 
55 

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24453-3.eps

Chart 5 

2012 African-American Bachelor's - All Disciplines 

% 

For Profit Schools Exd uded 

Diverse: Issues in Higher Education 

Chart 6 

Keep HOPE Alive 

, Targets students who have lost 

HOPE .... 

..... -,. Grants students $500/ semester 50'11 

for one year on the condition they Q'll. 

attend year-long series of 33% 

academic skills workshops and 2S'll. individual advisement sessions 17')1, 

::.> Institutional HOPE Retention Rate 8% 

2008: 49% "" Institutional HOPE Retention Rate 

2012: 75% 

62.5" 

t.U$rv('leM S \IIIIMt'IAYe/Mt 

HoPe o~ 1t1e JO.houf <:Mek.poinl 
56 

[Editor’s Note: For further details on the GSU GPS Advising system and the Panther Retention Program see http://success.gsu.edu/initiatives/gps-advising/.] 

UNITED STATES SENATE, 

WASHINGTON, DC 20510, 

August 12, 2014. 

Hon. TOM HARKIN, Chairman, Committee on Health, Education, Labor, and Pensions, 

428 Dirksen Senate Office Building, 

Washington, DC 20510. 

DEAR CHAIRMAN HARKIN: Please accept for the record my submission of the following document on behalf of the Coalition of 

Higher Education Assistance Organizations (COHEAO). 

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24453-4.eps
57 

Should you have any questions or need additional information 

please contact Ashley Eden on my staff at 4–9243. 

Sincerely, 

KAY R. HAGAN, 

United States Senator. 

COALITION OF HIGHER EDUCATION ASSISTANCE ORGANIZATIONS

(COHEAO), 

WASHINGTON, DC 20005–3586, 

August 4, 2014. 

Hon. TOM HARKIN, Chairman, 

Committee on Health, Education, Labor, and Pensions, 

428 Dirksen Senate Office Building, 

Washington, DC 20510. 

DEAR CHAIRMAN HARKIN: The Coalition of Higher Education Assistance Organizations (COHEAO) is writing to submit comments to the Congressional Record related 

to the July 24, 2014, HELP Committee Hearing: The Role of States in Higher Education. COHEAO would like to thank you and the committee for your efforts to improve and simplify the Federal financial aid process so that students can readily access the financing they need for postsecondary education. Specifically, COHEAO 

would like to support the positive and accurate comments you made [during the 

hearing] regarding the benefits of the Federal Perkins Loan Program to students 

and how critically important the program is to reauthorize as part of the Higher 

Education Act. 

Since 1958, the Federal Perkins Loan Program has: 

• Provided subsidized, low-interest loans to assist undergraduate and graduate 

students with economic need to finance the cost of higher education; • Utilized campus-based revolving funds established from a combination of Federal and institutional contributions to make the loans; and, 

• Filled a critical gap that exists for many students after Federal grant and Stafford loan funds are applied. 

The success of this loan program is a result of the central role played by higher 

education institutions that originate the loans, counsel their students, and work 

closely with students throughout their entire repayment process. The Perkins Loan 

Program is a risk-sharing program in which institutions contribute at least onethird of the funds that go toward their students’ awards. This ‘‘ownership interest’’ 

greatly contributes to the successful management of this vital program. 

For example, New York has the largest Perkins portfolio in the country totaling 

$862 million, representing 10 percent of the overall dollars awarded to 16 percent 

of the students who benefit from Perkins each year. Last year, the State University 

of New York (SUNY) campuses combined to award $21.2 million in Perkins loans 

to more than 26,000 students. The Perkins program is critical funding for NY students and helps significantly in their ability to access affordable student aid. 

Across the United States in 2012–13, close to 500,000 students with need were 

awarded nearly $1 billion in Perkins loans, with an average amount of about $2,000 

awarded per student. This funding is critical to students who would otherwise be 

forced to borrow less beneficial private loans or leave school altogether. Perkins loan 

recipients are predominantly from lower income families as detailed below: 

• 67 percent of Perkins borrowers are dependent students—34 percent of whom 

are from families with household incomes of less than $30,000. 

• 20 percent of Perkins borrowers are independent students, 70 percent of whom 

have personal incomes of less than $20,000. 

• 13 percent are graduate students, for whom no other low-cost subsidized loan 

program is available. 

This program provides critical support to students with economic need. It offers 

low-interest, fee-free funds to students, flexible repayment terms and generous forgiveness options that are public service oriented. It is administered at the school 

level to provide a highly efficient, self-sustaining program with accountability, transparency, and risk-sharing. 

This proven and longstanding loan program is in jeopardy. In order to keep the 

Perkins Loan Program alive, Congress needs to reauthorize the program or it will 

sunset on October 1, 2015. COHEAO encourages the Chairman to include language 

in the HEA that will ensure the Federal Perkins Loan Program will continue to be 

HELPN-003 with DISTILLER

58 

available to the hundreds of thousands of students who need and rely on it to assist 

in their ability to pursue a higher education. 

COHEAO thanks the Chairman and the committee for this opportunity to submit 

comments to the record and would be happy to answer any questions. 

Sincerely, 

MARIA LIVOLSI, President, COHEAO, 

Director, State University of New York. 

Since 1981, the COHEAO has served as a partnership of colleges, universities, and 

organizations dedicated to promoting the Federal Campus-Based loan programs and 

other student financial services. Committed to the preservation and improvement of 

the Federal Perkins Loan and Health and Human Services Loan Programs, 

COHEAO also serves as an advocate and education resource on consumer finance 

issues affecting colleges and universities. 

CAMPUS PARTNERS, 

WINSTON-SALEM, NC 27106, 

August 4, 2014. 

Hon. TOM HARKIN, Chairman, 

Committee on Health, Education, Labor, and Pensions, 

428 Dirksen Senate Office Building, 

Washington, DC 20510. 

DEAR CHAIRMAN HARKIN: Campus Partners is writing to submit comments to the 

Congressional Record related to the July 24, 2014, HELP Committee Hearing: The 

Role of States in Higher Education. Campus Partners would like to thank you and 

the committee for your efforts to improve and simplify the Federal financial aid 

process so that students can readily access the financing they need for postsecondary education. 

Specifically, we would like to support the positive and accurate comments you 

made [during the hearing] regarding the benefits of the Federal Perkins Loan Program to students and how critically important the program is to reauthorize as part 

of the Higher Education Act. 

Since 1958, the Federal Perkins Loan Program has: 

• Provided subsidized, low-interest loans to assist undergraduate and graduate 

students with economic need to finance the cost of higher education; 

• Utilized campus-based revolving funds established from a combination of Federal and institutional contributions to make the loans; and, 

• Filled a critical gap that exists for many students after Federal grant and Stafford loan funds are applied. 

The success of this loan program is a result of the central role played by higher 

education institutions that originate the loans, counsel their students, and work 

closely with students throughout their entire repayment process. The Perkins Loan 

Program is a risk-sharing program in which institutions contribute at least onethird of the funds that go toward their students’ awards. This ‘‘ownership interest’’ 

greatly contributes to the successful management of this vital program. 

Across the United States in 2012–13, close to 500,000 students with need were 

awarded nearly $1 billion in Perkins loans, with an average amount of about $2,000 

awarded per student. This funding is critical to students who would otherwise be 

forced to borrow less beneficial private loans or leave school altogether. Perkins loan 

recipients are predominantly from lower income families as detailed below: 

• 67 percent of Perkins borrowers are dependent students—34 percent of whom 

are from families with household incomes of less than $30,000. 

• 20 percent of Perkins borrowers are independent students, 70 percent of whom 

have personal incomes of less than $20,000. 

• 13 percent are graduate students, for whom no other low-cost subsidized loan 

program is available. 

This program provides critical support to students with economic need. It offers 

low-interest, fee-free funds to students, flexible repayment terms and generous forgiveness options that are public service oriented. It is administered at the school 

level to provide a highly efficient, self-sustaining program with accountability, transparency, and risk-sharing. 

This proven and longstanding loan program is in jeopardy. In order to keep the 

Perkins Loan Program alive, Congress needs to reauthorize the program or it will 

sunset on October 1, 2015. Campus Partners encourages the Chairman to include 

language in the HEA that will ensure the Federal Perkins Loan Program will conHELPN-003 with DISTILLER

59 

tinue to be available to the hundreds of thousands of students who need and rely 

on it to assist in their ability to pursue a higher education. 

Campus Partners thanks the Chairman and the committee for this opportunity 

to submit comments to the record and would be happy to answer any questions. 

Sincerely, 

DONNA K. DEWISPELAERE, 

President and CEO. 

[Whereupon, at 11:52 a.m., the hearing was adjourned.] 

Æ 

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