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24–582 PDF 2017

IMPROVING FEDERAL STUDENT AID TO BETTER 

MEET THE NEEDS OF STUDENTS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HIGHER EDUCATION AND 

WORKFORCE DEVELOPMENT 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, MARCH 21, 2017 

Serial No. 115–10 

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

( 

Available via the World Wide Web: 

www.gpo.gov/fdsys/browse/committee.action?chamber=house&committee=education 

or 

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

CEWDOCROOM with DISTILLER

(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

VIRGINIA FOXX, North Carolina, Chairwoman 

Joe Wilson, South Carolina 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn ‘‘GT’’ Thompson, Pennsylvania 

Tim Walberg, Michigan 

Brett Guthrie, Kentucky 

Todd Rokita, Indiana 

Lou Barletta, Pennsylvania 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

David Brat, Virginia 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Elise Stefanik, New York 

Rick W. Allen, Georgia 

Jason Lewis, Minnesota 

Francis Rooney, Florida 

Paul Mitchell, Michigan 

Tom Garrett, Jr., Virginia 

Lloyd K. Smucker, Pennsylvania 

A. Drew Ferguson, IV, Georgia 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Ranking Member 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Takano, California 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Donald Norcross, New Jersey 

Lisa Blunt Rochester, Delaware 

Raja Krishnamoorthi, Illinois 

Carol Shea-Porter, New Hampshire 

Adriano Espaillat, New York 

Brandon Renz, Staff Director 

Denise Forte, Minority Staff Director 

SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE 

DEVELOPMENT 

BRETT GUTHRIE, Kentucky, Chairman 

Glenn ‘‘GT’’ Thompson, Pennsylvania 

Lou Barletta, Pennsylvania 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

Glenn Grothman, Wisconsin 

Elise Stefanik, New York 

Rick W. Allen, Georgia 

Jason Lewis, Minnesota 

Paul Mitchell, Michigan 

Tom Garrett, Jr., Virginia 

Lloyd K. Smucker, Pennsylvania 

Susan A. Davis, California 

Ranking Member 

Joe Courtney, Connecticut 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Raja Krishnamoorthi, Illinois 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Mark Takano, California 

Lisa Blunt Rochester, Delaware 

Adriano Espaillat, New York 

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(III) 

C O N T E N T S 

Page 

Hearing held on March 21, 2017 ............................................................................ 1 

Statement of Members: 

Davis, Hon. Susan A., Ranking Member, Subcommittee on Higher Education and Workforce Development ............................................................. 4 

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

Guthrie, Hon. Brett, Chairman, Subcommittee on Higher Education and 

Workforce Development ................................................................................ 1 

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

Statement of Witnesses: 

Chingos, Dr. Matthew M., Senior Fellow, Urban Institute, Washington, 

DC .................................................................................................................. 41 

Prepared statement of ............................................................................... 43 

Conklin, Ms. Kristin, Founding Partner, HCM Strategists, Washington, 

DC .................................................................................................................. 20 

Prepared statement of ............................................................................... 22 

Copeland-Morgan,, Mrs. Youlonda, Vice Provost of Enrollment Management, University of California, Los Angeles ............................................... 33 

Prepared statement of ............................................................................... 35 

Soucier, Ms. Joellen, Executive Director of Financial Aid, Houston Community College System, Houston, TX ......................................................... 7 

Prepared statement of ............................................................................... 10 

Additional Submissions: 

Adams, Hon. Alma S., a Representative in Congress from the State 

of North Carolina: 

Letter dated March 30, 2017, from United Negro College Fund, Inc. 

(UNCF) ................................................................................................... 84 

Mrs. Copeland-Morgan: 

Article: The University of California at a Glance ................................... 90 

Courtney, Hon. Joe, a Representative in Congress from the State of 

Connecticut: 

Article: The next victims of the student debt crisis: Mom and dad ...... 98 

Questions submitted for the record by: 

Ms. Adams ................................................................................................. 106 

Mrs. Davis .................................................................................................. 108 

Chairman Guthrie .....................................................................................

Espaillat, Hon. Adriano, a Representative in Congress from the State 

of New York ............................................................................................ 109 

Foxx, Hon. Virginia, a Representative in Congress from the State 

of North Carolina ....................................................................... 103, 105, 114 

Takano, Hon. Mark, a Representative in Congress from the State 

of California ............................................................................................ 110 

Responses to questions submitted for the record: 

Dr. Chingos ................................................................................................ 116 

Ms. Conklin ................................................................................................ 117 

Mrs. Copeland-Morgan........................................................................... 106-110 

Ms. Soucier ................................................................................................ 119 

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(1) 

IMPROVING FEDERAL STUDENT AID TO 

BETTER MEET THE NEEDS OF STUDENTS 

Tuesday, March 21, 2017 

House of Representatives 

Committee on Education and the Workforce, 

Subcommittee on Higher Education and Workforce Development 

Washington, D.C. 

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

2175, Rayburn House Office Building, Hon. Brett Guthrie [chairman of the subcommittee] presiding. 

Present: Representatives Guthrie, Messer, Grothman, Stefanik, 

Allen, Lewis, Mitchell, Smucker, Davis, Courtney, Adams, 

DeSaulnier, Krishnamoorthi, Polis, Sablan, Takano, Blunt Rochester, and Espaillat. 

Also Present: Representatives Foxx, Scott and Bonamici. 

Staff Present: Courtney Butcher, Director of Member Services 

and Coalitions; Emmanual Guillory, Professional Staff Member; 

Tyler Hernandez, Deputy Communications Director; Amy Raaf 

Jones, Director of Education and Human Resources Policy; Nancy 

Locke, Chief Clerk; Dominique McKay, Deputy Press Secretary; 

James Mullen, Director of Information Technology; Krisann Pearce, 

General Counsel; Jenny Prescott, Professional Staff Member; Alex 

Ricci, Legislative Assistant; Mandy Schaumburg, Education Deputy 

Director and Senior Counsel; Emily Slack, Professional Staff Member; Alissa Strawcutter, Deputy Clerk; Tylease Alli, Minority Clerk/ 

Intern and Fellow Coordinator; Jacque Chevalier, Minority Deputy 

Education Policy Director; Denise Forte, Minority Staff Director; 

Mishawn Freeman, Minority Staff Assistant; Christine Godinez, 

Minority Staff Assistant; Stephanie Lalle, Minority Press Assistant; Veronique Pluviose, Minority Civil Rights Counsel; Katherine 

Valle, Minority Education Policy Advisor, and Christopher Zbrozek, 

Minority Education Detailee. 

Chairman GUTHRIE. A quorum being present, the Subcommittee 

on Higher Education and Workforce Development will come to 

order. 

Good morning, and welcome to the first hearing of the Subcommittee on Higher Education and Workforce Development for 

the 115th Congress. I am honored to serve as the new chairman 

of this subcommittee. I want to thank Dr. Foxx for choosing me for 

this gavel, and I want to thank my colleagues for trusting me to 

lead this important subcommittee. 

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2 

It is also my honor to welcome our new ranking member, Representative Susan Davis. I look forward to working together this 

Congress. I am confident we will advance solutions that help prepare students with the knowledge and skills they need to succeed 

in the classroom, in the workforce, and in life. 

Today’s hearing is a part of the committee’s broader effort to 

strengthen higher education. We all know and have seen the significant opportunities provided by a postsecondary education. Unfortunately, as we have also seen, realizing the dream of a higher 

education has become increasingly difficult for many individuals 

across the country. 

As Chairwoman Foxx pointed out at a hearing earlier this year, 

college costs are rising at a rapid rate. In fact, since 2006, average 

tuition and fees have increased by more than 40 percent at 4-year 

public institutions, and almost 27 percent at 4-year private nonprofit institutions. 

Meanwhile, for a variety of reasons, students are not completing 

their education. It is estimated that among students who started 

college in the fall of 2010, only 55 percent had earned a degree or 

certificate by 2016. That is not even 4 years. It is 6 years, with 

nothing to show for it in the end. 

These are just two statistics that will help illustrate the challenges individuals face when they consider whether or not they 

should or can pursue a higher education. They are also two of the 

reasons we are working to make higher education more accessible 

and affordable. One of the ways we can accomplish this goal is by 

simplifying and improving Federal student aid. 

Over the years, the Federal student aid system has become too 

complex. Students and their families are forced to navigate 6 different types of Federal loans, 9 different repayment plans, 8 different forgiveness programs, and 32 deferment or forbearance options, each with its own rules and regulations. Sounds complicated, 

right? 

Now, imagine you are a student with no background or experience in navigating such financial options and responsibilities. 

Faced with all these choices and decisions, some individuals do not 

even know where to begin. Others simply give up. We need to get 

rid of the complexity. We need to eliminate the confusion students 

face, and there are a number of ways we can do both. 

Just yesterday, I introduced a bill, the Empowering Students 

Through Enhanced Financial Counseling Act, that would improve 

the timing, frequency, and content of financial aid counseling. 

These changes to current policy would help students and their 

families better understand their options and responsibilities when 

it comes to paying for college. It is an idea that has enjoyed strong 

bipartisan support in the past, and I am hopeful it will be part of 

the discussion as we move forward with efforts to strengthen higher education. 

Another idea is streamlining Federal aid into one grant program, 

one loan program, and one work study program, ‘‘streamlining’’ 

being the operative word there. It is not about cutting. It is about 

cleaning things up, making it easier for individuals to explore their 

options, find the right school, figure out how to pay for their education, and determine the best way to repay loans. 

CEWDOCROOM with DISTILLER

3 

These ideas are just two of many solutions that have been proposed. Each makes different reforms, but they all have the same 

goal: make the system more efficient and more responsive to the 

needs of students. 

Simplifying Federal student aid is one principle in a comprehensive framework that will guide our work to strengthen higher education, but it is a critical one. Doing so will provide students and 

their families with a more timely and clearer picture of the financial assistance they are eligible to receive. 

It will ensure taxpayer dollars are supporting those students who 

need help the most, and perhaps, more importantly, it will help 

more Americans realize that the dream of a higher education is 

within reach. 

I look forward to hearing from our witnesses today and learning 

more about their ideas for simplifying and improving student aid. 

I know this discussion will help guide our work ahead as we move 

forward to reauthorize the Higher Education Act. 

This hearing is especially important to me. When my third child, 

my daughter, was born, I remember holding her and her brother 

coming into the room, and I started looking at them there together 

and how nice it was, baby and young son, and then it hit me. I said 

18 years from now, they are going to be in college at the same 

time. Well, this is the 18th year, so I have a senior and a freshman, 

one in an out-of-state school and one in a private school. So, higher 

education financing is something that is on my mind. 

With that, I want to now recognize Ranking Member Davis for 

her opening remarks. 

[The information follows:] 

Prepared Statement of Hon. Brett Guthrie, Chairman, Subcommittee on 

Higher Education and Workforce Development 

Today’s hearing is part of our committee’s broader effort to strengthen higher education. We all know and have seen the significant opportunities provided by a postsecondary education. Unfortunately, as we have also seen, realizing the dream of 

a higher education is becoming increasingly difficult for many individuals across the 

country. 

As Chairwoman Foxx pointed out at a hearing earlier this year, college costs are 

rising at a rapid rate. In fact, since 2006, average tuition and fees have increased 

by more than 40 percent at four-year public institutions and by almost 27 percent 

at four-year private nonprofit institutions. Meanwhile, for a variety of reasons, students aren’t completing their education. It is estimated that among students who 

started college in the fall of 2010, only 55 percent had earned a degree or certificate 

by 2016. That’s not even four years. It’s six years—with nothing to show for it at 

the end. 

These are just two statistics that help illustrate the challenges individuals face 

when they consider whether or not they should or can pursue a higher education. 

They’re also two of the reasons we are working to make higher education more accessible and affordable. One of the ways we can accomplish that goal is by simplifying and improving federal student aid. 

Over the years, the federal student aid system has become too complex. Students 

and their families are forced to navigate six different types of federal student loans, 

nine different repayment plans, eight different forgiveness programs, and 32 

deferment and forbearance options—each with its own rules and requirements. 

Sounds complicated, right? 

Now, imagine you are a student with no background or experience in navigating 

such financial options and responsibilities. Faced with all of these choices and decisions, some individuals don’t even know where to begin. Others simply give up. 

We need to get rid of the complexity. We need to eliminate the confusion students 

face. And there a number of ways we can do both. 

CEWDOCROOM with DISTILLER

4 

Just yesterday, I introduced a bill—the Empowering Students Through Enhanced 

Financial Counseling Act — that would improve the timing, frequency, and content 

of financial aid counseling. These changes to current policy would help students and 

their families better understand their options and responsibilities when it comes to 

paying for college. It’s an idea that has enjoyed strong bipartisan support in the 

past, and I’m hopeful it will be part of the discussion as we move forward with efforts to strengthen higher education. 

Another idea is streamlining federal aid into one grant program, one loan program, and one work study program—‘‘streamlining’’ being the operative word there. 

It’s not about cutting. It’s about cleaning things up—making it easier for individuals 

to explore their options, find the right school, figure out how to pay for their education, and determine the best way to repay their loans. 

These ideas are just two of many solutions that have been proposed. Each makes 

different reforms, but they all have the same goal: Make the system more efficient 

and more responsive to the needs of students. 

Simplifying federal student aid is one principle in a comprehensive framework 

that will guide our work to strengthen higher education, but it’s a critical one. 

Doing so will provide students and their families with a more timely and a clearer 

picture of the financial assistance they are eligible to receive. It will ensure taxpayer 

dollars are supporting those students who need help the most. And, perhaps most 

importantly, it will help more Americans realize that the dream of a higher education is within reach. 

I look forward to hearing from our witnesses today and learning more about their 

ideas for simplifying and improving student aid. I know this discussion will help 

guide the work ahead as we continue our efforts to reauthorize the Higher Education Act. 

Mrs. DAVIS. Thank you. Thank you, Chairman Guthrie. I, too, 

look forward to a strong working relationship, and thank you to the 

witnesses for being here. I look forward to hearing your testimony. 

The Higher Education Act was enacted to expand access to college and provide an affordable degree to anyone wanting to pursue 

an education post-high school. Today’s hearing provides us with an 

opportunity to hear from experts about ways to improve the Federal student aid system established in this legislation. 

Since HEA’s enactment, the United States has made substantial 

progress in college access. Students of color and low-income students are going to college at higher rates than ever before. Although we should celebrate these outcomes, we know there is tremendous room for improvement. 

When we look at the data closely, we realize that low-income students are still accessing higher education at lower rates than their 

more affluent peers back in the mid-1970s. This means that instead of making college less affordable by slashing billions from 

Federal financial aid programs like the President’s partial budget 

request, us Democrats believe that with sufficient investment, the 

right targeting towards the students with the greatest need, and 

an easy access to financial aid, the current system could better 

serve America’s working families. 

Through the HEA, the Federal Government has been able to provide Pell grants, Federal loans, and campus-based aid to millions 

of undergraduate and graduate students, but the Pell grant program now covers the smallest share of undergraduate costs since 

its inception. 

As state disinvestment and demographic changes have driven 

tuition up, Congress has failed to allow the program to keep up 

with costs and instead has made changes to reduce eligibility in 

order to keep the costs down. 

CEWDOCROOM with DISTILLER

5 

We must strengthen Pell by increasing the maximum award, indexing the award to inflation, reinstating Summer Pell, and preserve any remaining funds to reinvest in the program in future 

years. Otherwise, low-income students will increasingly rely on 

loans to afford their education. With more students taking out larger loans, we must improve the system so students have access to 

favorable terms and streamlined income-driven repayment plans. 

Proposals that remove the availability of subsidized loans for undergraduate students and eliminate PLUS loans for parents to create a one loan system would force low-income families to take out 

private loans, which lack the consumer protections of Federal student loans. 

As our country fully shifts to a knowledge-based economy, workers with graduate degrees are increasingly sought after, but 

throughout the years, graduate students have been excluded from 

the Federal loan system. If we want all students to have access to 

high-paying jobs, Congress must preserve access to these loans as 

well. 

Congress also has a unique opportunity to strengthen the campus-based aid programs during this reauthorization. Campus-based 

aid allows students to work part-time to receive additional grant 

aid and borrow additional subsidized loans. 

So, we should preserve and bolster these programs, not eliminate 

them, as is currently being proposed. 

Robust and targeted investments are just two pieces of the puzzle. We should make financial aid easier to access. Too many students are unaware of the financial aid options provided by the government and forego the application process, and we know, you 

know, that it is a bit overwhelming and those who do apply find 

the form complex and confusing. 

Although the form has been greatly improved since its creation, 

we must ensure that students have a simple and functional tool at 

their disposal, and the recent outage of the IRS data retrieval tool 

used when filing the Free Application for Federal Student Aid, 

what we know as FAFSA, has already increased the burdensome 

verification process. 

So, we must work together to ensure the temporary shutdown of 

this tool does not negatively dissuade students from applying for 

aid or attending college. 

Mr. Chairman, we need to improve the system to work for all 

students, and we must create policies that pay close attention to 

those who have been traditionally underserved by our system. This 

will ensure that we can pass a strong reauthorization of HEA focused on access, on affordability, and, very important, completion. 

Thank you, Mr. Chairman. I yield back. 

[The information follows:] 

Prepared Statement of Hon. Susan A. Davis, Ranking Member, 

Subcommittee on Higher Education and Workforce Development 

Thank you, Chairman Guthrie. And thank you to the witnesses for being here. 

I look forward to hearing your testimony. 

The Higher Education Act was enacted to expand access to college and provide 

an affordable degree to anyone wanting to pursue an education post high school. 

And today’s hearing provides us with an opportunity to hear from experts about 

ways to improve our federal student aid system established in this legislation. 

CEWDOCROOM with DISTILLER

6 

Since HEA’s enactment, the United States has made substantial progress in college access. Students of color and low-income students are going to college at higher 

rates than ever before. And although we should celebrate these outcomes, there is 

room for improvement. When we look at the data closely, we realize that low-income 

students are still accessing higher education at lower rates than their more affluent 

peers back in the mid-1970s. 

This means that instead of making college less affordable by slashing billions from 

the federal financial aid programs like the President’s 

partial budget requests, House Democrats believe that with sufficient investment, 

the right targeting toward the students with the greatest need, and easy to access 

financial aid, the current system could better serve America’s working families. 

Through the HEA, the federal government has been able to provide Pell Grants, 

federal loans, and campus-based aid to millions of undergraduate and graduate students. 

But the Pell Grant program now covers the smallest share of undergraduate costs 

since its inception. As state disinvestment and demographic changes have driven 

tuition up, Congress has failed to allow the program to keep up with costs and instead, has made changes to reduce eligibility in order to keep the cost down. We 

must strengthen Pell by increasing the maximum award, indexing the award to inflation, reinstate Summer Pell, and preserve any remaining funds to reinvest in the 

program in future years. Otherwise, low-income students will increasingly rely on 

student loans to afford their education. 

With more students taking out larger loans, we must improve the system so students have access to favorable terms and streamlined income-driven repayment 

plans. Proposals that remove the availability of subsidized loans for undergraduate 

students and eliminate PLUS loans 

for parents to create a ‘‘one loan’’ system would force low-income families to take 

out private loans, which lack the consumer protections of federal student loans. And 

as our country fully shifts to a knowledge-based economy, workers with graduate 

degrees are increasingly sought after. But throughout the years, graduate students 

have been excluded from the federal loan system. If we want all students to have 

access to high paying job, Congress must preserve access to these loans as well. 

Chairman, Congress also has a unique opportunity to strengthen the campusbased aid programs during this reauthorization. Campus-based aid allows students 

to work part-time, receive additional grant aid, and borrow additional subsidized 

loans. We should preserve and bolster these programs – not eliminate them as the 

President requests. 

Robust and targeted investments are just two pieces of the puzzle. We should 

make financial aid easier to access. Too many students are unaware of the financial 

aid options provided by the government and forego the application process. And 

those who do apply find the form complex and confusing. Although this form has 

been greatly improved since its creation, we must ensure that students have a simple and functional tool at their disposal. The recent outage of the IRS Data Retrieval Tool used when filing the Free Application for Federal Student Aid (FAFSA) 

has already increased the burdensome verification 

process. We must work together to ensure the temporary shutdown of this tool 

does not negatively dissuade students from applying for aid or attending college. 

Chairman, we need to improve the system to work for all students and we must 

create policies that pay close attention to those who have been traditionally underserved by our system. This will ensure that we can pass a strong reauthorization 

of HEA focused on access, affordability, and completion. 

Thank you, Chairman. I yield back. 

Chairman GUTHRIE. Thank you. I thank the ranking member for 

yielding back. Pursuant to Committee Rule 7(c), all members will 

be permitted to submit written statements to be included in the 

permanent hearing record. Without objection, the hearing record 

will remain open for 14 days to allow such statements and other 

extraneous material referenced during the hearing to be submitted 

for the official hearing record. 

I would now like to turn to introduction of our distinguished witnesses. Ms. JoEllen Soucier is the executive director of financial aid 

for the Houston Community College System in Houston, Texas. 

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7 

Ms. Kristin Conklin is a founding partner for HCM Strategists, 

LLC, a government relations strategy and development firm. 

Mrs. Youlonda Copeland-Morgan is vice president of enrollment 

management with the—we have a ball game—I am from Kentucky, 

that is coming up, University of California, Los Angeles, who will 

be playing the Wildcats this Friday night. Two great programs. 

Dr. Matt Chingos, who is a senior fellow at the Urban Institute, 

where he studies education-related topics at both the K–12 and 

postsecondary levels. 

I will now ask the witnesses to stand and raise your right hand. 

You do not have to stand, but since you are standing, raise your 

right hand. 

[Witnesses sworn.] 

Chairman GUTHRIE. Let the record reflect the witnesses answered in the affirmative. Thank you. 

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

explain our lighting system. You each have 5 minutes to present 

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

green. When 1 minute is left, the light will turn yellow. When your 

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

you to wrap up your remarks as fast as you are able. Members will 

each have 5 minutes to ask questions. 

First, recognized for 5 minutes for her testimony is Ms. Soucier. 

Thank you. You are recognized for 5 minutes. 

TESTIMONY OF JOELLEN SOUCIER, EXECUTIVE DIRECTOR OF 

FINANCIAL AID, HOUSTON COMMUNITY COLLEGE SYSTEM, 

HOUSTON, TEXAS 

Ms. SOUCIER. Chairman Guthrie, Ranking Member Davis, and 

members of the subcommittee, good morning. Thank you for inviting me to testify today. I am very proud to be here. 

I’ve been a financial aid administrator for 29 years, and am passionate about my work. I became a financial aid director in 1992, 

and have held leadership positions in various sectors of higher ed. 

My current institution, Houston Community College, serves approximately 40,000 aid recipients each year, of which over 30,000 

receive a Pell grant. When I entered college, I was a first-generation student from a low-income household. Without financial aid, 

college would not have been possible. 

Today, my testimony will identify some of the current complexities and resulting challenges that exist, in the hopes that we can 

move towards simplifying the entire financial aid process. 

The challenges can be categorized into four key areas, the Federal application process, consumer information, student aid programs, and student loan repayment. 

The discussion around financial aid simplification often centers 

upon the number of questions on the Federal application. While the 

number can be stunning, 83 for independent and 126 for dependent 

students, the advent of more advanced skip-logic has assisted with 

shortening the time it takes to complete the online application. 

Still, applying for financial aid remains a barrier for many. 

The confusion with the process can be demonstrated by my experience at Houston Community College. Our communication plan 

consists of robust messages. We have over 70 different email comCEWDOCROOM with DISTILLER

8 

munications sent through our aid delivery process. We employ 25 

staff in our call center. 

We have a detailed phone messaging system, over 50 staff covering 14 aid offices across the city, and a communications coordinator feeding financial aid messages through various social media 

platforms. Regardless of these immense efforts, our students are 

confused and frustrated. 

In September of 2015, President Obama and Secretary Duncan 

announced that beginning on October 1, 2016, the application 

would use prior-prior income. This change results in earlier information, reduces administrative burden, and faster delivery of aid 

to students. 

This type of streamlining is needed in all areas of the financial 

aid process. The upcoming reauthorization provides a great opportunity to focus on improving consumer information that students 

and families receive. 

There are over 65 consumer information topics that appear in 

over 140 different regulations, many added in recent years. As you 

might imagine, administrators in my system spend hours tracking, 

collecting, reporting, and disclosing information. 

Navigating consumer information is particularly difficult for the 

31 percent of our credit students that are first- generation. These 

families have no experience with college, and the students truly do 

not understand the incredible amount of information that we provide, not to mention disclosures come at a time when students are 

completing all other steps required to enroll in college. 

The most important document for an aid applicant is the award 

letter. It informs the applicant of aid for which they may qualify. 

I use the word ‘‘may’’ because each program has different eligibility 

requirements, and based on student behavior and enrollment decisions, the student may or may not receive those funds. 

There are a number of grant, loan, and work programs that a 

student may see on an award letter, each with its own criteria and 

requirements. It is confusing to the student and tends to change 

each year, making it nearly impossible for a family to plan for the 

student’s entire college educational costs. 

Obtaining student loan funding is the most complicated process 

of all the aid programs. The complexity makes it difficult for students to understand loan eligibility. 

Reauthorization is a perfect time to examine the need to retain 

annual and aggregate limits based on grade levels, dependency status, program of studies, and attendance. 

At Houston Community College, over 18,000 students borrow 

from the student aid programs each year. We need greater authority to help borrowers stay within reasonable levels of debt, and require additional loan counseling based on the needs of our borrowers. Right now, schools have very little control over how much 

students borrow, and are prohibited from acquiring annual loan 

counseling. 

Reauthorization provides an opportunity to make loan repayment 

easier for students. Right now, there are nine widely available repayment plans. Understandably, this creates a great deal of perplexity for borrowers. Many of our students can benefit from inCEWDOCROOM with DISTILLER

9 

come-driven repayment options, but are unable to navigate the 

many programs to determine their best options. 

Houston Community College has been challenged with an 18 to 

22 percent default rate over the past 5 years. We contracted with 

a third-party agency to increase outreach to students and assist 

them in determining the best option for repayment. Our fiscal year 

2014 draft rate, which was released a couple of weeks ago, came 

in at 11.7 percent as a result of these increased efforts. 

Since my time is limited, you will find that my full remarks provide more detail and context regarding the student challenges with 

financial aid. 

In conclusion, I have seen the complexity of the student aid process increase greatly over the past 25 years. The entire process from 

application to repayment has become an intricate puzzle that only 

a seasoned professional can navigate and understand. 

There are numerous opportunities for improvement, simplification, and consolidation. It is my hope that today’s testimony will 

help you understand the challenges that students face as they attempt to work through the process. 

Thank you for your time and attention. 

[The statement of Ms. Soucier follows:] 

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10 

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Insert offset folio 1 here 24582.001

Testimony of JoEIIen Saucier 

Executive Director of Financial Aid 

Houston Community College System 

Presented to the 

U.S. House of Representatives 

Committee on Education and the Workforce 

Subcommittee on Higher Education and Workforce Development 

Improving Federal Student Aid to Better Meet the Needs of Students 

March 21,2017 
11 

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Insert offset folio 2 here 24582.002

Chairman Guthrie, Ranking Member Davis, and members of the Subcommittee on Higher 

Education and Workforce Development: 

Good morning. Thank you for inviting me to testify today. 

I am honored and proud to provide this testimony. 

I have been a financial aid administrator for the past 29 years and I am very passionate about 

the work I do and the services I provide to current and prospective students. I obtained my first 

financial aid director position in 1992, at age 24, and have held financial aid leadership positions 

at a proprietary college, two private universities, and two large community colleges since. I have 

been a member of the New Hampshire, Massachusetts, Florida, and Texas Associations as well 

as a member of the National Association of Student Financial Aid Administrators since 1990. I 

received a Citation of Appreciation award from the New York association in 2015 for my work 

with professional development. I have served on a number of NASFAA task forces, including 

the innovative learning methods and one grant, one loan. I have presented on a number of 

financial aid topics at NASFAA annual conferences and numerous state conferences over the 

years. My current institution, Houston Community College, serves approximately 40,000 aid 

recipients each year of which over 30,000 receive a Federal Pell Grant. 

When I entered college in 1986, I was a first generation student coming from a very low income, 

single parent household. If it wasn't for financial aid, college would not have been an option and 

I would not be where I am today. I personally understand how frightening the financial aid 

process can be for students. 

My testimony will identify some of the current complexities and resulting challenges that exist 

within the federal student aid system in hopes that we can move toward simplifying and 

streamlining the entire lifecycle of the financial aid process. I offer this testimony within the 

context of the window for change that the Higher Education Act presents, and I do so in the 

spirit of making the process more accessible and understandable for our nation's neediest 

students. 

Paying for college is inherently complicated. The varying types of institutions, student 

demographics, and reasons for pursuing a postsecondary education, combined with the multiple 

funding streams for students and parents all work against simplicity in the student aid programs 

and cause a great deal of confusion for our students and families. 

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The challenges that students face with the current financial aid system can be categorized into 

four key areas: 

1. The federal application process; 

2. Consumer information; 

3. The student aid programs; and 

4. Student loan repayment. 

#1: The Federal Application Process 

The discussion around financial aid simplification often centers upon the number of questions 

that are on the Free Application for Federal Student Aid (FAFSA). While that number can be 

stunning, 83 questions for independent students and 126 for students who must report parental 

data, the advent of more advanced skip-logic has assisted with shortening the time it takes 

students to complete the online application. Today, our lowest income students can bypass 

many of the questions on the FAFSA. Historically, students would invest about an hour to 

complete the FAFSA application, but today it takes the average student less than 15 minutes to 

complete once they have successfully set up their FSA I D. Even less if they are eligible to 

import their tax information directly from the Internal Revenue Service (IRS) through their Data 

Retrieval Tool (DRT). 

In September of 2015, President Obama and Secretary Duncan announced via executive 

action, using their existing authority in HEA [Sec. 480(a)(1 )(B)], that beginning on October 1, 

2016, the federal application would use prior-prior year (PPY) income instead of prior year (PY) 

income. The change, supported by financial aid administrators, resulted in earlier availability of 

the application. faster delivery of aid to students, and reduced administrative burden for financial 

aid administrators. Students need this type of streamlining in all areas of the financial aid 

process. 

Moving to an early FAFSA was a great achievement, but we should not stop there. The use of 

PPY opens the door for further streamlining and simplification of the FAFSA, including greater 

collaboration between the IRS and the Department of Education (ED). Our students, especially 

low income students, do not understand the complexity of the financial aid application process 

leaving us practitioners and customer service professionals with the daunting task of explaining 

it to students. My heart breaks when I have to explain to a student that they cannot receive their 

aid due to regulatory requirements that they did not understand or were not aware of during the 

application and enrollment process. 

At Houston Community College, our communication plan consists of a robust set of short, 

succinct, and targeted messages. We have over 70 different email communications sent 

throughout the application and aid delivery processes. We employ 15 full-time and 10 part-time 

staff in our call center, have a detailed phone messaging system, over 50 staff covering 14 

physical financial aid offices, and a social media coordinator feeding financial aid messages 

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through the various social media platforms. Regardless of these immense efforts, our students 

are confused and frustrated. 

To help with the application process, a greater collaboration between the IRS and ED could 

result in a reduced number of questions having to be answered by the student and parent. The 

IRS DRT, with adequate system security measures in place to protect consumer privacy, could 

be expanded to include additional items from the federal tax return, giving schools and the 

federal government more information while at the same time reducing burden on students and 

families. 

Related to the form itself, the National Association of Student Financial Aid Administrators 

(NASFAA) has developed a financial aid application model that sends student and family 

information through different pathways based on their predicted financial strength. For example, 

if a student indicates they are already a recipient of the federal means-tested programs such as 

food stamps or social security benefits, they go no further and are awarded the maximum Pell 

Grant. If a student demonstrates greater financial capability, they will be asked more detailed 

questions during the application process to accurately assess the family's financial strength. 

Such a model ensures that our lowest income students, those who find the federal form most 

daunting, have the shortest, most streamlined experience. It is models such as this that provide 

us with opportunities for further simplification of the federal application process. 

One of the most difficult parts of the application process for students isn't necessarily 

completing the federal application form, but all of the extra work students must do to verify the 

accuracy their reported data. For example, this year ED implemented a verification process for 

non-tax filers that increases burden to families and increases the amount of time it takes for 

students to receive an award notification. 

Here I offer an example of how this plays out at my institution. Houston Community College 

received over 80,000 federal applications during 2015-2016: 

38,600 were selected for verification by the Central Processing System 

o 48% of our students needed to provide additional information before we could 

process their application 

o 18,100 students reported that they "Will Not File" taxes and were Pell Eligible, 

these are our lowest income students 

In addition, 13,700 applications failed the federal database matches and students had to 

provide additional documentation to meet the general eligibility requirements. 

For the 2017-2018 processing year, these 18,100 students who indicated they will not file taxes 

will have to request additional information from the IRS before we can proceed with their 

application. It would be much more efficient if the IRS DRT could confirm the non-tax filing 

status during the application process, thereby reducing burden on both the students and the aid 

administrators and, eliminating delays in processing. 

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We practitioners believe that a more robust IRS DRT, along with the potential of collecting data 

electronically from other federal databases, would allow for an application process that is 

tailored to student and family financial conditions and would reduce the need for schools to 

constantly verify data submitted by students. The current application process has mechanisms 

in place that can cause a student to be selected for verification after they have already received 

aid for the year or after they have completed attendance for the year. If a student does not or 

cannot comply with late institutional requests for information, they are at risk of losing aid 

already received or losing future aid eligibility due to owing funds back to the federal 

government. This system does not promote student persistence and program completion. 

Another example of a barrier to college enrollment during the application process is the 

requirement for students to be registered for selective service. This requirement has been 

around for a long time. At Houston Community College, we have a number of students who fail 

the selective service data base match and are required to obtain a letter from selective service 

and submit the letter to us along with documentation and explanation as to why they did not 

register with selective service when required. The aid administrator, in turn, has to make a 

determination, or professional judgment, as to whether the student should qualify for aid. In my 

opinion, it should never be our intention to deny our citizens the ability to improve their quality of 

life. However, some institutions, or even administrators within the same college, will deny the 

student aid eligibility while others will approve the student and process federal aid. This 

particular requirement causes confusion and frustration for students, creates barriers, and 

causes inequities among institutions and students. The purpose of the selective service 

eligibility requirement, along with other burdensome requirements for students (e.g. drug sale 

and possession), should be closely examined. 

#2: Consumer Information 

The upcoming reauthorization provides a much-needed opportunity to focus on streamlining the 

consumer information that students and families receive. The massive amounts of consumer 

information that schools are required to provide leaves students feeling overwhelmed and 

unable to parse out the most important pieces. This deluge of information is a result of 

additional requirements being added with no apparent review of existing disclosures or eye 

toward streamlining. 

There are over 65 consumer information topics that appear in over 140 different regulations. 

Schools must deliver this information to both prospective and current students, either on paper 

or electronically, during the application and enrollment process. These disclosures are provided 

at a time when students are completing the variety of steps required to accomplish enrolling at 

the institution, obtaining financial assistance through numerous different funding sources, 

selecting classes, securing housing, getting books and supplies, and--of course--preparing for 

academic coursework, among much more. Each individual process comes with a plethora of 

information and disclosures. Accessing higher education for many students and families is an 

overwhelming and frustrating experience. 

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At Houston Community College, over 31% of our credit students are first generation. These 

families have no experience with attending college, and the students truly do not understand the 

incredible amount of information being provided by the schools. Students and families struggle 

trying to decipher the difference between messaging that requires action versus messages for 

information purposes only. 

I believe it would benefit students and families if Congress could conduct a thorough review of 

all existing consumer information requirements to identify those that could be streamlined, are 

duplicated, or are no longer applicable. The past five years have seen a slew of new consumer 

information requirements such as the College Scorecard, the financial aid Shopping Sheet, 

College Cost Comparison Worksheet, Gainful Employment, and many more. All of which were 

designed to help students and families and, to my knowledge, none of which were ever tested 

beforehand by that population. Yet, from a school's standpoint, I can't say that I've seen a 

significant increase in student awareness from these new requirements, even though schools 

have gone through significant efforts to remain in compliance with the regulations. What we 

have experienced is greater confusion and frustration from students and families. 

Administrators throughout the Houston Community College System spend many hours tracking, 

collecting, reporting and disclosing information. The various reporting and disclosure 

requirements have different deadlines, disclosure methods, sources from which the information 

is obtained, and disclosure recipients. In early March, for example, Houston Community College 

sent out 306,000 communications to faculty, staff and students for one of the consumer 

information disclosure requirements. A week later, 25,000 of the emails were opened (8%) and 

only 516 people (less than .5%) actually clicked on the report itself. The offices or administrators 

responsible for complying with the consumer information requirements are often unclear, and 

schools spend hours of staff time trying to develop mechanisms to comply. Many hours are 

spent by information technology and institutional research staff to generate timely and accurate 

information. I feel this time would be better spent working on initiatives for student success and 

program completion. 

The Gainful Employment (GE) requirements, for example, have created an incredible burden on 

schools and may jeopardize workforce programs that schools have worked closely with 

business and industry to develop. Schools are being required to label programs based on data 

that may not accurately reflect the quality or purpose of the program in terms of meeting the 

career goals of a student. Targeting programs that are designed to provide students with 

specific workforce skills is a mistake, in my opinion. Many low income students need financial 

aid funding for these workforce programs to secure good paying jobs. The current GE reporting 

and disclosure requirements do not take into consideration the enrollment and attendance 

behavior of our students, many who continue on for an associate's degree after completing the 

certificate program. 

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#3: The Federal Student Aid Programs 

The most important document for a student aid applicant is their award notification. This 

document informs the student aid applicant of the types and amounts of aid for which they may 

qualify. I use "may" because each program has different eligibility requirements and, based on 

student behavior and enrollment choices, the student may or may not receive those funds. 

There are a number of different grant, loan, and work programs that a student may see on an 

award notification and each has its own criteria and requirements. Some of the programs 

require additional action to be taken or paperwork that must be completed before the funding is 

made available to the student All of this is confusing to the student and tends to change from 

one year to the next making it nearly impossible for a family to plan for the student's entire 

college educational costs. 

Last year, I served on a National Association for Student Aid Administrators task force called 

"one grant, one loan." This concept could be a step in the right direction in terms of simplifying 

the types of aid available to a student as long as it is done in a meaningful way and 

policymakers recognize that a student's financial aid award letter may never be as simple as 

one grant, one loan, and one work program. Existing state, local, and institutional grant and loan 

programs will continue to appear on a student's award letter. At Houston Community College, a 

student could receive, along with their federal awards, a Texas Public Education Grant (TPEG), 

a Texas Education Opportunity Grant {TEOG), a Texas Work-Study award, and multiple 

institutional scholarships. 

As Congress begins to examine the various programs, such as the campus-based aid 

programs, the flexibility those programs offer when allocating funds to students based on unique 

campus needs should be considered. In addition to flexibility, campus-based programs 

represent a shared partnership in which the federal government, schools, and students all have 

"skin-in-the-game." For example, Houston Community College has a team of financial coaches 

located in the financial aid office that work with students individually, and in groups, on personal 

budgeting, understanding debt and credit scores, accessing community resources, sound 

spending, the importance of saving, and more. The campus-based programs (SEOG Grant and 

Federal Work-study) along with institutional and community programs, provide the financial 

coaches with resources to assist individual students so they can persist and complete their 

academic program. In my opinion, maintaining the strongest elements of the current programs is 

important. 

At Houston Community College, over 1,300 students receive an average annual FSEOG award 

of $800. Many of these students would not be able to attend without that vital funding or who 

would incur greater loan debt to obtain their college degree. I'm confident that even in a one 

grant, one loan, one campus-based model, provisions could be implemented that would retain 

local flexibility and institutional "skin-in-the-game." 

Traditionally, work-study has had a great deal of bipartisan goodwill, and as a practitioner, I 

cannot stress enough the importance of this valuable program in which the federal government, 

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schools, and students all have "skin-in-the-game." In a Student Loan Report1 released fall of 

2016, Texas was ranked as the fourth highest state in terms of federal work-study spending. 

Houston Community College was ranked fifth in Texas for employing over 700 students who 

earned over 4 million dollars. Houston Community College employs hundreds of students into 

work-study jobs who gain valuable job skills and have greater success with persistence and 

program completion. 

The Pell Grant Program is probably the most important aid program for our students at Houston 

Community College. 75% of our students on aid receive a Pell Grant and 67% receive a full Pel! 

Grant. Preserving the Pel! Grant program is of great importance to a large number of students 

who attend community colleges. The idea of creating greater flexibility in the Pell Grant program 

is strongly supported by the financial aid community. The loss of year-round Pell Grants a few 

years back had a negative impact on our full-time students and increased time to completion as 

some students were no longer able to attend our summer session. The original year-round Pel! 

Grant requirements were cumbersome to administer and took us schools time to organize and 

administer. However, just as we were beginning to figure it out and make it work, it was 

eliminated. Offering Pell Grant funding year round allows students to stay enrolled continuously, 

get out of school faster than they normally would, and reduce their costs and debt burdens. 

One idea I have heard mentioned is to provide students with a total amount of Pell Grant dollars 

available to them via a "Pel! Well" of funds that a student could draw down over the course of 

their enrollment. This would work well at Houston Community College because our students 

exhibit non-traditional and unusual enrollment patterns. Having a more flexible structure with the 

Pell Grant would be a benefit to students attending school with a more non-traditional format. 

Simplification of the loan programs is greatly needed. Obtaining student loan funding for 

students is the most stressful and complicated process of all the available programs. The 

concept of subsidized and unsubsidized loans is not understood by our students and families, 

many of which have never borrowed a loan. When they accept the two loans, they have no idea 

that one is going to cost them while they attend college and the other will be interest free. 

Students also do not understand why the amount they are offered is not the amount they 

receive due to the origination fees. Eliminating confusing origination fees would have a positive 

impact on students and speed up the processing of loans for schools. 

Related to loans, schools need greater authority to help borrowers stay within reasonable levels 

of debt. I have seen students enrolled in programs that result in lower paying jobs, such as 

teaching, borrow in excess of $100,000 simply because they "could" and not necessarily 

because they needed the funds to pay for their education. However, on the flip side, I have seen 

students who are enrolled in high cost programs, such as law or medicine, rely heavily on 

additional loan programs such as the Parent PLUS or Graduate PLUS. Students would benefit 

long-term from schools having the ability to use a holistic view when determining how much loan 

debt is reasonable to complete an educational program. 

' "Federal Work-Study Program: A National and State Analysis," Student Loan Report. 

https://studentloans.netlfederal-work-study-national-state-analysis/ 

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The complexity of the current student loan programs makes it difficult for students to understand 

eligibility requirements and available loan amounts. Reauthorization is a perfect time to examine 

annual and aggregate limits based on grade level, dependency status, program of study, and 

attendance in final semester/term of a program and determining the need to retain such 

requirements. Loan origination fees, in its current structure, and the Subsidized Usage Loan 

Limits (SULA) requirements cause schools the greatest delay in the delivery of loan funds to 

students. Simplifying and standardizing eligibility requirements and determining the need to 

retain "SULA" requirements and origination fees could result in significant benefits to students 

and improve the communication and delivery of loan funding to students. 

#4: Student Loan Repayment 

Reauthorization provides an opportunity to make the repayment process more understandable 

and easier for students. According to the Congressional Research Service (CRS), there are 

over 50 loan forgiveness and loan repayment programs currently authorized, with at least 30 

operational as of October 1, 2015.2 Of these, there are nine widely available repayment plans. 

Understandably, this creates a great deal of perplexity for borrowers and those who counsel 

them. 

Similar to the growth in consumer information, repayment plans have increased without the 

reduction or streamlining of those that already exist. While well-intentioned, the introduction of 

new plans and associated new eligibility criteria has turned the repayment process into a 

tangled web. Simplifying the repayment programs into just one or two plans and providing 

schools with the flexibility to increase student loan counseling and education efforts will help 

prevent students from going into default on their student loans. Having only one income-driven 

repayment plan and one standard plan would be beneficial to students and schools. 

At Houston Community College, over 18,000 students borrow from the federal student loan 

programs each year; however, we are unable to require students to attend and complete annual 

loan counseling, making it difficult to educate and communicate student loan responsibilities, 

requirements, and repayment options. Financial aid offices would appreciate the authority to 

mandate additional loan counseling based on the needs of the institution and student borrowers. 

Many of our students benefit from income-driven repayment options but are unable to navigate 

through the many programs to determine their best option. Houston Community College has 

been challenged with an 18%- 22% default rate over the past 5 years. We contracted with a 

third-party agency a year ago to increase outreach to students and assist them in determining 

the best option for repayment. The goal is to eliminate the sticker shock students experience 

when they finish school and get their first 1 0-year monthly loan amount. Our draft FY 2014 

cohort default rate, which was released a couple of weeks ago, came in at 11. 7%. 

2 "Federal Student Loan Forgiveness and Repayment Programs," Congressional Research Service. 

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Houston Community College also signed onto the White House Student Debt Challenge last 

year and committed our team of financial coaches to perform workshops and outreach activities 

to educate faculty, staff, students, and community organizations about the benefits of incomedriven repayment options and public service loan forgiveness (PSLF). We know that the added 

outreach and innovative initiatives provided to assist borrowers with their many options have 

had an impact on our student borrowers, which is demonstrated through a significant decrease 

in our cohort default rate. 

Conclusion 

I have seen the complexity of the student application process and the administration of federal 

financial aid programs increase greatly over the past 25 years. Although the Free Application for 

Federal Student Aid itself has been streamlined and improved incredibly from when I first 

applied for financial aid in 1986, the entire process from application to repayment has become 

an intricate puzzle that only a seasoned professional, like myself, can navigate and understand. 

There are numerous opportunities for improvement, simplification, and consolidation. It is my 

hope that today's testimony will help you to understand the challenges our students are faced 

as they attempt to work through the process. Done in a deliberate, careful way, moving toward 

simplification and streamlining of the entire system will have a positive impact on students, 

families, financial aid administrators, educators, and the community. 

We all know that there are still a very large number of students, young and old, that can benefit 

from a higher education but may not pursue the opportunities due to fear and frustration. This 

reauthorization of the higher education act provides us all with an opportunity to eliminate those 

fears and frustrations and improve a very complex system. 

Thank you for your time and attention. 

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Chairman GUTHRIE. Thank you. I now recognize Ms. Conklin for 

5 minutes for your opening statement. 

TESTIMONY OF KRISTIN CONKLIN, FOUNDING PARTNER, HCM 

STRATEGISTS, WASHINGTON, D.C. 

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

Davis, and members of the subcommittee for this opportunity. 

My name is Kristin Conklin, and I am the first. I’m the first in 

my family to earn a college degree, the first to create jobs and start 

a business. I was able to graduate college in 4 years with a Pell 

grant and State financial aid without any debt. 

That might not be possible for today’s students. For several 

years, I have been part of a chorus of experts who have called for 

radical simplification of the Federal financial aid program. Three 

key reforms could improve its effectiveness and efficiency. 

First, streamline all Federal financial aid programs into one 

grant program, and all loan programs into one loan program. With 

one grant, we can consolidate the campus-based programs into a 

Pell grant that would be easier to obtain and better target with 

common sense needs analysis changes. 

With one loan program, we’d create one set of annual and aggregate loan limits for undergraduates and one set for graduates. We 

would offer uniform borrower benefits in one income-based repayment program. Loan eligibility would end at new sensible credit 

hour limits, such as 150 percent of program length. 

With one grant, one loan, today’s students can easily find how 

much aid they would be eligible for with a simple look-up table. 

Just as easily, students could get instant notification on their 

phones what their Federal awards would be, and what monthly repayment would look like. 

Advocates and academics have been calling for this kind of transparency and early notification for a decade. 

Second, remove the barriers to on-time completion that are built 

into a Federal loan program. The single most effective way to make 

college more affordable is to reduce the amount of time it takes to 

earn the credential, but here, the Federal Government is setting a 

too low standard backed by its $158 billion investment, and 47 

States follow, which means the simple message we send students 

today is you all are on track to graduate in 5 years for a bachelor’s 

degree. 

Why is this? Policy is capping our awards at 12 credit hours, 

which is even more, even for students who like to take more. The 

maximum amount of the grants and loan should be pegged to students taking 15 credit hours a term or 30 credit hours a year. Students should also have access to grant aid throughout the summer. 

Third, I think it’s important to include tax credits in your financial aid eligibility. Now, this is well beyond the jurisdiction of this 

committee. When this Congress considers tax reform, I encourage 

you to consolidate the multiple household based postsecondary benefits into a single refundable lifelong learning tax credit. 

These three simple recommendations are more than just studentcentered, they are evidence-based. Research says that student aid 

works best when it’s targeted, appropriately timed, and clearly 

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21 

communicated, coordinated with other resources, and designed to 

provide both incentives and support. 

Congress can look to States to see how simplification can make 

a difference for today’s students. Indiana, for instance, offers larger 

need-based grants to students who take 30 credit hours a year or 

more, and requires its 21st Century Scholars’ students to take a 

true full-time course load to receive their maximum grants. 

We have early encouraging results out of Indiana. Students receiving this financial aid are taking 30-plus credit hours their sophomore year at higher rates than their peers, and improvements are 

particularly stronger for the 2-year sector. 

Minnesota consolidates its Federal and State aid, and it gives 

large awards to students who take true full-time course loads. As 

a result, students in Minnesota, two-thirds of them, of the full-time 

students, are now on track to graduate in 4 years with a bachelor’s 

degree or 2 years for an associate’s degree. 

In California, Pell grants act as a simple, generous Cal grant. 

This contributes to the University of California’s campuses enrolling a larger percentage of Pell grant students than any other flagship in the country. 

The Nation’s Federal financial aid system was built for another 

era. In 1965, when the first significant Federal financial aid program began, 23 percent of Americans had a college degree, and 

that attainment level was sufficient for a vibrant middle class. 

That economy and those times are no more. 

By 2020, 65 percent of our jobs will require some form of postsecondary education beyond high school. A simplified Federal financial 

aid system is part of the solution for our Nation. That means many 

more skilled graduates, a stronger middle class, and more opportunities. 

Thank you, and I welcome your questions. 

[The statement of Ms. Conklin follows:] 

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U.S. House of Representatives 

Subcommittee on Higher Education and Workforce Training 

Subcommittee Hearing: 

Improving Federal Student Aid to Better Meet the Needs of Students 

March 21, 2017 

Written Statement of: 

Kristin D. Conklin 

Founding Partner, HCM Strategists 

Chairman Guthrie, Rep. Davis and Members of the Subcommittee, thank you for the 

opportunity to appear before you today. As we consider the question of how to 

improve federal student aid to better meet the needs of students, my testimony 

provides information about: 

The need to serve more students, better, in the federal financial aid system; 

Recommendations for simplifying further the needs analysis, application and 

renewal processes for federal student aid; 

Recommendations for consolidating the multiple federal grant and loan 

programs into a single one-grant, one-loan system, with on-time completion 

incentives and options for projected savings; and 

Public opinion research for these simplification proposals. 

My testimony today benefits from the collective work of experts and colleagues who 

met between July 2012 and February 2013.' Supported by a grant from the Bill & 

Melinda Gates Foundation, HCM led an expert technical panel focused on offering a 

cohesive set of options that could put student outcomes at the center of the federal 

student aid programs, while putting critical aid programs on a more sustainable fiscal 

path." 

The Need to Serve More Students, Better, in the Federal Student Aid 

Program 

The nation's financial aid system was built for a different age, when access and 

choice were sufficient programmatic objectives. In 1965, when the first significant 

federal financial aid program began, 23 percent of Americans had a college degree. 

That attainment level was sufficient to support a vibrant middle class. That economy 

and those times are no more. Today, the economy places a premium on 

postsecondary credentials and the skills those degrees represent. By 2020, 65 

percent of all jobs will require some type of postsecondary education.iii 

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Unfortunately, nearly half of all students start college but fail to earn any credential 

within six years; the outcomes are much worse for African Americans and 

Hispanics'v. 

Dropout rates of this magnitude were considered a crisis 15 years ago when the 

nation looked at the rate of high school completion. One reason so many students 

fail to complete is that our public policies and financing are built on assumptions that 

no longer hold true. Today's students are older, they juggle work and family while 

attending school part time, and 47 percent support themselves financially, with 42 

percent living in poverty. v 

A simplified federal financial aid system needs to be seen as part of the solution for a 

nation that needs many more skilled graduates, a stronger middle class and more 

opportunity. Each year, the federal government's investment in student financial aid 

supports nearly $184.1 billion in grant, loan and work-study assistance to more than 

20 million students and their families.v' Investments in student aid are more than 

double the spending for any other federal educational program, including Title I of 

the Elementary and Secondary Education Act (ESEA) and the Individuals with 

Disabilities in Education Act programs for K-12 schools. vii Yet for all of the money it 

invests, the U.S. government has rarely, if ever, conceived of financial aid as a 

potential tool to encourage student success in college. It provides money to (mostly) 

needy students and hopes for the best. 

In size and scope, student financial aid is more important than ever. Nearly 33 

percent of all undergraduates receive a Pell Grant. Nine years ago-before significant 

increases in the Pell program-revenues from Pell Grants paid almost 20 cents on 

every $1 received by a college or university in this country. Reliance on Pell funds 

ranged from 37.7 percent at two-year public colleges to 63 percent at four-year, forprofit private colleges. viii 

Since 1965, federal policymakers have layered new grant, tax, loan and repayment 

programs on top of each subsequent reauthorization, budget reconciliation. and even 

emergency spending bill, without stepping back to assess how the pieces work 

together to accomplish the outcomes currently needed from the programs. 

Application processes are complex and difficult to understand, particularly for the 

families who stand to gain the most. Policy discussions traditionally have centered on 

what it would take to attract and keep private lenders in the program. Student 

subsidies have been more a matter for program budget development. Even today, 

loan program subsidies are poorly targeted and cost taxpayers more than necessary 

to help students manage their repayment obligations and maintain a reasonable debt 

burden. Eligibility rules don't encourage students to attend full time and finish 

promptly, and in fact may do the opposite. Participating institutions are held to low 

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eligibility standards and only rarely lose access to federal aid.IXThat continued access 

provides little incentive to contain tuition prices; meanwhile, existing statutes and 

regulations tend to stunt new approaches and bar program participation by 

innovative postsecondary education providers. 

Recommendations for Simplifying Further the Application and Renewal 

Processes for Federal Student Aid 

The need analysis and application process would be significantly simplified through a 

three-tiered FAFSA (Free Application for Federal Student Aid) filing system. 

Applicants in this means-tested program could verify their participation across 

agencies and access maximum benefits. For most applicants, data sharing with the 

Internal Revenue Service would pre-fill their application by allowing use of their tax 

information from two prior years. Students and families with more complex financial 

situations would submit additional IRS schedules, allowing for aid to be better 

targeted. A simple app based on income and family size would let students plan early 

and choose wisely. The need analysis would be based mainly on adjusted gross 

income (AGI) and family size. It would no longer provide additional aid for families 

with multiple members enrolled at one point. Together, those changes would 

encourage more low-income students to file a simplified FAFSA, while targeting 

federal aid dollars to the neediest students, as reflected in Brookings and the Urban 

Institute estimates. 

Rather than producing a specific value for each applicant's expected contribution, 

which would establish the grant amount for that student for the academic year, the 

simplified formula would produce the actual grant amount for that student were she 

enrolled full time for a full academic year. That contrasts with current practice in 

which the applicant is not immediately notified of the grant amount for which she is 

eligible, only that she is eligible for a grant based on the level of her expected family 

contribution (EFC). 

The simplified formula would build on the partnership between the IRS and FSA that 

allows many FAFSA applicants to retrieve individual tax return income and other 

financial information directly from the IRS as part of the federal aid application 

process. 

Consolidating the Multiple Federal Grant and Loan Programs into One Grant, 

One Loan 

One Grant Program 

The redesigned grant program would merge all existing federal postsecondary grant 

programs into the Pel! Grant program. The Pel! program would continue to be 

focused on the lowest-income students and maintain current initial eligibility 

standards. Pel! Grants could then serve more of today's students, provide them 

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assistance year-round and offer flexibility in disbursement and other rules so 

students juggling work and children could access flexible, accelerated learning 

options and earn credentials. 

The one grant program should remove the barriers to on-time completion. Federal 

law defines full-time enrollment for financial aid as 12 credit hours, which is less than 

what is generally needed to complete a credential on time. Financial aid recipients 

must demonstrate "satisfactory academic progress" (SAP) toward degree/program 

completion beyond the initial year of aid receipt, but the federal government does 

not mandate specific standards. 

With respect to determining a student's enrollment intensity, regulations governing 

Title IV defer to institutional policy, but with one overarching standard: A student 

must be enrolled for a minimum of 12 credit hours (or equivalent) to be eligible for a 

financial aid award available to full-time students. Assuming a 120-credit standard 

for a bachelor's degree, federal policy does not provide an incentive for students to 

complete a bachelor's program within four years. At 12 credit hours per semester, it 

would take a student five years, assuming all classes were passed. While the federal 

standard is derived from the statutory definition of an academic year, it nonetheless 

provides no incentive for students to complete their program of study promptly-or 

for colleges to minimize credit creep in programs, offer core courses when needed or 

put structured degree pathways in place. 

All but three states-Illinois, Minnesota and Washington-similarly cap their 

foundational need-based state financial aid awards at 12 credit hours. Schools 

establish their own SAP standards within rather broad federal guidelines. 

Promoting more intensive enrollment can improve not only time to degree but also 

the odds of completion. To encourage on-time progression and completion, the 

redesigned Pel! Grant program should be based on the intensity of students' 

enrollment, with the maximum grant to first-time students set on the basis of at 

least 15 credits in each of the first two terms. Afterward, the student could receive 

the maximum by enrolling in at least 15 credits per term, or by having earned 

sufficient credit to demonstrate a clear path to on-time completion. For example, a 

student who earned 33 credits in her first year could be awarded a maximum grant if 

she enrolled in only 12 semester hours in one term her second year, as long as she 

earned at least 27 credits in that second year. Students could use summer and other 

nonstandard terms to increase credits and move toward graduation. 

Indiana has added completion expectations in the form of incentives to its primary 

need-based aid grant programs, the Frank O'Bannon Grant program and the 21st 

Century Scholars program. The Frank O'Bannon Grant program allows students to 

earn additional financial aid for completing 30 credits each year in college, 

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maintaining a cumulative GPA of at least 3.0, earning an associate degree before 

enrolling in a bachelor degree program, or completing at least 39 or the equivalent 

credit hours by the end of the first year and 78 or the equivalent credit hours by the 

end of the second year in college. Recipients of Indiana's 21'' Century Scholars are 

required to maintain this true full-time course load in order to maintain the 

maximum grant. 

The first cohort subject to the reforms has produced some initial encouraging results, 

including: 

Students receiving state financial aid are taking 30+ credits their sophomore 

year at higher rates compared with their peers not subject to reforms in both 

four-year and two-year institutions; 

At four-year institutions, roughly three-quarters of the 21 '' Century Scholars 

and two-thirds of Frank O'Bannon recipients met the 30-credit mark; 

At two-year institutions, nearly half the Century Scholars and onequarter of Frank O'Bannon recipients met the 30-credit mark; and 

Students at both four-year and two-year campuses demonstrated significant 

gains in meeting the 30-credit-benchmark, but improvement was greater in 

the two-year sector.x 

The federal government can adopt incentives in the single grant program that are 

similar to Indiana's, In 2012, the Brookings Institution and Urban Institute 

projected for HCM the 10-year savings from the changes, collectively, to a single 

grant program. These savings, estimated between $86 billion and $120 billion, 

assuming current grant maximums. Those savings could be reinvested by 

offering a larger financial incentive for increased course-taking.x' For example, 

the cost of expanding the maximum grant amount to $7,000, coupled with the 

other single-grant recommendations contained herein, can be done on a 

revenue-neutral basis. 

These figures illustrate what grant amounts would look like at different intensity 

levels for different grant amounts using our current application system: 

With Increased Grant Amounts: $7,000 Maximum and $700 

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One Loan Program 

The redesigned federal student loan program would collapse the numerous benefits, 

rules and restrictions under the current program into a single "foundational" loan 

program, The one loan program would end the 10 different annual and aggregate 

borrowing limits in the current program and end the various distinctions among the 

subsidized Stafford, unsubsidized Stafford and Grad PLUS loans, and it would end the 

Grad PLUS, Parent PLUS and Perkins Loan programs. The single program would set 

new borrowing limits: one for undergraduate students and one for graduate 

students. All borrowers would have to repay under a hybrid version of the two 

existing income-based repayment (IBR) programs, This one-loan system would 

eliminate much borrower confusion, thus helping students focus on managing college 

costs, repaying with interest based on actual income, and considering examples of 

average incomes for their careers when making appropriate borrowing choices, 

Collectively, a single loan program as proposed here would save nearly $38 billion 

over 10 years. 

More Details from HCM Strategists' technical panel of experts: A Reformed, Default 

Income-Based Repayment Program 

Income-based repayment could mitigate interest rate risk for both borrowers and 

taxpayers. A borrower's monthly payment would not be based on any particular 

interest rate or outstanding principal balance on the loan; would be based solely on 

his or her income. The interest rate would serve only to determine the speed at 

which the loan balance was reduced or retired given a certain level of income. Lower 

incomes would have the same effect as higher· interest rates; the reduction in 

outstanding principal decelerates, Borrowers may pay a bit longer, but they would 

never pay longer than 20 years (25 years for high-debt borrowers), thus dampening 

interest rate risk, particularly for struggling borrowers. On the other hand, borrowers 

with higher incomes would pay back their loans faster under the new income-based 

plan than they do currently, which would mitigate the risk to taxpayers that the 

repayment program is overly generous, In essence, the program would be much 

more self-correcting than the current income-based repayment program, for both 

borrowers and taxpayers. 

The new program would not include any special status features such as in-school 

interest subsidies, or routine deferment and forbearance options, but it would still 

allow borrowers to forgo monthly payments while enrolled at least half-time, The 

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existing suite of benefits is complicated for borrowers to understand, and it requires 

considerable time and effort for loan servicers and institutions to administer and 

track. Instead, borrowers would be charged interest while in school. The Joss of the 

deferment and forbearance benefits would be offset by other new benefits. (Incomebased repayment allows borrowers to exempt 150 percent of the federal poverty 

guidelines from their income, thereby providing a form of indefinite deferment or 

forbearance for borrowers with no or low incomes.) The Congressional Budget Office 

estimates that provision would save more than $40 billion over the 10-year budget 

window.xiv 

A borrower's monthly payment would generally be calculated the same way as the 

current income-based repayment program in the federal loan system, with several 

modifications. Under the current plan, a borrower pays 10 percent of his adjusted 

gross income toward his Joan annually (divided by 12 months) after deducting from 

his income 150 percent of the federal poverty level based on household size. In other 

words, discretionary income is defined as income in excess of the poverty levelbased calculation, and the borrower pays 10 percent of that amount. Today, that 

deduction for an individual is about $16,500. However, the borrower's monthly 

payments are also subject to a maximum; they cannot exceed the amount the 

borrower would pay under a straight-line 10-year amortization plan (the "standard 

repayment plan"), based on the borrower's loan balance at the time he entered 

repayment in the IBR plan. That cap makes the current program regressive and 

allocates benefits to borrowers with higher income in later years. The new IBR 

suggested here ends the cap and the regressivity it currently creates. 

The new income-based repayment program would continue the income deduction 

based on federal poverty guidelines and maintain the repayment rate at 10 percent 

of discretionary income, but only for borrowers with incomes below 300 percent of 

the poverty level appropriate to family size. Borrowers earning more would pay at a 

rate of 15 percent of discretionary income. That is similar to the structure of the 

federal income tax: A portion of the taxpayer's income is exempt from taxation-i.e., 

a standard deduction-and income above that amount is taxed at progressively 

higher rates. However, in the case of the new IBR plan, there would be just two 

rates, and borrowers would be subject to one or the other, minus the exemption.xv 

Borrowers could always opt to pay more per month if they chose. Unpaid interest 

that was due would accrue, but it would be added to the principal (negative 

amortization) only after a borrower's debt-to-income ratio fell below a certain point, 

just like the existing program. 

Borrowers who are married, but file separate federal income tax returns, would have 

to include combined income in the IBR calculation-though the poverty-level 

deduction would be adjusted to account for household size per the federal guidelines. 

7 
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In cases where both spouses were repaying student loans, each could base his or her 

payment on half of the combined household income. 

More Details from HCM's technical panel of experts: New Loan Limits 

Under the new approach, the current loan system would be replaced by one loan 

type with an annual limit of $8,750 for all undergraduate borrowers and an 

aggregate limit of $35,000-i.e., four years of the annual maximum. Graduate and 

professional students would be subject to an annual limit of $30,000 and an 

aggregate of $90,000. The total maximum undergraduate plus graduate aggregate 

limit would therefore be $125,000. 

Students would be limited to borrowing for the credit hour equivalent of 150 percent 

of program length to reduce the number of unneeded courses taken for program 

completion. The limit would prevent credit creep and encourage institutions and 

students to focus on clear paths to graduation. 

The new loan program would have the same rules regarding maximum award 

eligibility as the redesigned grant in terms of enrollment intensity. Fifteen credits per 

semester would be considered full time. First-time students would receive the 

maximum loan by taking at least 15 credits in both semesters their first year. 

Subsequently, students must enroll in 15 or more credits per term, or have enough 

credits to be on a path to on-time completion. For students enrolled less than full 

time, loans would be issued on a pro-rata basis. As in the current system, students 

enrolled less than half-time per term would be ineligible for federal loans. Note that 

those limits are higher than under the current program in some cases (Stafford loans 

for dependent undergraduates) but lower for others (independent undergraduates, 

and graduate students because of the elimination of Grad PLUS loans). 

Parent PLUS loans would be eliminated. The higher loan limits for dependent 

undergraduates suggested here would restore some of the borrowing authority for 

students whose parents would have used the Parent PLUS program. Many parents 

are also good candidates for obtaining private credit. For students pursuing highvalue (high tuition, strong labor market outcomes) undergraduate and graduate 

programs, new private financing options such as income share agreements can be 

used, with incentives for financing agreements for low-asset borrowers, including 

African Americans, Hispanics and Pell Grant students. 

Terminating Parent PLUS would help guard against imprudent borrowing and tuition 

inflation, given that it allowed parents to finance the entire cost of an education, 

regardless of the tuition. 

Graduate students would be eligible for lower limits than the current program 

because the Grad PLUS program would be eliminated. The annual and aggregate 

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limits, however, still would be higher than under the current Stafford limits for 

graduate students. In that regard, the program would end the unlimited borrowing 

feature of Grad PLUS but allow larger loans than Stafford. 

Public Opinion Research for these Simplification Proposals 

HCM Strategists, with Hart Research and the Winston Group, polled Americans in 

2012 to understand impressions of the postsecondary education system today, the 

appetite for changes to the system, and reactions to potential financial aid reform 

approaches aimed at helping address the college completion challenge. 

The research was conducted in two phases. First, exploratory qualitative research 

was conducted among various audiences, including Pelf-eligible students, parents of 

Pelf-eligible students, voters, Capitol Hill staffers and education policy leaders. That 

research then informed the design of quantitative research among engaged voters, 

African American parents and Hispanic parents. Key findings support the 

recommendations contained hereinxv': 

Completion of a credential should be the top priority for improving federal 

student aid policies. Engaged voters point to several goals as high priorities 

for reforming federal and state student financial aid programs, with increasing 

the number of students who earn a degree/credential (64 percent) at the top. 

They also put a high priority on making sure that college is affordable, holding 

students and colleges accountable, and providing both students and colleges 

with incentives to increase completion. African American and Hispanic parents 

rank all of these as priorities to some degree. Holding down government 

spending is not selected as a high priority for reforming financial aid among 

any audience. 

Large amounts of student debt-and debt with no degree-needs to be 

addressed. About four in five (79 percent) engaged voters say that 

individuals' amassing large amounts of student loan debt to pay for their 

college degrees or credentials happens a lot in the United States today, and it 

ranks in the top two or three biggest concerns (55 percent) among engaged 

voters. A lesser but still notable 50 percent of voters also say amassing large 

amounts of student loan debt without completing a degree or credential 

happens a lot, but they are half as likely to cite it as a top concern (25 

percent). 

Federal financial aid is the foundation for college affordability in America. Decisions 

today to simplify the federal financial aid programs and remove the barriers to ontime completion can pave the way for more states, communities, institutions and 

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employers to build upon this federal foundation and expand affordable pathways for 

students. 

'HCM's technical panel included Dr. Steven E. Brooks, North Carolina State Education 

Assistance Authority; Kevin Carey, New America Foundation; Kristin D. Conklin, HCM 

Strategists (chair); Jason Delisle, Federal Education Budget Project, New America 

Foundation; Dr. Tom Kane, Harvard University; Andrew Kelly, formerly with 

American Enterprise Institute (now the University of North Carolina System); Daniel 

Madzelan, retired, U.S. Department of Education, Office of Postsecondary Education 

(now with the American Council on Education); and Dr. Kim Rueben, Urban Institute 

and Urban-Brookings Tax Policy Center. HCM Strategists, a public policy and 

advocacy consulting firm specializing in health and education, led the development of 

this paper. HCM team members contributing to this project included Lauren Davies, 

Terrell Halaska, Dr. Kim Hunter Reed and Dr. Nate Johnson. Additional independent 

data and analyses and draft reviews were provided by the Urban-Brookings Tax 

Policy Center, Postsecondary Analytics, Hart Research Associates, the Winston 

Group, Dr. Sandy Baum, Dr. Sara Goldrick-Rab, Arthur Hauptman, Robert Kelchen, 

Dr. Michael McPherson, Travis Reindl, Kimrey W. Rhinehardt, Celia Simms, Bruce 

Vandal and Jane Wellman. 

ii The technical panel's charge and recommendations come from the consensus 

deliberations of the American Dream 2.0 coalition. Their final report can be found at 

ht:Jp~_I'L\'./>V. ilJll_~riC<JrJ d re::Q m z_~_Q,_ com. 

iii Carnevale, A. et al. (2013, June). "Recovery: Job Growth and Education 

Requirements Through 2020." Georgetown University's Center on Education and the 

Workforce. 

iv Shapiro, D., Dundar, A., Wakhungu, P.K., Yuan, X., Nathan, A. & Hwang, Y. (2016, 

November). Completing College: A National View of Student Attainment Rates Fall 

2010 Cohort (Signature Report No. 12). Herndon, VA: National Student 

Clearinghouse Research Center. 

v "Today's Student" (2015, September). The Lumina Foundation. 

httP~ :.f /V>JWW·IIJ rD i.IJ<J [QIJDQ a ti() n~:.9!.9[tgday~:~t1J.dfnt 

vi Baum, S. et al. (2016). "Trends in Student Aid 2016." The College Board. 

httRs:fLJ:r~o..Qgollgg_ebo<'Jr<:l.&r.g/s.t:ude.nt-aid/l}lgblights 

vii Delisle, J. and McCann, C. (2012). "How the Pell Grant Program Overtook PreK-12 

Educational Programs." 11/14/2012. EdMoney Watch Slog. Washington, D.C: New 

America Foundation. 

viii Radwin, D. et al. "2011-12 National Postsecondary Student Aid Study 

(NPSAS:12)." (2013, August). National Center for Education Statistics. 

ht!Q.s..Ji.n.\=e~,s:.<:JAQ.'d.fl_u b ~ ?9.1E_Q1.::l.1§5&clf 

ix Conklin, K. et al. (2015). "Doing Better for More Students: Putting Student 

Outcomes at the Center of Federal Financial Aid." HCM Strategists, LLC (7). 

x "Reforming Student Financial Aid to Increase College Completion" (2016, March). 

Indiana Commission for Higher Education (7). 

"Rowing Together" http:(/www.ecs.org(ecf.QO~t~Q lj1Jpjg_<J.Q~s.Lf::~$_E u n di n_g_J<.~por_t~_H CM.....L.Pdf 

xi Appendix: Tables 3 and 4: Savings will depend on additional take-up rate of 

students from simpler application. 

'''Table 3 - In practice the student would be able to calculate the grant amount 

using a formula that subtracts EFC from the Max grant and then multiplies by the 

intensity of enrollment. We much prefer our simplified system, which would calculate 

10 
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grant amounts directly based on AGI, number of people in household and course 

intensity. 

x'" Table 4- This policy is roughly equivalent to the 150 percent credit cap proposed 

for the single loan program. 

xiv Conklin, K. et al. (2015). "Doing Better for More Students: Putting Student 

Outcomes at the Center of Federal Financial Aid." HCM Strategists, LLC (16). 

xv Conklin, K. et al. (2015). "Doing Better for More Students: Putting Student 

Outcomes at the Center of Federal Financial Aid." HCM Strategists, LLC (17). 

xv' Hart Associates with David Winston and HCM Strategists, "College Is Worth It" at 

b_@_:lLJl~fll?Jr:9JegLsJ?,.C:.QJDJa n a I ys i s/4 6 2L 

11 
33 

Chairman GUTHRIE. Thank you for your testimony. Mrs. 

Copeland-Morgan, you have the floor, you can get me back on the 

Cats versus Bruins that is coming up this weekend. I am just kidding. You are recognized for 5 minutes to testify. 

TESTIMONY OF MRS. YOULONDA COPELAND-MORGAN, VICE 

PROVOST OF ENROLLMENT MANAGEMENT, UNIVERSITY OF 

CALIFORNIA, LOS ANGELES 

Mrs. COPELAND-MORGAN. Thank you, Chairman Guthrie, Ranking Member Davis, and members of the subcommittee for inviting 

me to appear before you today as you consider ways to strengthen 

Federal student aid to better meet the needs of students. 

My name is Youlonda Copeland-Morgan. I am the vice provost 

for enrollment management at the University of California, Los Angeles. My professional dedication to college affordability and access 

long preceded my time at UCLA, but I’m here today to share some 

of the successes we have had at the University of California, and 

make our recommendations to improve the Federal student aid system. 

UCLA is an academically prestigious institution, and has a consistently strong record of admitting, enrolling, and graduating lowincome students. In fact, all of the University of California’s 10 

campuses are equally committed to college affordability and access. 

UC’s core philosophy is to ensure that all eligible students can 

enroll at any of our campuses and to keep UC affordable. We have 

succeeded at this, as demonstrated through these facts. 

UC enrolls far more Pell grant recipients than any other top research university in the country. In 2013/2014, 40 percent of our 

undergraduates were Pell grant recipients compared to 22 percent 

at other comparable public universities. Forty-two percent of UC’s 

undergraduates are the first in their family to attend college. More 

than half of our California undergraduates pay no tuition. 

But enrolling low-income students is not enough. We need to see 

them graduate. In this respect, UC is also succeeding. UC’s Pell 

grant recipients’ 6-year graduation rates are nearly identical to 

those of their middle- and upper-income peers. 

UC’s success is largely the result of its partnership with the Federal Government and the State of California, which together provide a strong network for our California students. 

My written statement outlines more details, but in the short time 

that I have this morning, I would like to outline some of UC’s recommendations to the subcommittee. 

My simple message is that Congress must increase its investment in Federal financial aid programs, assure that Federal student aid and subsidies are targeted to students with the most financial need, and improve the programs so that they are easy for 

students and their families to understand and access. 

Before I start, I want to note that President Trump’s recently released budget plans for next year would cut more than $50 billion 

from nondefense discretionary appropriations, leading to devastating cuts in all Federal education programs, and essentially 

eliminating the opportunity for any significant increases in the 

Federal investment in education for a long while. 

CEWDOCROOM with DISTILLER

34 

Congress must reject these cuts, and UC and staff recommends 

strong, sustained, and increased funding for the Pell grant program 

to increase the maximum award. Continue annual inflationary adjustments for the award, restore year-round Pell grants, and provide a Pell bonus to students who take increased credits to accelerate their time to completion. 

Protect and strengthen Federal campus-based aid programs, 

which are critical tools for assisting low-income students in pursuing postsecondary educational opportunities. 

Simplify the student aid programs and FAFSA to increase the 

number of very low-income students and families who apply for 

and receive financial aid, but assure that Federal aid remains targeted to the most financially needy students. 

Updating the Federal Student Loan Program is a high priority 

in the reauthorization for UC, and we will support changes that enhance student benefits and improve how loans are administered, 

dispersed, serviced, and repaid. 

UC would strongly oppose reform proposals that eliminate inschool interest subsidies for undergraduate borrowers, limits borrowers, repayment options, or curtails graduate incentives to engage in public service. 

Again, thank you for this opportunity to testify. The University 

of California looks forward to working with you to reauthorize the 

Higher Education Act to expand and improve the law. 

[The statement of Mrs. Copeland-Morgan follows:] 

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SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE DEVELOPMENT 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES 

March 21, 20 17 

IMPROVING FEDERAL STUDENT AID TO BETTER MEET THE NEEDS OF STUDENTS 

WRITTEN TESTIMONY 

YOULONDA COPELAND-MORGAN 

VICE PROVOST, ENROLLMENT MANAGEMENT 

UNIVERSITY OF CALIFORNIA, LOS ANGELES 

Thank you, Chairman Guthrie, Ranking Member Davis and Members of the Subcommittee tor 

inviting me to appear before you today as you consider ways to strengthen federal student aid to 

better meet the needs of students. 

My name is You londa Copeland-Morgan. I am the Vice Provost for Enrollment Management at 

the University of California, Los Angeles (UCLA). My professional dedication to college 

atTordability and access long preceded my time at UCLA, but I am here today to share some of 

the University of California's (UC) successes and make recommendations to improve the federal 

student aid system. 

UCLA is an academically prestigious institution and has a consistently strong record of 

admitting, enrolling and graduating low-income students. Last year, The Washington Monthlv 

ranked UCLA fourth in the nation in promoting social mobility. In fact, all ofUC's ten campuses 

are equally committed to college affordability and access. A New York Times study in2015 

called the UC system "California's social mobility engine." 

UC's core philosophy is to ensure that all students who are eligible for admission can enroll at 

any of our campuses and that a UC education can be affordable. We have succeeded. as 

demonstrated through these facts: 

UC enrolls far more Pel! Grant recipients than any other top research university in the 

country. In 2013-14. 40 percent of our undergraduates were Pel! Grant recipients 

compared to 22 percent at other comparable public universities. 

• Forty-two percent of UC's undergraduates are the first in their families to attend college. 

• More than half of our California undergraduates pay no tuition. 

• UC has one of the most generous financial aid programs of any college in the country. 

• Almost half of our students graduate with no debt- and of those who do, the average 

cumulative debt is $20,900, well below the national average of$30,1 00. 

• Within five years of graduating, those students. on average. make more money than their 

family's total income when they enrolled at UC. 
36 

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We recognize that admitting and enrolling low-income students is not enough; we need to see 

them graduate. In this respect, UC is also succeeding. UC Pell Grant recipients' 6-year 

graduation rates are nearly identical to those of their middle- and upper-income peers. 

UC's success is largely the result of its partnership with the federal government and the state of 

California. In 2015-16, UC undergraduates received: 

• $376 million in Federal Pell Grants; 

• $!2 million in the Supplemental Educational Opportunity Grant (SEOG) program; 

• $22 million in Federal Work-Study; 

• $25 million in Perkins Loans from our institutional revolving fund: 

• $841 million from California's "Cal Grant" program; and 

• $734 million ti·om the University of California's own need-based grant program. 

This strong network of financial assistance that UC offers covers the cost of tuition for 58 

percent of our California resident undergraduates, and helps the lowest income students with 

other expenses including food, housing, hooks and transportation- that arc part of the total 

cost of attendance. 

At UC, students and parents are part of this partnership as well. Parents are asked to contribute 

based on their ability to pay and all students have some skin in the game through a combination 

of savings, part-time work and student loans. 

In considering the importance of these programs to our students, and in looking toward the 

upcoming reauthorization of the Higher Education Act (HEA), UC believes it is critically 

important that Congress increase its investment in the federal financial aid programs, assure that 

federal student aid and subsidies are targeted to students with the most financial need and 

improve the programs so they are easy for students and their families to understand and access. 

The following arc UC's policy recommendations to the Subcommittee to consider: 

Congress must provide robust ami sustained funding for the Pel! Grant Program 

The Federal Pel! Grant program is the foundation of need-based financial aid at colleges and 

universities across the nation, and the program has significantly expanded access to college for 

students who would not have been able to enroll in postsecondary education. Unfortunately, 

however, the purchasing power of the Pel! Grant has declined to where the maximum award 

covers the lowest share of college costs since 1972, when the program was authorized. The 

average Pell Grant, at $3,724, now covers just 19 percent of the annual cost of attendance at an 

in-state public university. 

More troubling is President Trump's recently released budget plans f(Jr next year, which would 

cut more than $50 billion trom non-defense discretionary appropriations, leading to devastating 

cuts to all federal education programs and essentially eliminating the opportunity tor any 

significant increases in the federal investment in education for a long while. 

2 
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Especially at a time when a growing number ofjobs is expected to require some postsecondary 

education and training, Congress must reject these cuts and reatlirm its commitment to invest in 

higher education. Congress must recognize college success and completion as a public good that 

benefits society by preparing students from families across the socio-economic spectrum to 

compete and succeed in a global economy. 

To meet today's educational challenges. the University of California recommends that Congress 

provide strong, sustained and increased funding for the Pel! Grant program to: 

• Increase to the maximum award; 

• Continue the annual inflationary adjustment to the award; 

• Restore year-round Pel! Grants lor eligible students; 

• Provide a Pel! bonus to students who take increased credits to accelerate their time-tocompletion; and 

• Support rewards to institutions that enroll large numbers of low-income students, offer 

significant institutional aid and graduate Pel I students at the same rate as all their 

students. 

The Campus-Based Aid programs must he strengthened 

Federal campus-based aid- the Federal Perkins Loan, Federal Work-Study and Federal 

Supplemental Education Opportunity Grant (SEOG) Program- arc critical tools for assisting 

students in pursuing postsecondary educational opportunities. 

These programs are unique because the federal funds are distributed to institutions, not students. 

Institutions provide significant matching funds so these programs offer more bang for the federal 

"buck," and demonstrate institutions' buy-in. Institutions have the flexibility to target students 

with the greatest financial need and they can usc some of the funds for graduate students who 

have few other federal aid options. 

At UC, more than 15,000 undergraduates benefit from SEOG. Our campuses receive nearly $12 

million dollars and provide eligible students with an average award of$753. 

Nearly 13,000 UC undergraduates receive Federal Work-Study funds, averaging $1,700 per 

student, from total campus awards of $22.2 million. 

The Perkins Loan Program has not received new federal funds in more than a decade, yet UC 

could loan nearly $25 million to financially needy students t!·om its revolving funds. This year is 

the last year when schools arc authorized to make new Perkins Loans, so when Congress 

reauthorizes the HEA, UC will look for ways to support changes to the Perkins Loan program 

that would allow institutions in good standing with the Department of Education in the operation 

of their Perkins Loan accounts to be authorized to continue to use their revolving funds to make 

these important loans to our neediest students. 

The campus-based programs provide critical support to very low-income students to help them 

enroll in college, persist and graduate. Without this aid, these students would have to borrow 

more or work additional hours outside of school, which could affect their academic success. UC 

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urges Congress to protect campus-based aid, and support increased funding to expand these 

programs. 

Federal Student Aid Program.~ should be expanded ami improved 

Free Application for Federal Student Aid (FAFSA) 

There has long been discussion about the FAFSA and how it can be simplified, and it is worth 

noting that several positive changes have been made in recent years to simplify the need-analysis 

process for families, such as the automatic-zero expected family contribution (EFC), and 

development of the Data Retrieval Tool (DRT), where families who file taxes electronically can 

check a box and let the IRS share income and asset information with the Department of 

Education. UC supports these improvements. which have simplified the application process and 

allowed families to more easily and accurately relay their financial information. 

UC sees FAFSA simplification as a desirable way to increase the number of very low-income 

students and families who will apply for financial aid, and to help students and families 

understand college costs and the aid they may be eligible to receive. However, UC believes that 

federal aid should be targeted to the most financially needy families and would have some 

concern if assets and savings are no longer considered in federal need analysis. 

In California, for example. like in many other states, the family financial information from the 

FAFSA is used to award state aid. and UC uses these same data for awarding institutional grants. 

Without the information currently provided by the FAFSA, the state and UC would have to 

develop new forms to gather this information or require applicants to pay for the College 

Scholarship Service Profile that many private colleges use to discern families' financial need. 

Federal Student Loan Programs 

Improving the federal student loan programs is a high priority in HEA reauthorization for UC, 

particularly because our students and parents rely on the federal educational loan programsincluding subsidized and unsubsidized Direct Loans, Parent PLUS, Grad PLUS and Perkins 

Loans- to help cover some of their costs of education. UC's philosophy is to make sure that the 

total amount that students borrow remains manageable given what we know about our graduates' 

earnings. A strong federal commitment to the federal loan programs and a sustained investment 

in these federal student loans is critical to our ability to maintain the manageability of our 

students' debt. 

There is a lot of discussion about "simplifying'' the loan programs. which often means reducing 

the number of borrowing and repayment options for students or eliminating other critical 

benefits. UC strongly opposes this approach. For example, the "one loan" proposal that has been 

offered as a possible option in HEA reauthorization would eliminate the undergraduate in-school 

interest subsidy, representing a total estimated loss to student borrowers of $41 billion, as well as 

eliminate Grad and Parent PLUS loans. Congress must reject proposals like this and instead 

support changes that enhance student benefits and improve how student loans are administered, 

disbursed, serviced and repaid. 

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In fact, UC strongly supports maintaining the in-school interest subsidy for needy 

undergraduates, which for UC students is valued at over $50 million last year alone. Further, 

since students and borrowers repay their loans with interest, the federal government should not 

generate revenue from them, even if the funds arc redirected to other aid. 

In legislation to improve the federal student loan programs, UC would like to see: 

• Increased outreach and communication to borrowers about all repayment plan options; 

• Options for payroll deduction and IRS tax tiling for loan collection; 

• Restoration of the in-school interest subsidy for graduate student borrowers; 

• Return of the in-school interest subsidy for undergraduate borrowers during a postgraduation grace period; 

• Increased transparency for borrowers. including more information about how interest 

accrues while a borrower is in school; 

• The ability to refinance higher interest loans: 

• Elimination of origination fees charged to students; 

• A standard and uniform Department of Education interface between borrowers and 

servicers to assure consistent and excellent customer service; and 

• Increased availability ofloan forgiveness programs for public service, and efforts to 

promote awareness of these programs. 

In addition, UC supports a strong, continued commitment to improving income-based repayment 

plans. While we recognize that it may sound simple to eliminate multiple repayment options, we 

would rather keep the current set of options, despite potential confusion, than offer a single plan 

that is financially worse f()r our student borrowers 

UC will also support increased annual loan limits in the Direct Loan programs. Annual loan 

limits for undergraduate students have not been increased in more than a decade and the caps set 

for freshmen and sophomore students is unrealistically low. Similarly, graduate and professional 

borrowing limits under the Direct Loan program should be increased. 

Finally, we recommend maintaining the federal loan options for graduate and professional 

students, as well as the Parent PLUS loans. These are all critical tools for many of our students 

and families as they complete advanced degrees, and helps them avoid potentially costlier private 

loans. 

Again, thank you for this opportunity to testify. The University of California looks forward to 

working with you to reauthorize the Higher Education Act to expand and improve the Jaw. 

I appreciate your interest in hearing our views on how the federal-state-institutional partnership 

we now have in American higher education can be strengthened to make quality college 

education available to all Americans. 

I have attached for the record two documents: an overview of student aid and outcomes from 

UC's Office of Student Financial Support and UC's At a Glance fact sheet. 

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If you have any questions, or would like additional information about UC's recommendations, 

please contact the UC Washington office at 202-974-6300. 

6 
41 

Chairman GUTHRIE. Thank you for your testimony. The ranking 

member just reminded me that she is an alum of UCLA, and her 

husband is from Kentucky. 

Mrs. COPELAND-MORGAN. She’s not conflicted though. 

Chairman GUTHRIE. Dr. Chingos, you are recognized for 5 minutes for your testimony. 

TESTIMONY OF MATTHEW M. CHINGOS, SENIOR FELLOW, 

URBAN INSTITUTE, WASHINGTON, D.C. 

Mr. CHINGOS. Thank you, Chairman Guthrie. Thank you, Ranking Member Davis, and members of the committee for the opportunity to testify today. 

I’m an education policy researcher at the Urban Institute, and 

the coauthor of ‘‘Game of Loans: The Rhetoric and Reality of Student Debt.’’ 

The views expressed in this testimony are my own, not those of 

any organization with which I’m affiliated, its trustees, or its 

funders. 

The main point I want to make today is that the student loan 

crisis in the news is largely a distraction from the real problems 

facing borrowers and taxpayers. The reality is that most undergraduates borrow less than $40,000, and the average economic return to a college degree is as high as it has ever been, despite the 

rise in tuition. The borrowers most likely to struggle are those who 

never complete a degree, many of whom have relatively small 

amounts of debt. 

Student borrowing has increased dramatically. As a result, 

Americans are getting more education, as well as Federal and 

State policy changes. 

The available evidence suggests the typical borrower today is in 

a stronger financial position than she was a generation ago, and 

the typical monthly burden of student loan debt is largely unchanged since the early 1990s. Most households with education 

debt pay 4 percent or less of their income each month for student 

loans. 

Yet, all is not well with student lending in the United States. In 

fact, there are five crises in student lending. First, we have a completion crisis. Only 59 percent of students who start at 4-year public colleges earn a bachelor’s degree from any institution within 6 

years. At community colleges, it’s 39 percent. 

Second, we have a default crisis. Millions of borrowers are in default and tend to be those with the least debt. 

Third, we have a repayment crisis. Borrowers could avoid defaulting by enrolling in income-driven repayment, but existing programs are confusing and difficult to navigate. 

Fourth, we have an information crisis. Many students do not understand what they’re getting into. Only a quarter of first-year students can accurately report how much they have borrowed. 

Finally, policymakers and taxpayers may soon face a cost crisis 

in the student lending system, especially because loan forgiveness 

programs may have larger costs than projected. 

The popular media narrative of a broad-based student loan crisis 

is problematic because it leads to the wrong policy solutions by foCEWDOCROOM with DISTILLER

42 

cusing on all borrowers, and especially borrowers with the most 

debt, rather than on those who most need help. 

For example, proposals to reduce interest rates on outstanding 

loans, often called ‘‘refinancing,’’ would disproportionately benefit 

affluent households. Instead, Congress should consolidate and simplify the Federal student aid programs to make the best use of limited taxpayer dollars to help students attend and complete college. 

First, there should be one Federal grant program. Eligibility 

should be determined automatically using tax records. All Federal 

subsidies are currently delivered through other programs, such as 

the subsidized loan programs, and should instead be delivered as 

upfront grants. For example, year-round Pell could be reinstated. 

Second, there should be one Federal loan program focused on undergraduate students, not a blank check for parents of graduate 

students. The Parent PLUS Program should be eliminated as creditworthy parents can obtain credit in the private sector. 

The Grad PLUS Program should be limited or eliminated. Graduate students attending programs with a return that justifies the 

cost will be able to obtain funding in the private market. 

Third, there should be one income-driven repayment program 

which allows borrowers to make loan payments as a percentage of 

their income through the tax withholding system. The sole purpose 

of the income-driven repayment program should be to insure borrowers against the risk that they’ll be unable to afford their payments. 

Forgiveness should only be provided as a last resort, and the 

Public Service Loan Forgiveness Program should be eliminated. 

Policymakers seeking to subsidize employment in certain sectors 

of the economy should do so directly rather than through loan forgiveness. 

In conclusion, student loan debt is not inherently good or bad. It 

enables students to make investments in their futures, but those 

investments do not always pay off. The key challenge facing policymakers is to reduce bad investments and the harm they cause 

while resisting political pressure to further subsidize individuals 

who enjoy taxpayer subsidies, but do not need them. 

The upcoming reauthorization of the Higher Education Act provides an important opportunity for Congress to ensure that the 

Federal student aid programs do less harm and more good for students and taxpayers. 

Thank you again for the opportunity to testify today. I look forward to answering any questions. 

[The statement of Mr. Chingos follows:] 

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INSTITUTE 

Statement of 

Matthew M. Chingos* 

Senior Fellow, Urban Institute 

before the 

Education and the Workforce Committee, Subcommittee on Higher Education 

and Workforce Development 

United States House of Representatives 

Improving Federal Student Aid to Better Meet the Needs of Students 

Tuesday, March 21, 2017 

*The views expressed are my own and should not be attributed to the Urban Institute, its trustees, 

or its funders. I thank Sandy Baum and Kristin Blagg for helpful comments. 
44 

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Chairman Guthrie, Ranking Member Davis, and members of the committee, thank you for the 

opportunity to testify today about our nation's federal student aid programs. I appreciate the 

committee's interest in these important programs. 

I am an education policy researcher at the Urban Institute here in Washington, DC, and the 

coauthor of two books on higher education: Game at Loans: The Rhetoric and Reality of Student Debt 

and Crossing the Finish Line: Completing College at America's Public Universities. My publisher has 

provided copies of Game of Loans as background information for the committee members. The 

views expressed in this testimony are my own, not those of any organization with which I am 

affiliated, its trustees, or its funders. 

The student loan crisis you have read about in the news is largely a distraction from the real 

problems facing student borrowers and taxpayers. The poster child for the crisis narrative is an 

unemployed college graduate, usually with a graduate degree as well, who is struggling to find a 

well-paying job and is living in his parents' basement But, in reality, most undergraduates borrow 

less than $40,000, and the average economic return to a college degree is as high as it has ever 

been, despite the well-documented rise in tuition prices. 1 The borrowers most likely to struggle 

are those who never complete a degree, many of whom have relatively small amounts of debt 

There is No Broad-Based Student Lending Crisis 

Student borrowing has increased dramatically, with total outstanding debt rising from about $300 

million in 2003 to more than $1.3 trillion today. 2 This increase, which continues a trend that began 

in the early 1990s, partly reflects that more Americans are going to college and completing more 

degrees. My research with Beth Akers estimates that rising college attendance and degree 

attainment explain about 30 percent of the increase in borrowing since 19893 

Three federal and state policy changes have also contributed to the increase in student debt: 

1) Federal loans are available on an essentially unlimited basis (up to total cost of attendance, 

including living costs) to graduate students. Indeed, graduate students took out 34 percent 

of federal student loans in 2013-14, despite making up only 14 percent of US students.4 

2) The 1992 reauthorization of the Higher Education Act made federal loans available to all 

students, rather than limiting them to students with demonstrated financial need. This 

policy change was followed more or less immediately by a rapid acceleration in the amount 

borrowed per student 

1 Beth Akers and Matthew M. Chingos, Game of Loans: The Rhetoric and Reality of Student Debt (Princeton, NJ: 

Princeton University Press, 2016) pp. 68-75. 2 Game of loons, p. 2; Quart~LlYJI&PoJ:tonftQl!s_G[!Q!cLQgl!LmlJLCrcdiJ. (New York: Federal Reserve Bank of New 

York, February 2017). 3 Game of Loans, p. 44. 4 Game of loans, p. 16. 

2 
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3) State governments have decreased their support of public colleges (on a per-student 

basis), leading to rising tuition. As a result, students are now paying for part of their 

educational expenses that state taxpayers used to cover. 5 

Despite large increases in student borrowing, the available evidence suggests that the typical 

student borrower today is in a stronger financial position than she was a generation ago. Between 

1992 and 2013, the average household with education debt saw an increase of $23,000 in debt 

and $7,000 in annual wage income. At first glance, that larger increase in debt than in income 

appears to indicate that the average household is worse off. But the debt is incurred once, and 

income is received every year. So the increase in debt can be paid off with just a few years of the 

higher incomes that households with debt now receive6 

A larger debt load could squeeze borrowers in the short run if monthly payments are 

unaffordable. But this does not appear to have occurred: most US households with education debt 

pay 4 percent or less of their income each month toward student loans, a statistic that has 

changed little since the early 1990s.7 

The Real Student Loan Crises 

The fact that the typical borrower is in a reasonably strong financial position does not mean that 

all is well with student lending in the United States. In fact, we have five crises in student lending 

that are too often overshadowed by the exaggerated media narrative discussed earlier. 

First, we have a completion crisis. Only 59 percent of students who start at four-year public 

colleges earn a bachelor's degree from any institution within six years (the corresponding figure 

for private, nonprofit colleges is 72 percent). Among students who start at community colleges, 

only 39 percent earn any degree from any institution within six years. 8 Students who complete 

degrees receive far more economic return to college attendance than those who do not9 

Second, we have a default crisis. Every year, more than 600,000 borrowers default on their 

student loans within three years of starting to repay them. 10 Th is likely hurts their credit and 

ability to borrow in the future. But the millions of borrowers in default tend to be those with the 

5 Game of Loans, pp. 58-59. 6 Game of Loans, pp. 77-78. 7 Game af Loans, pp. 79-80. 8 Completing College;Af'l_aJignal Vig,w_gUllJ.ill:.Tltlltloinment Rates ::_Fall 2010 Cohort (Herndon, VA: National 

Student Clearinghouse. 2016), figure 12. 

'Thomas Hungerford and Gary Solon, "Sheepskin Effects in the Returns to Education," Review of Economics and 

Statistics 69 (1987): 175-77. 10 Michael Stratford. "Default Rates Drop," Inside Higher Ed, October 1, 2015, 

h ttps ://wYJL.vy. i nsirlchi !!h(•r ed. com/ news/20 1 5/1 0101/ student -l o;m -clefn u [ ts -drop- obarna~ adm in-Jga in-tweaksratcs. 

3 
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least debt, not the most 11 That's because large balances often come with degrees that enable high 

incomes. Borrowers who do not graduate, and therefore are less likely to earn more money after 

attending college, are more than twice as likely to default on their loans as graduates." 

Third, we have a repayment crisis. Borrowers could avoid defaulting on their loans by enrolling in 

income-driven repayment. But too few do, because they do not know about these programs or 

find them too hard to understand or navigate. Well-intentioned efforts to expand access to 

income-driven repayment have created a panoply of programs: old income-based repayment 

(IBR), new IBR, pay as you earn, and revised pay as you earn, just to name four. 13 

Fourth, we have an information crisis that plagues both repayment and borrowing decisions. Most 

students don't know what they're getting into, or even how much they're borrowing. In a 2012 

federal survey, only a quarter of first-year students could accurately report (within 10 percent) 

how much they had borrowed. Twenty-eight percent of students with federal loans said they had 

no federal loans, and 14 percent said they had no debt at all. 14 

Finally, policymakers and taxpayers may soon face a cost crisis in the student loan system.ln 

particular, loan forgiveness programs may have larger costs than policymakers expected and 

budget agencies projected. 15 This concern is amplified by a recent Government Accountability 

Office report that raises serious concerns about the accuracy of cost estimates made by the US 

Department of Education. 16 It is impossible for Congress to make responsible policy choices 

without accurate data from the Department of Education. 

Addressing the Real Problems 

The prevailing media narrative of a broad-based student loan crisis is problematic because it leads 

to the wrong policy solutions by focusing on all borrowers-and especially borrowers with the 

most debt-rather than on those who most need the help. For example, proposals to reduce 

interest rates on all or most outstanding loans (often called "refinancing") would substantially 

benefit affluent households because the highest-income 20 percent of households hold 44 

11 Meta Brown, Andrew Haughwout, Donghoon Lee, Joelle Scally, and Wilbert van der Klaauw, "Looking at 

Student Loan Defaults through a Larger Window," Liberty Street Economics, Federal Reserve Bank of New York, 

February 19, 2015, 

bJlR://IibcrtystrectcconQinics.ncwyorkfcd.on?./2015/02/looking at student loan defaults t!1rough a larger win 

dow.html. 

12::r;-,;::year Student Loan Default Rates by Repayment Cohort and Degree Completion Status, 1995-96 to 

2011-12," Trends in Student Aid, College Board, httrs:l/trends.collegeboord.org/stuc!ent-aid/figures·tables/twove<~r"student-lo::Jn-default-rates-degrc!2~cornplctlonkstJtus··over-tirnc. 

13 Game of Loans, p. 118. 14 Elizabeth J. Akers and Matthew M. Chingos, Are College Students Borrowing Blindly' (Washington, DC: 

Brookings Institution, 2014). 15 Jason Delisle, 'TJKt:orning PllilJLt:Servicgl.mm..EQ[g]veness \lgnan(2," Evidence Speaks Reports 2, no. 2 

(Washington, DC: Brookings Institution, 2016). 16 "Fcdcrautudent LoiJJLs.: Education Needs to Improve Its Income-Driven Repayment Plan Budget_Estimates," 

GA0-17-22 (Washington, DC: US Government Accountability Office, 2016). 

4 
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percent of debt. At the same time, a borrower struggling to make a $50 payment will likely also 

struggle to make a $44 payment. 

Perhaps even more wasteful are efforts to amend the tax code to provide additional preferential 

treatment for student loans, as in a recent bipartisan proposal to allow employers to provide taxfree student loan assistance. Because of the structure of the tax system and the nature of student 

borrowing, this move would provide a regressive handout to the wealthiest borrowers and do 

nothing to help those who are struggling to repay their loans. 17 

Instead, Congress should consolidate and simplify the federal student aid programs and make the 

best use of limited taxpayer dollars to help students attend and complete college. The current 

programs, which resulted from well-intentioned policy changes over many years, need to be 

streamlined and returned to their core missions: grants to needy students and loans that enable 

students to invest in their future success. 

One Grant, One Loan 

First, there should be one federal grant program and one loan program. 18 Eligibility should be 

determined automatically using tax records, eliminating the need for an application form. For 

example, eligibility for Pell grants could be based on students' average family income between 

when they were 10 and 16 years old. This would enable grant dollars to be delivered to families 

based on a careful analysis of financial need while communicating eligibility early and clearly. 

The single grant program should deliver all federal grant aid to college students. We now have 

strong evidence that the federal higher education tax credits are a waste of taxpayer money. 19 

These tax credits, which total about $23 billion, should be eliminated and the funds used (at least 

in part) to expand the $33 billion Pell program. However, doing so is complicated by the fact that 

higher education tax credits are outside the jurisdiction of this committee. 

The single federal loan program should be a student loan program, not a parent loan program. The 

Parent Loan for Undergraduate Students (PLUS) program should be eliminated, as creditworthy 

parents can obtain consumer credit in the private sector. Policymakers seeking to expand access 

to credit for dependent undergraduate students should increase the loan limits for these students 

rather than continuing to make their parents choose between taking on debt they are going to 

struggle to repay and telling their children to look elsewhere for college. 

17 Matthew M. Chingos, "Don't let student borrowers off tax free," Urban Wire (blog), Urban Institute. March 3, 

2017, htto:l/www.urban.org/urban-wire/clont-let-student-borrowers-tax-frcc. 18 There are good reasons to divide the Pel! program into two components, one aimed at young people (e.g., 

through age 24) and another for older adults who return to school (see Sandy Baum et al., "<!inking PeiJ. 

Grants," New York: College Board. 2013). 19 George B. Bulman and Caroline M. Hoxby, :'-!.!!'::-"'""'-=--'-'Llilli .. L'"""'.ill..'-""-'='-"-"'"'-'-'"-'==-"-"~""-"'U· Working Paper 20833 (Cambridge, MA: NBER, 

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The federal loan program should focus on undergraduate students and rein in excessive federal 

borrowing by graduate students. The grad PLUS program should be limited or eliminated. 

Graduate students attending programs with a return that justifies the cost will be able to obtain 

funding in the private market, while low-return programs will no longer be able to operate at 

taxpayer expense. Policymakers seeking to support programs with low economic returns but high 

social returns (e.g., social work) should subsidize those programs directly, such as through 

targeted grant programs. 

All federal higher education subsidies should be delivered through the Pel I grant program. This 

means that taxpayers should not pay interest on loans while students are in school, as they 

currently do on subsidized loans, and instead use those subsidies to provide up-front grants that 

directly reduce the prices students pay (e.g., by reinstating year-round Pel I), It also means that the 

loan program should break even fiscally-and not make profits off students or entail significant 

costs for taxpayers. 20 

One Automatic Income-Driven Repayment Program 

There should be one income-driven repayment program, which allows borrowers to make loan 

payments as a percentage of their income through the tax-withholding system. Borrowers could 

automatically be placed in this program upon leaving college (unless they choose to pay off their 

loans more quickly), thus significantly reducing defaults and limiting the need for loan servicing.21 

Income-driven repayment must tie the percentage of income paid toward loans to the amount 

borrowed, so students remain sensitive to the prices charged by institutions and to the amounts 

they borrow. 22 

As with the student loan program, the repayment program should not be used to deliver subsidies 

to broad groups of borrowers. Instead, it should be used to insure borrowers against the risk that 

they will be unable to repay their loans. Forgiveness should only be provided as a last resort (e.g., 

after 25-30 years), if at all, and the Public Service Loan Forgiveness (PSLF) program should be 

eliminated. Policymakers seeking to subsidize employment in certain sectors should do so directly, 

such as through targeted grant programs, rather than through loan forgiveness. 

Eliminating PSLF and reducing the generosity of other forgiveness provisions for future borrowers 

is not only a matter of ensuring that subsidies are delivered fairly, It is also critical to the fiscal 

sustainability of the student loan programs. PSLF, in particular, is likely to be far more costly for 

20 Breaking even is difficult to accomplish in practice owing to uncertainty about future borrowers' repayment 

behavior. For more on this subject, including the debate over accounting methods, see Matthew M, Chingos, "£.rill 

govcrnmentJ2LQflJ5_glJ.2.t.\Kien_tj05m;;: Shift risk.illJ.CI_jg.l'L<crJnlcrgili;ns;~" (Washington, DC: Brookings Institution, 

2015); and Donald R Marron, "The $300 Billion Question: How Should We Budget for Federal Lending 

Programs'" (Washington, DC: Urban Institute, 2014), 21 Susan Dynarski and Daniel Kreisman, b!d'"-'12-'-"'-"''"·''""'.!l"-L~CJ&H""-"' 'LJ:::u!JSJlll.:Jlill.L'l.Y'i!J.ll:;.y;CWJu~'LJ.\i.llilY-" Students"' Hamilton Project Working Paper 2013-05 (Washington, DC: 22 Matthew M. Chingos, "Jeb Bush's student loan ulan should outlive his carnraien," Evidence Speaks Reports 1, 

no. 10 (Washington, DC: Brookings Institution, 2016), 

6 
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taxpayers than previously anticipated, in part because roughly 25 percent of the workforce is 

employed in a PSLF-eligible job.23 

Student debt is not inherently good or bad.lt enables students to make investments in their 

futures, but those investments do not always pay off. The key challenge facing policymakers is to 

reduce bad investments and the harm they cause while resisting political pressure to further 

subsidize students and parents who enjoy taxpayer subsidies but do not need them. 

The upcoming reauthorization of the Higher Education Act provides an important opportunity for 

Congress to ensure that the federal student aid programs do less harm and more good for both 

students and taxpayers. I hope my testimony will contribute to that important effort. Thank you 

for the opportunity to testify today. I look forward to answering any questions. 

23 Jason Delisle, "The coming Public Service Lmn Forgiveness bonanza." 

7 
50 

Chairman GUTHRIE. Thank you very much. I thank all the witnesses for testifying. Now, we will go to member questions. I will 

first recognize the chairman of the full committee, Mrs. Foxx of 

North Carolina. Dr. Foxx. I apologize. 

Dr. FOXX. It is okay. Thank you very much, Chairman Guthrie, 

and I want to thank all of the witnesses. You have given great testimony this morning. We appreciate you being here. 

Ms. Soucier, I am aware of Houston Community College participating in ‘‘Aid Like A Paycheck’’ experiment, where students receive aid incrementally instead of in a lump sum at the beginning 

of the year or semester. Have you seen any results from this experiment or any evidence that such a disbursement method would be 

useful for both students and taxpayers? 

Ms. SOUCIER. Yes, thank you. We have been participating in Aid 

Like A Paycheck for the last 3 years. The data are just starting to 

come in, but internally, we have seen improvements in retention of 

students, not for the reasons why you might have guessed. 

We have a system in place right now called ‘‘Return of Title IV,’’ 

so when a student withdraws during a semester, we have to recalculate the rate eligibility. And a lot of times they have to return 

aid that they already received, causing the students to be left with 

a balance due, which means as long as that balance is due, they 

can’t come back to school, which is a problem, because many of our 

students drop out for personal reasons and life happens, basically. 

So, they want to come back, but they can’t until that debt is paid, 

and the problem is they don’t have the funds to do so. 

So, Aid Like A Paycheck, what it has done is it has spread out 

the disbursements over the entire semester, so we give out the disbursements every 2 weeks. So, those students who have had to 

withdraw, they now no longer owe money because they haven’t received the funds yet. So, recalculating their aid is causing them to 

basically break even for the most part, and in a lot of cases, we actually owe them a little bit of money based on the calculation, return on the Title IV calculation. 

So, we have seen that students don’t have that debt when they 

want to come back the next semester or a year later. So, it has benefitted students greatly in that aspect. 

Dr. FOXX. Thank you very much, great insight. Dr. Chingos, 

thank you very much for your book. I am going to read it this 

weekend. You advocate eliminating subsidized loans and instead 

using the dollars to provide grants that reduce the cost of college 

for students. 

Ms. Conklin’s testimony also suggested a one loan program that 

eliminates the distinction between the subsidized and unsubsidized 

loans. Ms. Soucier discusses the confusion in delays. 

Can you expand on why you suggested elimination of the undergraduate subsidized loan, and your thoughts on whether this subsidy is effective in helping the neediest students, or are there other 

ways we could better target limited Federal funds? Actual limited, 

hard-working taxpayer dollars, which is what we are talking about. 

Mr. CHINGOS. Thank you for the question, Dr. Foxx. The idea of 

eliminating the in-school interest subsidy on loans isn’t to take resources away from anyone, but it’s to deploy them in the way 

where they are most likely to impact behavior. 

CEWDOCROOM with DISTILLER

51 

So, if we want to help low-income students complete college, I 

think it’s better if we’re going to give them a subsidy to give it all 

as an upfront grant, to reduce the price that they pay for college 

on day one, rather than reducing an interest rate that accrues during college. 

So, I just think it makes the most sense to provide all those dollars as upfront grants rather than burying them in a subsidy that 

students may not really understand. 

Dr. FOXX. Thank you very much. Ms. Conklin, you bring up an 

important point about what constitutes full-time enrollment. As 

you point out, 12 hours is now considered full-time by the Federal 

Government. It is a message to students because only 55 percent 

of them are graduating within 6 years. 

I am intrigued by the State results that States have seen when 

setting the expectation for on time completion. Would you want to 

say a little bit more about what this does about college affordability, and can you explain the relationship between enrollment 

intensity and the odds of completion? 

Ms. CONKLIN. Dr. Foxx, thanks for that question. I’ll probably 

run out of time and submit a full answer for the written record. 

Simpler tells the truth they need to hear, the best way you are 

going to save money, as much as 50 percent on your education, is 

to finish on time. When you give these realistic expectations to students, as we have seen in Indiana, we not only tell students what 

they need to do, we tell colleges. 

In Indiana, they’ve started opening up their summer resident 

halls at a discount or for free. We see reduced tuition. We see 

changes in guidance. That is why we see the improvements across 

the board in both 2-year and 4-year sectors. 

Chairman GUTHRIE. I think maybe you will be able to cover that 

in further time, but the Chairwoman’s time has expired. 

Dr. FOXX. Thank you very much. 

Chairman GUTHRIE. I appreciate your answer. We will get to 

that, I am sure, as we move forward. I recognize the ranking member, Ms. Davis, for 5 minutes of questions. 

Mrs. DAVIS. Thank you, Mr. Chairman. I wanted to direct my 

first question to Mrs. Youlonda Copeland-Morgan. The President’s 

budget would make significant cuts, as we know, to campus-based 

aid programs, and would deprive millions of students of muchneeded aid. 

How would the elimination of these programs or a reduction in 

funds impact the students on your campus and across California, 

and can you be as specific as possible? 

Mrs. COPELAND-MORGAN. Yes. Let me just state for the record, 

I’m a first-generation college student and benefited from all of 

these programs, and as a result of that, the Federal Government 

made less investments in my children, which is exactly what we 

are trying to do here. 

First of all, these programs are critical to not only access, but to 

retention of these students. The idea that we would have one loan 

and one grant sounds simple enough, but, in fact, life is complex 

and being a student is complex. 

Our responsibilities as financial aid officers are to ensure that 

students have mentors there who can help them fill the gap, and 

CEWDOCROOM with DISTILLER

52 

that’s what campus-based aid does. Without campus-based aid, the 

Federal Perkins Loan Program, Work Study Program, and FSEOG 

Program, we would not have the tools that are necessary to target 

the most neediest students, and that’s what really allows us not 

only to provide access to these students, but to graduate them. 

So, we’re advocating – and I’ve, as past chairman of the College 

Board, on our national association, and for decades, we’ve been saying especially because of the loss in the Federal Pell grant program, the loss of purchasing power there, that we’re advocating 

that we retain these programs. They work. 

We certainly believe that there are more improvements that can 

be made, but the continuous investment in campus-based programs, increase in maximum Pell grant amounts, and continued 

Federal investment in these programs are key given the demographics of our society today. 

Mrs. DAVIS. If we were somehow able to keep the amount the 

same, and that’s the difficulty with trying to simplify is that we 

lose generally whenever we try to consolidate, that seems to happen, would there be a reduction in the complexity if, in fact, that 

could be done at some levels, and why do you think that is not likely to happen? 

Mrs. COPELAND-MORGAN. I doubt it because the financial aid program—financial aid comes from State sources and institutional 

sources, which all have different forms, but right now, the current 

FAFSA allows many States to eliminate having their own application. 

So, eliminating or simplifying, oversimplifying, the FAFSA form 

would simply result to where we were decades ago, where every 

time a student wanted to apply for State aid or institutional aid, 

they had to fill out a separate application because the Federal 

Needs Analysis did not meet the needs of the States or institutions 

who were interested in making sure that their financial aid is targeted to the most needy students. 

I think of this sort as the IRS process. We do not allow all citizens to fill out a 1040A. The IRS process is complicated, overly 

complicated, but the idea is that we want to be able distinguish our 

low-income students from middle-income students, from those families who have the ability to pay. 

So, I do believe that going back, oversimplifying the FAFSA 

form, will result in a more complex process for our students. 

Mrs. DAVIS. Thank you. Ms. Soucier, I wonder if you could speak 

for a second, I know in your written testimony you spoke about the 

fact that many, many students on campus are subject to FAFSA 

verification, and you mentioned out of 80,000 aid applicants, 38,000 

were selected for verification. And you also indicated that low-income students who may have a harder time providing required documents are more likely to be forced out through the verification 

process because they are not able to complete that. 

Could you speak to us a little bit about that, and how do we deal 

with that? What happens to those students? 

Ms. SOUCIER. Sure. I’d be happy to. In what I call my ‘‘backroom 

operation,’’ I have 18 people, and all they do is verification day-in 

and day-out. There are a multitude of different types of students 

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53 

that attend Houston Community College. We’re a melting pot. Our 

city has people from all over, with all different circumstances. 

So, we deal with a lot of unusual situations, especially with the 

tax law. We deal with a number of students who were unable to 

fill out their taxes correctly, and we have to look at that information when we’re doing verification. 

So, basically what’s happening is the forms themselves are taking time for students to complete. 

Chairman GUTHRIE. Maybe we can get to those as we move forward. 

Ms. SOUCIER. Yes, I’d be happy to give you more details on that. 

Chairman GUTHRIE. I recognize myself for 5 minutes for questions. Ms. Soucier, the statistics Dr. Chingos highlighted in his 

written testimony were stunning. According to a study by The 

Brookings Institute, which Dr. Chingos coauthored, only a quarter 

of first year students could accurately report how much they had 

borrowed, and 14 percent of the students who had borrowed money 

thought they had no debt at all. 

This information problem is very concerning to me, and it is why 

I introduced the bill I mentioned earlier, that would require improved Federal aid counseling for aid recipients throughout their 

education. 

Are you noticing trends Dr. Chingos discussed in his testimony 

on your campus, and can you discuss the benefits to students 

where you have been able to counsel them about their financial 

aid? 

Ms. SOUCIER. Absolutely. As a matter of fact, we have six financial coaches on staff at our institution. Those coaches work very 

closely with students that are willing to come to our counseling sessions and are willing to come to our workshops that talk about debt 

and student loan repayment options. However, we can’t require it, 

so we are prohibited from requiring them to come before we can deliver the funding to them, so it’s difficult to get students to want 

to come to these sessions and learn about student aid and student 

loan debt. 

If we had the ability to require them to even do an online process, put together some online videos and watch what it means to 

have a student loan and repay those student loans, I think that 

would benefit them greatly. 

Our students are defaulting on the loans because they don’t understand it. They don’t understand they even took out a loan. All 

they’re doing is signing a piece of paper, electronically, online. 

They’re accepting a loan. They’re going in and doing a quick and 

easy online promissory note, and they’re not reading the fine print, 

and they don’t understand what they’re getting into until they 

graduate and walk away. 

Chairman GUTHRIE. I would like to move to Ms. Conklin. Thank 

you for your answer. Ms. Conklin, I noticed that HCM’s proposal 

eliminates current deferment and forbearance options, which allow 

borrowers to suspend payments during times of economic hardship. 

Can you explain how the Technical Panel arrived at the conclusion the elimination was better for borrowers, and can you discuss 

the impact such a proposal would have on borrowers struggling to 

make their payments? 

CEWDOCROOM with DISTILLER

54 

Ms. CONKLIN. Thank you, Mr. Chairman. So, what he’s referring 

to is the Technical Panel I led back in 2012, a bipartisan group of 

academics and financial aid experts. 

What we recommended was the single loan program is an income-based loan repayment program, so basically a family would 

have the ability to take up to 300 percent of their family income— 

300 percent of their family income would be deducted from their 

available income—and then they didn’t have a decision to pay up 

to 15 percent of that. 

So, being able to adjust your payments based on your income is 

the relief that you would need in repayment. Again, you take the 

lower of the two payments. So, it’s putting everybody into that default loan repayment, but itself is the borrower benefit. 

Chairman GUTHRIE. Thank you. Now, Dr. Chingos, the topic of 

the Bennett hypothesis would suggest that increases in available 

Federal student aid corresponds with increased tuition prices, and 

often comes up as we discuss the aid programs provided by the 

Federal Government. 

The last thing we want to do as Federal policymakers is make 

higher education more expensive. Can you discuss your thoughts 

on the hypothesis and what we should consider as we reauthorize 

the Higher Education Act? 

Mr. CHINGOS. Right. I think the Bennett hypothesis had a lot of 

intuitive appeal, make more money available for something and it 

enables institutions or, in the long run, at least makes it easier for 

them to raise their prices. 

The evidence on it is somewhat mixed. I think Federal policymakers ought to be most concerned about situations where the 

Federal funding footprint is the largest, so cases like with graduate 

loans where graduate students can borrow up to the total cost of 

attendance, no questions asked, I think we should be concerned 

there. 

I think we ought to be concerned with institutions where Federal 

grants and loans make up a very large share of student aid. 

Chairman GUTHRIE. Thank you. That concludes my questions. I 

will now recognize Ms. Adams. I am sorry. I will recognize Mr. 

Espaillat for 5 minutes for questions. 

Mr. ESPAILLAT. Thank you, Mr. Chairman. Dr. Chingos, you have 

mentioned you advocate for the elimination of loan forgiveness programs. Loan forgiveness programs have for many years, since at 

least 2007 for sure, have been a part and parcel of a mechanism 

to bring professional help and public service to distressed areas 

across the Nation. 

For example, school districts that have shown for many years to 

lack academic achievement levels that we could all be proud of 

have used forgiveness loans to attract very qualified teachers to 

come to those school districts, to try to pull them by their bootstraps. 

Communities that do not have the adequate health care often resort to loan forgiveness programs to bring in doctors and nurses 

that will help them become healthy again. 

So, this is a very important program, not only for those that will 

benefit from the loan forgiveness, but for communities across the 

country that are facing dramatic challenges. 

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Why adopt this heavy-handed approach to eliminate loan forgiveness programs when, in fact, these are essential and basic to many 

neighborhoods throughout the country, and particularly those 

neighborhoods that are facing great challenges in education, health 

care, and other arenas where we could bring the best professionals 

that we have available? 

In some cases, we have had to go abroad to bring qualified teachers to our school districts. We have had to go abroad to bring medical professionals to our neighborhoods. 

Why be punitive and say you are not going to be rewarded for 

coming into these very and distressed neighborhoods that require 

the public service that you are able to provide? 

Mr. CHINGOS. Thank you, Congressman, for the question. My 

view is that loan forgiveness is a very blunt instrument for attacking those extremely important problems that you identified. The 

problem is that loan forgiveness, particularly the public service 

loan forgiveness program, delivers what amounts to taxpayer subsidies in a very arbitrary manner. 

So, it’s true that those high needs areas you identified could potentially benefit, but roughly one-quarter of the economy is defined 

as public service under the law. So, the amount of benefits someone 

gets relates to sometimes an arbitrary distinction between whether 

their organization qualifies or not, so doctors in nonprofit hospitals 

get it, but not doctors in for profit hospitals, even though they may 

be doing similar work. And the amount of benefit you get relates 

to not just the importance of the work you’re doing, but how much 

you borrowed for school. 

So, you could have two people working in the same nonprofit, one 

of them worked their way through a public college, didn’t take on 

a whole lot of debt, and the other person went and borrowed as 

much as they could to get an undergraduate degree and a graduate 

degree somewhere, and that second person would get a whole lot 

larger subsidy. 

So, I think there is just much better targeted ways of helping 

people and, as I said in my testimony, subsidizing people in certain 

sectors of the economy rather than forgiveness. 

Mr. ESPAILLAT. Getting to the minutia of things, sometimes you 

could lose the forest for the trees. Let me give you an example. Bilingual teachers, certified bilingual teachers, which are essential to 

many neighborhoods, many districts, many States across the country, where we want to bring recent arrivals, English language 

learners up to par with everybody else, are lacking. And as a result, we have to go to Spain, Chile, all over the planet to get these 

certified teachers to come in, these bilingual teachers to come into 

our districts. 

Why not create an incentive in our higher education system to 

have the best that are local here to come to those districts? Health 

areas, many districts lack primary care physicians, emergency 

room physicians. We have to go abroad to get doctors. By the way, 

some of them may not be able to come in through the, because of 

the Muslim ban now. But we have to go abroad to get these doctors. 

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Why not create an incentive here locally for our U.S. students to 

come into these districts and get access to these loan forgiveness 

programs? What is wrong with that? 

Mr. CHINGOS. My view is those incentives be provided directly by 

either tax credits to those people or just ways to increase their salaries and not through loan forgiveness programs that also have to 

give away money to a bunch of other people. 

Mr. ESPAILLAT. I think tax credit programs are often backdoor 

mechanisms that are not always needed by the recipient. Thank 

you, Mr. Chairman. I yield my remaining time. 

Chairman GUTHRIE. Thank you, appreciate it. I now recognize 

Ms. Stefanik for 5 minutes for questions. 

Ms. STEFANIK. Thank you, Mr. Chairman, and thank you to the 

witnesses for your testimony on this very important issue today. 

I also was the first member of my immediate family to graduate 

from college, so making higher education more affordable and more 

accessible is one of my top priorities. 

I have worked closely with schools in my district, in New York’s 

21st congressional district, to address the challenges of affordability, and these conversations, particularly with community colleges, have laid out what can be accomplished if we modernize the 

Federal Pell grant program. 

So, my first question is for Ms. Soucier. You and other witnesses 

today have mentioned year-round Pell grants as a way to help students complete their education more quickly. You also mentioned 

the implementation difficulties of the old year-round Pell grant program. 

Earlier this month, I reintroduced the bipartisan Flexible Pell 

Grants for the 21st Century Students Act, which reinstates yearround Pell grants, but my bill also addresses implementation concerns by specifying that institutions can decide which award year 

to assign the payment toward for payment spanning two award 

years. 

Would this address some of the implementation concerns you 

mentioned, and can you expand on how you believe year-round 

Pells would benefit students? 

Ms. SOUCIER. Well, I think year-round Pell was a success once 

we implemented the complexity of it. It took us a couple of years 

to get our systems to understand how to treat students under that 

new framework, but once we did it, we started seeing the benefit 

of it. 

I, personally, did my bachelor’s degree in 2–1/2 years, and I know 

how much money that saved me. I didn’t have year-round Pell back 

then. I just had the straight Pell and lots of student loans. 

I know it is a tremendous saving of time and money to enable 

students to go year-round. It’s also a retention tool because keeping 

the student engaged over the summer is a big deal. We lose a lot 

of students, especially at the university level, during the summer, 

as things start to happen in their life. Keeping them engaged during the summer is a huge benefit to the student and the school, 

and improves completion rates. 

So, I do know for a fact year-round Pell benefitted students, and 

we were actually unhappy to see it go away when it did. 

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Ms. STEFANIK. Thank you for adding in the importance of college 

completion, because as we grapple with the student loan crisis, 

raising that completion rate is a critical piece to the puzzle. 

My next question, which is on the same issue, is for Ms. Conklin. 

In your testimony, you discuss how year-round assistance and increased flexibility would help improve access for nontraditional students. 

Can you expand upon how increased flexibility in the disbursement of Federal Pell would assist the student, for example, who is 

slightly older, is working part-time, is a parent? 

Ms. CONKLIN. Thank you, Congresswoman, for your focus on 

what we call ‘‘today’s students’’ in the business. Most of our students today are what used to be nontraditional, and they, in fact, 

do have to juggle work and children in order to earn their credential. 

So, what we are seeing more and more in higher education is 

real innovation in delivery, where people are able to do self-paced 

learning, we’re able to put remedial courses in the middle of the 

credit-bearing courses, and give students additional support so they 

get out of remedial education quickly. All those innovations require 

flexibility around the disbursement of money. 

Some of our most successful programs for nontraditional students, I think about CUNY ASAP, which is being replicated in 

other places like Ohio, that is a set of guided pathways for nontraditional students. It costs more in those first 2 years to be able 

to educate them, but at the end, it’s a lower cost per degree for taxpayers and for students. 

So, what we need to be able to do is frontload some of that Pell 

money for those early years, to fund that integrative program 

which has very good results. 

Ms. STEFANIK. Thank you very much. I just want to take a moment to thank the committee for their support and thank my colleagues who have signed on as cosponsors. This is a bipartisan bill, 

and for any of my colleagues who are not cosponsors, I want to encourage you to look at the Flexible Pell Grants for 21st Century 

Students Act. 

This is modernizing Pell. It is bipartisan, and I am hopeful we 

can get this passed in this Congress. Thank you, and I yield back. 

Chairman GUTHRIE. Thank you. Thank you for yielding. I now 

recognize Ms. Adams for 5 minutes of questions. 

Ms. ADAMS. Thank you, Mr. Chair, and thank you, Ranking 

Member Davis, for hosting this hearing, and to those of you who 

are here testifying, we thank you very much as well. 

Ensuring that students have greater access to an affordable higher education is critical to adjusting our Nation’s skill gap and preparing Americans for the jobs and the economy in the 21st century. 

I would just add to the comments that have been made that I, too, 

was a first-generation college student. 

Last year’s Republican platform called for a stop to the direct 

loan program and to return to a system similar to the Federal 

Family Education Loan Program, where private lenders originated 

federally guaranteed loans and services. Think tanks, however, 

have argued that going back to this type of system would only increase costs to the taxpayers. 

CEWDOCROOM with DISTILLER

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Therefore, more recent proposals have now focused on scaling 

back or eliminating Federal lending for two groups. The authors of 

these proposals argue that because these two groups of individuals 

have a credit history, the private market can serve them just as 

well as the Federal Government, if not better. 

My question, Mrs. Copeland-Morgan, I want to focus on Parent 

PLUS loans, and would like to know if eliminating Parent PLUS 

loans would be detrimental to students in your opinion, and, if so, 

why? 

Mrs. COPELAND-MORGAN. Indeed, it would be detrimental to the 

student and to the families. The fact is not all families can get access to private loans. Secondly, there are predatory practices out 

there in the private loan area, an area that since going to direct 

loans we’ve spent less time counseling parents and students on, 

and also PLUS loans allow families who have not had the ability 

to save for college to contribute to their children’s education. I 

think that is a fact that is overlooked. 

The private loan market simply did not serve our most neediest 

families well, nor did it serve those families, working middle-income families, well at all. 

So, I would certainly remind us to look at some of the challenges 

that we were dealing with before direct loans. 

Ms. ADAMS. Thank you for that response. As you mentioned, 

eliminating Parent PLUS loans would be detrimental to a number 

of students, particularly students at HBCUs and low-income students seeking graduate degrees. 

I have a letter, Mr. Chair, from Dr. Michael Lomax, president 

and CEO of UNCF, which supports college success for minority students, outlining the need to provide Federal investment in Pell 

grants, including restoring year-round Pell, increasing the maximum awards, and so forth, and I would like to submit this for the 

record. 

Chairman GUTHRIE. Without objection, so ordered. 

Ms. ADAMS. Thank you. Knowing that the President’s budget 

blueprint raised nearly $4 billion from Pell, this letter is even more 

important so I thank you for receiving it. 

Mrs. Copeland-Morgan, the reauthorization of the Higher Education Act affords Congress with an opportunity to simplify the financial aid system, specifically FAFSA. Research has shown that 

this form presents barriers for low-income and first-generation students. In fact, about $24 billion goes unclaimed each year, including $2.7 billion in Pell grant funding. 

Although the form has been simplified throughout the last two 

decades, I believe that more can be done, but I also know that simplification comes with tradeoffs. Making it too simple means aid 

will be less targeted by States and institutions, many of which rely 

on information found on the FAFSA to determine State and institutional aid, and may no longer have sufficient information to make 

accurate awards. 

Do you agree that these are valid concerns, and, if so, what considerations should we be mindful of as we work to simplify FAFSA? 

Mrs. COPELAND-MORGAN. I do agree that oversimplification is a 

valid concern. I think there are improvements that can be made, 

for example, taking advantage of the Federal Government’s vast 

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59 

database around other need-based programs and simplifying the 

process for low-income students who have already been verified 

through other Federal means-tested programs. It’s one way of simplifying that. 

I think also if we go back to—I want to emphasize this—back to 

an oversimplified Federal form, it will complicate the process for 

low-income students. We’ve been here before, where every State 

had its own form, every institution had their own form, because the 

needs analysis from the Federal Government was not sufficient. 

The other alternative is to have students use documents like the 

College Board’s Profile Form, which is a fee-based form, which 

would be another barrier to low-income students. 

Ms. ADAMS. Thank you very much. I am out of time. I yield back. 

Chairman GUTHRIE. Thank you. I now recognize Mr. Allen for 5 

minutes of questions. 

Mr. ALLEN. Thank you, Mr. Chairman, and thank you, panel, for 

being with us today. 

Mr. Chingos, the current year statistics point that students are 

actually entering higher education, and obviously the result is that 

they do not really know exactly why they are there, or they would 

probably complete that education. 

In other words, you ought to begin with the end in mind, meaning that there should be a career path. That is the reason you get 

an education, is to get a good job. Everywhere I go in the school 

systems, I ask these students, why are you getting an education? 

A lot of them do not know why they are doing that. 

So, in your testimony, you state that there are five real loan crises, and none of them involve the $1.3 trillion in loan debt, the 

number we commonly cite. Why do you think this is the case, and 

how can we turn the narrative around to focus on solutions to 

these very high education challenges facing students and borrowers? 

Mr. CHINGOS. Thank you, Congressman, for the question. I think 

the way the narrative around student loan debt has evolved to 

focus so much on that $1.3 trillion number has as much to do with 

who is borrowing as how much they’re borrowing. 

How things have shifted over the last couple of decades is that 

in earlier years, Federal student loans were a targeted program. 

They were means tested for almost their entire history until the 

1992 reauthorization of HEA. The folks that borrow tend to be 

lower- and middle-income people. 

Now, it evolved to a point where high-income students were borrowing a lot, they were especially borrowing a lot to go to graduate 

school, and now the top fifth of the income distribution holds something like 40 percent of the outstanding student loan debt. 

So, I think what you’re seeing is relatively affluent, politically 

more vocal groups of people trying to represent their interests, 

which focus on the $1.3 trillion, getting forgiveness for large graduate loans, getting reductions in their interest rates, when the real 

problems are among folks who are struggling under small amounts 

of debt, low-income single moms who have a couple of credits at a 

for-profit college, a couple thousand dollars in debt. Those are the 

people we should be worried about, even though they’re not always 

the people who get heard the loudest. 

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Mr. ALLEN. You suggested that the current Federal Student 

Loan Aid Program is doing harm to students. Where do you see 

this the most? With the low-income population borrowing substantial sums of money to get an education? Where do you see the most 

damage here? 

Mr. CHINGOS. The real tradeoff we face here is between wanting 

to provide access to everyone and wanting people to make good investments that will pay off for themselves, because it’s their time 

and money, too, and for taxpayers. 

So, I’m very sympathetic to the need to provide as much broad 

access as possible, but, at the same time, there are lots of students 

going into programs with very poor track records of success, very 

high default rates. 

So, I think in the next reauthorization of HEA, it’s worth taking 

a hard look at what programs are eligible for students to use Federal dollars to go to them, and how do we hold them accountable, 

by also providing access to students. 

Mr. ALLEN. Ms. Conklin, as you are aware, the Federal Work 

Study Program received its funding through a complicated two part 

formula. Can you discuss whether you believe the current funding 

structure is appropriately targeting aid to needy students, and why 

this matters to the program’s effectiveness? 

Ms. CONKLIN. Thank you. It’s a good question, and I think it’s 

important to note that Technical Panel whose recommendations I 

represented today did call for consolidating Work Study into a Pell 

grant program, but I can see a path that looks like what the chairman described, one grant, one loan, one work study, but that work 

study would need to be reformed. 

Right now, again, the work study distribution is built on an old 

system. Not all institutions are eligible for it. We see a skewing of 

dollars that doesn’t look like need. Ten percent of work study families make more than $100,000 a year. Only 5 percent of public 4- 

year students are getting work study. 

Columbia University, for instance, is one of those institutions 

first into the program. They’re getting three times more money 

than Florida State, who has four times more students and many 

more Pell students. 

So, again, simpler targets our Federal dollars on the neediest 

students and the broad group of open access institutions that support them, so if we keep work study, let’s upgrade it for today. 

Mr. ALLEN. Thank you so much, and I yield back. 

Chairman GUTHRIE. Thank you. The gentleman yields back. I 

was at parent weekend at my daughter’s college in Chicagoland the 

weekend before the election. 

The best political ad I saw all season was this guy came on, and 

I said I am really going to like this guy, hope I never have to pronounce his name, because the political ad was about dealing with 

his name, but I am going to do it, and I appreciate it, and it was 

a great ad. 

It was my good friend from Illinois, Mr. Krishnamoorthi. You are 

recognized for 5 minutes for questions. That was a good ad. 

Mr. KRISHNAMOORTHI. Thank you, Congressman. Just call me 

Raja. Thank you so much. I am honored to be here, to be able to 

ask questions of you folks. 

CEWDOCROOM with DISTILLER

61 

I was able to attend college based on financial aid and loans and 

scholarships. You know, making postsecondary education more affordable and accessible is one of my top priorities, and I believe 

that financial aid should be enhanced if the cost of college is indeed 

a severe impediment to accessing postsecondary education. 

I have a couple of quick questions that I want to ask of you. Dr. 

Chingos, my constituents are telling me that colleges are spending 

a lot of money on fancy dining halls and rock climbing walls or unnecessary administration. How can we nudge these schools and institutions to lower the cost of college, which will give greater purchasing power to enhance Pell grants and other student aid? 

Mr. CHINGOS. Thank you, Congressman, for the question. I’ve 

heard those concerns as well. I think they do apply to a particular 

part of the higher education market. I don’t think at community 

colleges we’re seeing lazy rivers and climbing walls, so I think it’s 

important to bear that in mind. 

At the same time, I think we ought to be concerned about rising 

college costs. So, as Congress thinks about reauthorizing the Higher Education Act, you have to go back and worry about this Bennett hypothesis, as the chairman recognized. Are these programs 

making it too easy for colleges to raise their prices and spend 

money on things that students want? 

The problem is that to push back against that, you need to have 

the Federal Government getting involved and trying to create incentives for how institutions spend their money, so sort of a question over the Federal role there and the right way to balance those 

incentives with the need to provide these important financial aid 

programs to students that you mentioned. There is some tension 

there, I guess is what I’m saying. 

Mr. KRISHNAMOORTHI. There is a tension, but I do not want to 

burn up increased aid on increased tuition costs. That is my biggest 

concern, which is I am all in favor of increasing Pell grants, because I do believe they serve a very important role in allowing 

needy students to access higher education, but, at the same time, 

I am just concerned about the galloping costs of higher education. 

People in my district are really unable to save and afford college 

for their kids because it is just getting so far out of reach. I am 

trying to figure out what carrots and sticks the Federal Government can offer to make sure that costs of college do not rise at the 

same time we are increasing Federal aid. 

Ms. Conklin, I want to follow up what I just said with this statistic. In 2015, researchers from the Federal Bank of New York and 

Brigham Young University released a paper suggesting that 

schools raised tuition by 55 cents for each $1 increase in Pell 

grants that undergraduates received, and by 60 to 70 cents for each 

extra $1 of subsidized student loans. That is very concerning to me. 

Again, I want to enhance financial aid, and I want to make sure 

that our students have the tools to access postsecondary education, 

but I do not want it to be burned up in just increasing tuition costs. 

Can you comment on this, please? 

Ms. CONKLIN. Thank you for the question and for your interest 

and the representation of Americans concerned about affordability. 

It’s the top two, three concerns among Americans. 

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62 

What you have is the same concern that State policymakers 

have, and what State policymakers have, many of them have tuition-setting authority. So, we see in those States with tuition-setting authority, when they put caps or bans that look like increases 

in family income, we see a lower rate of tuition increases. 

That’s not something that the Federal Government can do. At 

the Federal Government level, again, we’re talking about getting 

rid of the Grad PLUS Loan Program with no loan limits at all, and 

what that does to pricing sensitivity in the market. We’re talking 

about sensible loan limit lengths, about 150 percent of the time, 

that puts some limits, but then we also talk about what’s the relationship. 

We did see in States that with the increase in the Pell grant program, the rapid increase in the Pell grant program between 2008 

and 2013, that a number of States increased community college tuition. 

Like in Alabama, where you had about a $27 a year increase between 2004 and 2008 to their community college tuition. Come 

2008, when we started to put more money into Pell, community college tuition was going up $280 a year. 

A lot of that is related to what the State was doing, and the 

States face Medicaid pressures and other funding priorities, but allin-all what you see is this spiraling tuition that if you saw the 

CNBC report this weekend, they said if you were born today, 18 

years later, it could cost half a million dollars to go to college. 

So, there’s a collective shared responsibility between the Federal 

Government, States, and institutions to really not just keep tuition 

at the rate of family income, but actually try to find ways to cut 

tuition and cut time. 

Mr. MITCHELL. [Presiding] Thank you. The member’s time has 

expired. 

Mr. KRISHNAMOORTHI. Thank you. 

Mr. MITCHELL. They have thrown a substitute in here. 

Mr. KRISHNAMOORTHI. You suddenly look different. 

Mr. MITCHELL. I know. Second verse, same as the first. Believe 

it or not, I recognize myself for 5 minutes as well. 

Dr. Chingos, let me talk to you a little bit about exactly your concern, which is the information crisis. I believe the information crisis goes deeper than just whether students know they have a loan 

or not. I think and I agree—Mr. Krishnamoorthi, I am going to 

agree with you. We do have a crisis on our hands, one of information needed by students to make a wise decision, students and families, on return of investment. 

Far too frequently, students going to college—like the tradition 

here, I was the first in my family to even see a college, my extended family, never mind graduating from college. 

You have to guess whether or not you are likely to succeed. You 

have to guess at whether or not you are lucky to get a job. You cannot get that information from most colleges or universities. That information is not there. That lack of information does not allow the 

consumer to make valid choices. 

Dr. Chingos, how do we get to a point where consumers are 

aware what the likely cost of attending college will be, and their 

likelihood of success? How do we get that information so they know 

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63 

that when they decide to become an architect at the University of 

Michigan, for example? 

Mr. CHINGOS. Thank you, Congressman. It’s a really important 

point that this information crisis extends well beyond that one statistic I mentioned. So, on the front end, because the aid process is 

so confusing and hard to navigate, people don’t know how much aid 

they’re getting from the Federal Government until they apply to 

college, fill out a FAFSA, and get aid offers. 

So, I think simplification—not simplifying the FAFSA, get rid of 

it entirely. Base these people’s aid awards on the average family 

income when they were growing up, say from age 10 to 16, put that 

money in an account and tell them at age 16, no forms, no priorprior year, here’s how much you are eligible for. So, I think we can 

fix it on that side. 

But you’re right, we also need better information on the other 

end. How much can I expect to make, and will I be able to pay my 

loans if I go to a particular college or program of study? 

I think the Obama administration made important advances 

there with the College Scorecard, providing information at the institution level. I think we can go a step further, as many States 

have, provide that information at the level of program of study 

with data that already exist and can easily be approached. 

Mr. MITCHELL. Let me suggest, I spent 35 years, my entire professional career, in workforce development and postsecondary education. We reported every year completion rates by program, by location, the employment by program, by location, the wage they 

made by program, by location, for 19 campuses. 

You cannot find that information out in most public universities 

and colleges for a program. You can get aggregate information. 

So, I guess, Mrs. Copeland-Morgan, how do we get universities 

to understand that information is critically needed by consumers to 

make wise decisions so they can be in control, frankly, rather than 

administrators and the Federal bureaucracy being in control? 

Mrs. COPELAND-MORGAN. Thank you for your question. Many 

universities do surveys. The response rates are not necessarily 

where they need to be, but I think that we can certainly incentivize 

institutions to get that information. It is in our best interest to 

make sure that students understand what the labor market will be 

for them once they are pursuing those majors. 

I would go back to the front end in terms of simplification. We 

often think of that as being a form, but I agree, and some of the 

work by Susan Dynarski shows us that early notification of eligibility for financial aid is key, not only to access, but in terms of 

the retention of those students. 

There is a lot of research that shows us intergenerational transfer of poverty, so the idea of doing a needs test via the FAFSA or 

other methods each year also complicates the process. 

So, I certainly have found in almost 40 years of being an aid administrator that for my low-income students, they don’t suddenly 

get rich the next year, so another area of simplification is not just 

the front end, but in terms of helping those students to stay in our 

institutions and graduate, incentivizing institutions— 

Mr. MITCHELL. Let’s talk about graduation rates for a moment. 

I think the data that Dr. Chingos put forward, and I am running 

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out of time here, is critically important. The average completion 

rate for a community college is 39 percent. Now, as I said, I led 

a group of private career schools, and the accreditation standard 

was 70 percent or you no longer were able to be a viable institution. 

How is it when you talk to students when they go to community 

college about the likelihood of succeeding, they do not have that information along with how much they borrowed? That lack of information, I think, we are all responsible for making sure it is communicated effectively to students, what the likelihood of success is 

and how we help them to succeed, but they need to know to make 

that investment. 

They are borrowing money right now at a guess they can succeed 

and move their career forward on a hope and a prayer because they 

do not have information, and we are all responsible in this room 

for making sure we have better information, and that puts them 

in control rather than institutions, rather than bureaucrats. 

My objective on this committee, in fact, is to focus on that. My 

time is up, and I will recognize the next member. Thank you. Mr. 

Polis, you are recognized for 5 minutes. 

Mr. POLIS. Thank you. I want to begin by thanking our chair and 

ranking member for holding the hearing. Frankly, the timing of the 

hearing is excellent. 

It was only last week when President Trump and Secretary 

DeVos put an end to a prohibition on certain fees on student loans. 

After being in office only a few weeks, President Trump and Secretary DeVos have actually increased the cost to student loan borrowers. 

So, clearly, any progress on this area will have to be made by 

Congress, which is why I am excited that we are having today’s 

hearing. I also want to point out that of course we all agree there 

are ways to make financial aid simpler for students and families. 

I think we can do that together. 

I was encouraged to hear Chairman Guthrie say that simplifying 

financial aid does not mean cutting it, because, unfortunately, the 

one grant, one loan proposals we have seen also happen to reduce 

the overall Federal investment in financial aid. 

So, again, those two are not mutually exclusive, but so far the 

proposals we have seen, like the President’s proposal to eliminate 

the Supplemental Educational Opportunity Grants, do not suggest 

that money is reinvested in actually helping to make college affordable. 

The truth is that I hear across my district, as so many other representatives do, that students and families have already a hard 

enough time paying for college. Cutting the amount of financial aid 

is not going to make it easier to attend college. 

My first question is for Youlonda Copeland-Morgan about income-driven repayment plans, which I feel are essential for borrowers who are not able to afford monthly payments under a standard repayment plan. 

Right now, there is an excessive amount of income-driven repayment plan options that often leaves borrowers confused or not enrolled about what might be best with their own budgets. 

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How can we simplify repayment plans while ensuring borrowers 

have generous terms, and can you talk about the different protections provided by income driven repayment plans? 

Mrs. COPELAND-MORGAN. Thank you for the question, Congressman. I would really encourage the committee to think about income 

repayment plans being the base, the default repayment plan for 

students. As you’ve heard, many of the students who are in default 

have very small amounts of loans. The requirement that students 

have to verify their income every year is burdensome. Students forget about it. 

Again, when you look at the intergenerational transfer of poverty 

or for many of our students who go into service areas working as 

teachers and other professions of service, I think we could use the 

IRS data and other kinds of data that’s i accessible to the Federal 

Government to prevent some of those defaults. 

Mr. POLIS. It sounds like what you are recommending is either 

universality of income-based repayment or an opt-out of incomebased repayment. Ms. Soucier, do you agree with that statement? 

Ms. SOUCIER. Absolutely. 

Mr. POLIS. I also want to ask about flexibility for Pell dollars. In 

my district, we have Colorado State University in Fort Collins. We 

have seen the number of Pell-eligible students enrolling in summer 

programs double when they were able to use Pell dollars over a 

summer term. 

Unfortunately, that flexibility no longer exists, and students who 

depend on Pell dollars only use them in the fall and spring semesters, therefore, increasing the time it takes for them to reach graduation. 

Almost every time I meet with students in my district at universities like CSU and CU and community colleges, like Colorado 

Mountain College or Front Range, one of the first things I hear is 

restore year-round Pell. 

I know many of us are optimistic that we can use some of the 

additional dollars in the Pell reserve towards improvements in the 

Pell program like year-round Pell, and I was hoping, Ms. CopelandMorgan, you could speak to the benefits of year-round Pell. 

Mrs. COPELAND-MORGAN. Thank you again. I think year-round 

Pell is one of the most positive things we have done in the financial 

aid program. It allows students to accelerate their time to degree. 

Oftentimes, students are staying in an additional full year when 

they could graduate in the summer by taking one or two courses 

that they need. I was one of those students who took the fourth 

year of financial aid when I only needed six units. 

I would really encourage the committee to look at the maximum 

Pell award, increase the maximum so that it does allow a student 

to take full advantage of the opportunity to go for summer, and I 

think that would be a good use of the surplus that we see in the 

Pell program at this time. 

Mr. POLIS. Last Congress, I joined a number of colleagues introducing legislation allowing students to use prior-prior year tax data 

when completing a FAFSA. The Obama administration made that 

change, but we are now in a period of time where the Trump administration seems to be undoing a lot of things that the Obama 

administration did. 

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So, I think we should have more concern than ever to simply put 

that change in statute rather than leave it up to the whim of the 

administration. 

Just as an example, in Colorado, FAFSA completion rates increased substantially this fall after students were able to fill out 

the FAFSA earlier. 

I just want to end, since my time is up, by encouraging this committee to put that large noncontroversial step in statute to prevent 

it from being at the whim of the Secretary or President. It is a commonsense measure that makes it easier to fill out that form and 

apply for student aid, and to find out what you are getting, and I 

am happy to yield back. 

Chairman GUTHRIE. [Presiding] Thank you. I appreciate the gentleman yielding. I now recognize Mr. Lewis for 5 minutes for questions. 

Mr. LEWIS. Thank you very much. As a parent who annually fills 

out the FAFSA forms, I can tell you this is a much-needed hearing, 

and I appreciate everybody attending today. 

Let me start at 30,000 feet here with Mr. Chingos for a moment. 

One of the oldest rules in economics or the insurance industry or 

anything in regard to finances is the third-party payment rule or 

the moral hazard. When we see third parties come in—frankly, we 

are debating this in health care right now, but it could be any particular commodity, it is certainly true in higher education, when we 

see third parties come in and assume the costs, what we see in 

many cases are inflated costs. 

So, if tomorrow, all of a sudden, somebody said, gosh, for every 

cup of Starbucks you buy, the Federal Government is going to issue 

you a Starbucks grant, and it is going to cover $3 of the cost of a 

pound of coffee or whatever. I will take the bet that the pound of 

coffee price is going to go up, and it is going to go up because the 

providers know there is a subsidy. 

We have seen a massive increase in tuition at 4-year liberal arts 

schools and for-profit schools; across the board, we have seen an increase. The big picture for me is how do we provide the need that 

is there without inducing this moral hazard? 

The cost of attending a 4-year public institution has increased by 

more than 40 percent in just a decade. The only thing rising faster 

than tuition are textbooks. So, we have a situation here where everybody is talking about, oh, gosh, we have to make it easier for 

folks to borrow, we have to decrease the cost of borrowing, let’s 

make more student loans, more Pell grants. Pell grants alone have 

skyrocketed. I do not have the figure right in front of me here, but 

to, what, $30 billion? 

We are inducing the moral hazard here, so how do we provide 

a program, Mr. Chingos, that (a) provides what we want for access, 

but (b) does not induce this moral hazard? 

Mr. CHINGOS. Thank you, Congressman. I think you accomplish 

that goal by having programs that are targeted and narrowly tailored to particular Federal interests, such as helping low-income 

students go to college. 

To go back to your Starbucks example, if only 1 in 10 customers 

got that Starbucks grant, it is going to be harder for Starbucks to 

raise the price, because 9 out of 10 customers coming in the door, 

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they don’t know they have that grant. If we give everyone enough 

of a grant to get up to the most expensive cup of coffee you can 

get, then you have to be more concerned about that. 

I think by being targeted, by focusing on students who have been 

historically underserved, you accomplish both the goals of helping 

them and of limiting the moral hazard problem that you highlighted. 

Mr. LEWIS. Has the tripling of the Pell grants from $13 billion in 2006 to $36 billion in 2010 added to that? 

Mr. CHINGOS. I mean, I think we ought to be most concerned 

about Pell grants at the places that enroll large numbers of Pell 

grant students. At an institution that has a relatively small number of Pell eligible students, it’s going to be harder for them to 

raise prices, to extract that money, whereas at institutions that 

rely almost entirely on aid, I think we have to be more concerned 

and think about the right way to balance access to those institutions with whether it’s the best use of Federal resources. 

Mr. LEWIS. Ms. Conklin, a question for you on simplification, I 

think we moved up the FAFSA time periods now, so you can fill 

them out earlier, so I get to do that and my taxes right away, so 

the first of the year gets off to a rousing start in the Lewis household. 

Again, from a more global perspective or 30,000 feet, we have a 

program in Minnesota that offers aid in higher ed that you do on 

your tax return. In a perfect world, talking about simplifying, talking about a three tier, if we are going to do tax reform in fiscal 

year 2018, we hope, is there a way to just to really simplify this 

down to a 1040? 

Ms. CONKLIN. There certainly is. What we have recommended in 

our Technical Panel, and it actually mimics what the College Board 

offered 10 years earlier, it is what Susan Dynarski has analyzed. 

Poor is poor, and assets aren’t really a factor for low-income students; we only ask for that because we subsidize loans. If we didn’t 

subsidize loans, we wouldn’t need all that income and all the asset 

data. 

So, what we should do is ask for the data we already give to the 

Federal Government. There is a Gates paper, if you want to keep 

your subsidized loan program and you want to keep that information, you still just stick to what is already provided in the IRS tax 

forms, with a schedule and basic adjusted gross income. 

Other than that, we are over asking the same questions, and we 

are asking students to be financial managers, and that’s not reasonable. 

Mr. LEWIS. Conceivably, you could do it? 

Ms. CONKLIN. Absolutely. We have recommended if you have already qualified for a Federal means tested program across the Federal Government, why do you go through this process again to certify you’re poor? You might already be kind of put to the front of 

the line as an eligible student. 

Mr. LEWIS. I thank the panel, and I yield back. 

Chairman GUTHRIE. Thank you for yielding. I now recognize Mr. 

Sablan for 5 minutes for questions. 

Mr. SABLAN. Thank you very much, Mr. Chairman and Ranking 

Member Davis, for having today’s hearing. Welcome, everyone. As 

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an original cosponsor of SAFRA, I also find this hearing today very 

timely. 

In my district in the Northern Mariana Islands, we only have a 

small community college with a little more than 1,000 enrolled students. A large majority of the students come from low-income families. 

Dr. Chingos, sir, over 90 percent receive Pell grants, so making 

it possible to pursue their higher education aspirations. And the 

minimum wage, sir, is $6.55 an hour, and you cannot get in a car 

and drive across a county line to go to college elsewhere. It is going 

to be very expensive. 

So, the President recently released budget would cut $3.9 billion 

of the funding currently reserved for the Pell grant program, and 

leaves the program on an unstable footing for future generations. 

On top of that, the majority of this committee have also separately 

proposed to eliminate funding. As stated in the budget, the estimate for fiscal year 2018, the proposal will eliminate all of Pell’s 

mandatory funding. 

I strongly believe the continued success of people in my district 

and the Northern Marianas, and in our country, lies with the ability to train our citizens through higher education to be productive 

members of our society, and this money that the President and the 

majority are trying to take away from needy college students is 

necessary to ensure Congress can continuously modernizes and 

strengthen the program to better support students. 

Instead of cutting or reducing student financial aid, we should be 

investing in this program. 

Mrs. Copeland-Morgan, how can the Pell grant program be 

strengthened and not weakened? 

Mrs. COPELAND-MORGAN. Thank you, Congressman. The program could be strengthened by increasing the maximum award. 

The Pell grant is only paying about 19 percent, the average award 

is only paying about 19 percent of costs for students. 

It can be strengthened by continuing to target the funds to the 

most neediest students. 

I will add that a lot of committee members have been concerned 

about institutional behavior. Incentivizing institutions who are enrolling and graduating Pell grant students will help to change some 

of that behavior. I encourage you to look at that. 

Year-round Pell is key to acceleration. It is costly for students to 

hang around our institutions for an additional year when if they 

had a Pell to take those extra three to nine units, they could be 

out in 4.1 years rather than 5 years. I think you are hearing a 

theme here across all of the witnesses today that year-round Pell 

along with prior-prior year have been good movements toward simplification. 

Mr. SABLAN. I have one more question, Mrs. Copeland-Morgan, 

if I may. I have recently heard from some of my colleagues on the 

majority that Congress should create programs to target middle-income students and not low-income students because low-income 

students are already taken care of by grant aid. 

Is this what you see in your institution, your University of California, and around the Nation? 

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Mrs. COPELAND-MORGAN. That has not been the case in the 40 

years that I’ve been in higher education. Sixty-one percent of Pell 

grant recipients borrow to complete their degree compared to about 

a little less than a quarter of non-Pell recipients. 

So, the Federal investments in campus-based programs, for example, subsidized loan programs, are very key for completion of 

these students, and I might add that at the University of California, again, we see 4-year graduation rates are amongst the highest in the country, 76 percent, and 6-year graduation is 92 to 93 

percent; system-wide, 86 percent. The 92 to 93 is at UCLA. 

Yet, we are 40 percent first-generation college students, and most 

of our campuses are anywhere from 35 to 45 percent Pell eligible 

students. 

Mr. SABLAN. Thank you. Actually, I am very happy because my 

daughter graduated 2 years ago, my son is getting out in May. 

Thank God, because people back home say if you are a child of 

someone in Congress, then Congress pays for your child’s education. I do not know where they hear that. I really think it is Fox 

News, because that is the only news we have, unfortunately. It is 

true. It is fake news, right? 

Chairman GUTHRIE. Thank you. The gentleman’s time has expired. 

Mr. SABLAN. Thank you, Mr. Chairman. I yield back. 

Chairman GUTHRIE. I now recognize Mr. Messer for 5 minutes 

for questions. 

Mr. MESSER. Thank you, Mr. Chairman. Thank you to the panel. 

Obviously, a very important issue today as we work through what 

we can do to improve Federal student aid. We have talked a lot 

about student borrowing. 

Many on the panel are probably well aware, but according to a 

recent Brookings Institute study, too many students just do not 

know how much they are borrowing. I think it is part of what contributes to the high dollars that students do borrow. 

According to the study, roughly 28 percent of students with Federal loans said they had no Federal loans at all, and 14 percent 

said they had no debt at all, even though they had student loans. 

Based on these statistics alone, it is clear that somewhere along 

the way we failed to communicate to students how they are financing their education and what that means for their future. 

The Higher Education Opportunity Act of 2008 required the Federal Reserve to reform the private student loan disclosure form and 

use consumer testing to improve it. As a result, today we have a 

private student loan disclosure that gets down to brass tacks. It 

clearly and boldly discloses things like total loan amount, the interest rate, total payments made over the life of the loan, and other 

disclosures that are essential for a student to know before they 

take out a loan. 

Contrast that, on the other hand, with the Federal Master Promissory Note, the MPN, I think it is technically called, which is used 

as the primary contract for all Federal student loans. It is an 11- 

page fine-print document that is incomprehensible unless you happen to specialize in higher ed finance. 

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Ms. Soucier, I was going to ask you, do you think consumer testing of the Federal Master Promissory Note paperwork and other 

disclosures like it would make those forms more useful to students? 

Ms. SOUCIER. Absolutely. I think we need not just more information out to the students, but we need it more often. Students are 

required to get entrance loan counseling at the start of getting 

their loan. They are getting that loan at 17, 18 years old, when 

they don’t understand, they’ve never received any debt, they don’t 

understand what they’re reading. 

So, what we need to do is we need to give it to them more often, 

and we need to be able to require it before they receive funding. 

For us, it would be every semester. Some schools, they may only 

need it every year. I think we need the flexibility based on student 

population to require them to come in and get additional information, both in writing, in person, online, by video, however we can 

get the information to them so they can understand what it is they 

are getting. 

Mr. MESSER. I will give you a practical answer from Indiana University in my home State. They put together essentially a letter of 

notice to students, that every year in the fall, it went to each student at IU and disclosed what track they were on as far as student 

borrowing, and what the cost of their education would be if they 

continued on the same track. 

They saw that student borrowing went down as much as a quarter to a third just by simply every year sending a clear, readable 

letter that notified those students of what their debt path was. 

We are working on legislation that would make that national. It 

has already been a law in Indiana that now applies to every university, not just Indiana University, and we are hoping we can take 

that national. 

My next question in the limited time I have left is for Ms. 

Conklin. You mentioned in your testimony that you think aggregate Federal student loan limits should be reduced and simplified. 

You went on to imply that any void in lending created as a byproduct of that could be filled by private financing like income share 

agreements, if the appropriate incentives are created to serve low 

asset individuals. There is a Purdue program that has been sort of 

cutting edge nationally. 

Could you explain some of the types of incentives that could encourage income share providers to serve low asset borrowers like 

Pell grant students? 

Ms. CONKLIN. Thank you, Mr. Messer, for your question. One 

point of clarification. The proposal of the Technical Panel actually 

called for an increase in loan limits for undergraduates and graduates, just one set per. That is an example of some of the savings 

in our simplification, that we reinvested for students’ benefit. 

On the issue of income share agreements, it is a promising new 

private financing vehicle whereby an investor can identify students 

who are able to repay their loans based on a share, like 5 percent 

of their income, and if they’re not able to make that income, they 

don’t make those payments. So, it’s a pure income-based payment 

program. 

But it’s going to create incentives with colleges to be able to 

make sure they are focused on the returns and those labor market 

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returns, which we heard was important to the committee earlier. 

It’s going to cause students to need that information that we’ve 

been talking about that is so important, about choosing programs 

carefully, about borrowing carefully, and about using your time 

well. 

So, it’s going to bring, I think, more transparency. It’s not in lieu 

of the loan programs we have, but particularly at the graduate 

level, I think, there is just real promise. 

Mr. MESSER. Thank you. Income share agreements are not the 

answer for everybody, but I think they are the answer for more 

people than are currently being served by them now. Hopefully, we 

can make some headway on that issue in the coming weeks and 

months. 

I yield back to the chairman. Thank you. 

Chairman GUTHRIE. The gentleman yields back. I now recognize 

Mr. Takano for 5 minutes for questions. 

Mr. TAKANO. Thank you, Mr. Chairman. Before I begin, I would 

like to say a few words on this idea that we cannot increase financial aid because some people think that is what causes tuition increased, the so-called ‘‘Bennett hypothesis.’’ 

First, the best studies on this find that it is not the case at public 

and nonprofit colleges. However, we do have quality evidence showing this does occur at for-profit schools, which strongly suggests 

that we need better oversight of this sector. 

More importantly, we need to take a step back and reject the 

cynicism that this idea implies. By all means, let’s look for ways 

to make tuition more affordable, but let’s not throw up our hands 

and say we should not increase aid because of, I think, the misleading indications of this theory, the Bennett theory. 

Mrs. Copeland-Morgan, many of my colleagues on the other side 

of the aisle believe that financial aid, including Pell and Federal 

loans, have driven the increase in tuition. In all your decades of experience working at various institutions, has this ever been the 

case? 

Mrs. COPELAND-MORGAN. Thank you, Congressman. It has not 

been in my experience. I know there is a small amount of research 

that shows there may be a correlation between increases in aid in 

the for-profit sector, and I think simple oversight, greater oversight 

of that area, where those schools are not graduating Pell recipients 

and low-income. 

But I think you find partners in 4-year higher education institutions, and I would encourage, therefore, greater investment, particularly again for those who are serving disproportionate numbers 

of low-income and Pell grant recipients. That, I would say, also includes the campus-based programs, and we have not talked much 

about Perkins loan today, which you know will come to an end this 

September. 

The Federal Government has not invested in Perkins loans for 

over a decade, and I would really encourage the committee to consider legislation that would allow institutions to continue to award 

under the Perkins Loan Program, which is a better option than private loans for these low-income working families. 

Mr. TAKANO. Thank you. Does institution leadership make decisions based on these increases in aid? 

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Mrs. COPELAND-MORGAN. Again, I think that bit of research is a 

distraction from the bigger issue of investing in our young people 

so they can achieve their career goals. I’ve not sat around the table, 

that’s not been my experience. 

I think as some of your members have mentioned, overwhelmingly, and you two in your opening comments, overwhelmingly, 

public institutions and many private institutions, the not-for-profit 

private institutions, are also investing their own dollars in financial aid programs. 

The UC system, for example, a third of our tuition revenue goes 

right back into grant programs for low-income students. So, that’s 

not been my experience. 

Mr. TAKANO. What in your estimation does drive the cost of tuition, in a nutshell? 

Mrs. COPELAND-MORGAN. Well, if there is insufficient aid for students, certainly again, at the University of California system, we 

put a third of our financial aid back into financial aid programs. 

I think the cost of technology, quite frankly, today, as someone 

who has gone through no technology to the technology we see 

today, is a big driver. I think the students are interested in multiple disciplines, and certain interdisciplinary education is more 

costly. I think institutions are trying to find ways to deliver a quality education in a more cost-effective way. 

I know I spend probably 30 percent of my time in those kinds 

of conversations. That might be one area that the committee can 

spend more time talking about, how do you help institutions in 

that area to keep costs affordable so we can serve more students 

and graduate our students earlier? 

Mr. TAKANO. Mr. Chingos, you mentioned in your earlier testimony institutions that primarily rely on financial aid. Are you referring to the for-profit college industry as one of those categories 

of institutions? 

Mr. CHINGOS. Sure. A lot of them. 

Mr. TAKANO. Increased Federal aid does seem to be linked to increases in costs at those institutions. Is that what you are referring 

to? 

Mr. CHINGOS. There is some evidence to indicate that’s the case, 

as several folks have mentioned today. 

Mr. TAKANO. Ms. Conklin, can you comment on your own Pell 

grants as far as how they might help students before their freshman year in college and after their senior year? Do we know much 

about these summer bridge programs to increase preparedness, you 

know, to be ready for college, with English or math? 

Chairman GUTHRIE. The gentleman’s time has expired. 

Mr. TAKANO. My time has expired. 

Chairman GUTHRIE. Hopefully, within some questions, you will 

be able to get an answer. That is a good question, but, unfortunately, your time has expired. 

I now recognize Mr. Smucker for 5 minutes for questions. 

Mr. SMUCKER. Thank you, Mr. Chairman. I appreciate the opportunity to be part of this hearing. I am a father of two girls who 

are in college, so I went through this process. I must admit, I was 

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73 

ate and served as one of the directors on PHEAA, the Pennsylvania 

Higher Education Assistance Agency, and I still found it confusing. 

I think it is overdue to simplify and create a more efficient system. I look forward to being part of that discussion. 

Mr. Messer asked questions in regards to student knowledge 

about the loans they have taken out, the provisions of those loans, 

and so on. I would like to take that a step further. 

I think one of the things we do not do very well in our system 

of higher education is provide information to students about the 

earnings potential for a specific major, maybe earnings potential 

for a specific major at a specific school. 

At the end of the day, you are taking out the student loan with 

the hopes of being able to pay that back. It is an investment. I do 

not think from what I see we do a very good job of educating students about their ability to repay. 

Maybe I will start with you, Mr. Chingos. I would like to get your 

impression on that, and I would like to ask what your impression 

is of how we do on that, and whether if we are talking about reconfiguring our Federal student aid system there would be a way 

to tie in additional information in regards to the ability to pay back 

based on the major a student is choosing? 

Mr. CHINGOS. Thank you for the question. I think it is critically 

important that students have better access to information and 

what they can expect down the road when they’re deciding where 

to go to college, how much to pay, how much to borrow. 

I think some progress has been made. A couple of years ago, we 

didn’t know for the whole country average earnings for each college, and now we have that through the College Scorecard. We do 

need to go one step further and get that information down to the 

program level, which some States have done, but we don’t have it 

at the national level yet. 

Then we can think about as we are thinking about counseling 

around borrowing and repayment finding ways to get that information to students. 

Some research we are doing at the Urban Institute suggests that 

you can’t just build it and they will come. You can’t just put the 

information out there. You have to think about how to make it intelligible to students, how do they know what a $45,000 starting 

salary means for what they can expect to borrow. There is progress 

to be made. 

Mr. SMUCKER. Do students currently get any of that information 

as a part of the application for assistance? 

Mr. CHINGOS. Not that I’m aware of. 

Mr. SMUCKER. Would there be a way to link those in some way? 

Mr. CHINGOS. I think through disclosures. One of my colleagues 

might be able to better address this, doing the work on the ground, 

but I imagine there would be. 

Mr. SMUCKER. Anybody else care to address that? 

Mrs. COPELAND-MORGAN. I would just mention that in our career 

centers, we do provide this information. We do survey our graduates after they graduate, 5 and 10 years out, and I think that is 

probably an area that we can do more in. I agree, certainly technology allows us to provide more links for students in that regard. 

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Ms. CONKLIN. Mr. Smucker, Ms. Soucier works in a State, Texas, 

that is one of the States that is innovative in linking their labor 

market data with their postsecondary student data. 

So, at the State level, they have demonstrated the leadership to 

create these metrics. The State makes them publicly available to 

students, and then community organizations, high school counselors, can provide that information to students in a variety of 

ways, but the State has taken on the role to make that transparent. That’s an example of progress, I believe. 

Mr. SMUCKER. Thank you. I am just going to shift gears. I have 

a minute. Ms. Soucier, your written testimony specifically mentioned the gainful employment regulation and how it can ultimately harm today’s students. 

In about 55 seconds, could you expand on that briefly? 

Ms. SOUCIER. I’d be happy to, thank you. My biggest concern— 

we spend a lot of time trying to comply and report the information 

being required. We’ve spent hours and hours with our technology 

groups doing that. 

What my biggest concern is—our Workforce Office does a great 

job working with business and industry around Houston to create 

programs to get students trained into certain jobs, and my concern 

is if the data isn’t fully accurate or doesn’t fully represent the program, that it could make programs in jeopardy of being disbanded 

after they put so much effort in creating the program. 

Mr. SMUCKER. I would be interested in continuing that discussion with you at a later time. Thank you. Thank you, Mr. Chairman. 

Chairman GUTHRIE. The gentleman yields back, and I recognize 

Ms. Blunt Rochester for 5 minutes for questions. 

Ms. BLUNT ROCHESTER. Thank you, Mr. Chairman and Ranking 

Member. I really want to thank this panel. This hearing was really 

interesting and exciting, even if you do not think it is exciting. It 

is exciting to me. 

I come from the State of Delaware, so I represent the entire 

State. The issue of college affordability was talked about up and 

down the State, particularly as we talk about strengthening our 

economy. It’s connected to everything. 

I particularly liked the five crises, Dr. Chingos. That was pretty 

interesting to me, when I think a potential crisis is a cut to these 

programs. That’s another potential crisis. 

My question is directed to Mrs. Copeland-Morgan. It is basically 

a recent report by the National Center for Education Statistics 

found that one in five undergraduate students surveyed in their 

study did not seek out any form of financial aid. 

When students were asked why, the majority of them cited misinformation. Forty-four percent thought they were ineligible for aid, 

and another 43 percent thought they could afford college without 

the help. This tells me that there is a lack of information on the 

part of students and families on how financial aid works and the 

true cost of going to college. 

How can Congress ensure more students are receiving the needed information to make informed choices post high school? 

Mrs. COPELAND-MORGAN. Thank you for your question. I think 

early outreach is key. Investment in programs like TRIO and 

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GEAR UP, the funding of Perkins loan, which we use those dollars 

also to administer loan programs, Federal work study, we deploy 

students into communities to help get that word out about financial 

aid. 

I mention those to say that the Federal aid programs, particularly like work study, allow us to get that message out to those 

communities most in need. 

I think simplification of the FAFSA, and when we simplify it, put 

that information out there early. I call it ‘‘baby college,’’ that students would know from the time of birth they are eligible, particularly the low-income students, again, where they have been 

through need-tested programs or we use IRS data to understand 

what their income is. 

So, it is a concern. I think probably many of you as first-generation probably experienced this as well, but the investment in outreach programs are key, and right now, many of those programs 

are subject to cuts as well. 

Ms. BLUNT ROCHESTER. I follow up on that to say I, like many 

of my colleagues up here, have two children that went through the 

whole process with FAFSA. I have seen the changes, promissory 

notes, all of that, and myself participated in work study programs. 

It is complicated for almost everyone. To see the bipartisan conversation is a positive. 

My second question is for you as well. As our country fully shifts 

from an industrial economy to a knowledge-based economy, higher 

education has increasingly become the surest way out of poverty. 

You talked a lot already about the goal of coming out of poverty. 

Now, more and more jobs are looking for workers that graduate 

with master’s degrees and doctorate degrees, respectively. Twentytwo percent and a 20 percent increase in the number of those. 

We are hearing about proposals that would limit graduate students from accessing Federal dollars. What can the Federal Government do to continue to provide access to capital for individuals 

wanting to pursue graduate degrees? 

I actually served as Secretary of Labor in my State, so I understand the correlation between education and jobs, and also, I was 

pleased to hear the conversation about labor market information as 

well and connecting that to what we are doing at the university 

level. 

Can you talk a little bit about that? Anyone on the panel. We 

have 53 seconds. 

Mrs. COPELAND-MORGAN. I would just say, historically, grant 

programs have been targeted to undergraduates and less investment has been made at the Federal level through the Federal loan 

programs for graduates. And if we’re going to meet the technological advances and the ingenuity that’s needed for our society 

today, we have to provide a financial investment way, a pathway, 

for students to continue their education so they can get those graduate degrees and become productive, contributing members of our 

labor market in that regard. 

Ms. BLUNT ROCHESTER. Other members? 

Ms. CONKLIN. I think I want to echo what the chairman said earlier about simplification does not equate with cutting in the perCEWDOCROOM with DISTILLER

76 

spective that I have, and that this Technical Panel I represent here 

today has. 

We recommend again one set of annual and aggregate loan limits 

for graduate students, and they increase. So, you could borrow 

$90,000 through the Federal program to support your graduate 

education and training. That would be added to your undergraduate loans, for a maximum of $125,000. That would be the new 

umbrella that we’re offering. 

Ms. BLUNT ROCHESTER. Thank you. I yield back. 

Chairman GUTHRIE. Thank you for yielding back. I recognize Mr. 

Grothman for 5 minutes to ask questions. 

Mr. GROTHMAN. Sure. We mentioned the Pell grants a little bit 

before, and maybe I will direct this to Ms. Conklin, but anyone else 

can jump in if they want. 

I think the Pell grant program and other programs have been 

subject to criticism even when I was in college by the middle class. 

People get tired of the American government hating the middle 

class, and they have to kick in for their kids’ programs, so their 

kids have to take out loans. Well, maybe kids from some other families seem to get things for free. 

Do you think one way to deal with this problem would be to say 

no Pell grants in your freshman year? At least for the freshman 

year have the kids who are not in the middle class take out loans 

like the kids in the middle class already have to, and that way you 

could make sure that everybody who is going to college, after they 

at least get through the first year, are more serious about college. 

Do you think that would be a fair thing to do? 

Ms. CONKLIN. Congressman, I think what you’re asking is if 

there is a Robin Hood effect in higher education, where middle 

class and upper middle class people are paying for poor people, and 

who aren’t ready for college. Am I understanding your question? 

Mr. GROTHMAN. Well, just the unfairness, the resentment. I 

know in many ways in this country we hate the middle class. We 

love the rich. We love the poor. We hate the middle class. 

Sometimes they use these Pell grants for goodies and electronics, 

and they resent the fact that by doing it right, their kids are penalized. 

Ms. CONKLIN. One thing that we struggle with is the Pell grant 

is a tangible voucher and it’s a target. I grew up in California, 

went to a public college. Keeping tuition low in a State is the largest subsidy of middle-class students we have in the State of California. Keeping the University of California affordable and accessible is a very large middle class subsidy. 

So, the middle class in California as part of higher education is 

heavily invested in it. At the University of California at Berkeley, 

where I think one of our members is a graduate, the average family income is higher than Stanford, but tuition is heavily subsidized 

by public taxpayers. 

So, I think the middle-class angst is targeting a Pell grant program, which was shown to be pretty effective at getting students 

to enroll, when really the hidden subsidy to middle class is we keep 

our public tuition low. 

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Mr. GROTHMAN. I think that subsidy sometimes leads us to excess academic staff, but I suppose it also—you did not say benefits 

the students. Again, I am going to come back. 

Do you think it would be fair—if tuition is low for everybody, 

would it be fair? Right now we have an unknown number of people 

who are getting Pell grants who will not graduate, and I think to 

make sure that we are not wasting the money, it might not be a 

bad idea to have people at least in the first year take out loans 

rather than grants. That was kind of my question. 

We will move on to the next question. I received anecdotal evidence in my district of people not getting married because, of 

course, if you do not get married, it is easier to be in poverty and 

get Pell grants. Would you care to comment on that? Anybody can 

comment on that. I have heard it from several people. You are the 

experts. 

Ms. SOUCIER. I’d be happy to comment on that. People are making personal decisions based on financial aid eligibility. We know 

that. We know people who have gotten divorced because it would 

be more beneficial for those students to qualify for aid. Is that what 

you’re asking? 

Mr. GROTHMAN. Exactly. Is that not horrible, the way our government—like Karl Marx said, we just want to destroy the American family? 

Ms. SOUCIER. Again, it goes back to your comment about the 

middle income, who feel like they’re not getting treated as well in 

terms of Federal funding. It goes back to that. 

If you have two middle-income families come together, they don’t 

qualify for aid, but a single parent would in that same circumstance. So, they’re making that decision based on qualifying for 

eligibility. 

Mr. GROTHMAN. I will give you one more question, just to make 

sure we are on the same page here. As I tour my trade schools and 

see people want to become a carpenter’s apprentice when they are 

28, after they realized their college degree was a waste, or people 

go back and become welders when they are 33, college was a waste. 

We all agree that we have too many people going to college now. 

You all agree with that? 

Mrs. CONKLIN. What’s the definition of ‘‘college?’’ As I use it, it’s 

any education and training after high school. It’s that air-conditioning certificate program. That’s college to me. 

Mr. GROTHMAN. Let me put it this way, do we have too many 

people going to 4-year college? 

Mrs. CONKLIN. We are under producing certificates in this country in sub-associate credentials. 

Mr. GROTHMAN. In other words— 

Mrs. CONKLIN. We need to create really good pathways to 

those— 

Mr. GROTHMAN. Could you just say it for me? 

Chairman GUTHRIE. Your time has expired. I would like to recognize Mr. DeSaulnier for 5 minutes for questioning. 

Mr. DESAULNIER. Thank you, Mr. Chairman. I want to thank you 

and the ranking member, a proud graduate of the University of 

California at Berkeley, Ms. Davis, for this hearing. 

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I cannot think of many things that for the long-term health of 

this country is more important than figuring this out. Coming from 

the Bay Area, what I get from both researchers and people from 

the private sector, as opposed to the last interchanges, more people 

who have bachelor’s degrees and graduate degrees in a knowledgebased economy that requires people who can move and think and 

contribute to innovation, certainly that we get in the San Francisco 

Bay Area. 

One of the challenges, it strikes me, as a father of two kids who, 

fortunately, are out of college and are done with their student debt, 

but still struggle with kind of making the income that was available in my generation, is this perfect storm of access for kids who 

really work hard, to all of your comments, particularly disadvantaged. 

I was at Berkeley last week, and I have heard this over and over 

again, and Mrs. Copeland-Morgan, because you are in a high cost 

area, and maybe Ms. Conklin, the cost of housing, the external 

costs. 

So, a lot of these kids, and it is CSUs in East Bay, they are putting more capital improvements in our community college that attract kids to go to school and stay, but the CSUs are not providing 

dormitories and housing. So, you get speculators in a high-cost area 

where the cost of housing is going up more and more. 

I have a bill that is getting some support from the other side that 

in the dangers of overstating this to make sure it is used right, but 

for kids who cannot afford the housing costs to be at Berkeley or 

UCLA, are you seeing that? 

At least anecdotally, I am getting that a lot from students, both 

at CSUs and UCs. They can afford the tuition, but if they had more 

flexibility through Pell grants and financial aid, they could get 

cheaper housing off campus if they had access to financial aid for 

that. 

Mrs. COPELAND-MORGAN. Certainly, the cost of living in some 

States is exorbitant, even for nonstudents. Our focus is on helping 

students to make wise financial decisions, and again, acceleration 

of their time to degree through programs like the year-round Pell 

grant program, through our Perkins loans, and other kinds of 

things. 

The institution is very involved with the community and trying 

to find housing. That is for all of our campuses, affordable housing 

for students. Students are willing to do what they need to do to get 

their education, so it’s not unusual that a student will have four 

roommates so they can keep borrowing down and be close to the 

institution, or on our campuses, so they can manage the educational costs. I think students’ primary goal is to be a student, to 

get their degrees and graduate. 

I think, again, we have been talking about ways of simplifying 

the process, which is key. I’d love to see a 4-year award letter for 

low-income students because their income doesn’t change over 

those 4 years, and I’d love to see a continuation of funding like the 

ACA for the campus-based programs, so that we can continue to 

put more counselors on the ground to address the kinds of concerns 

you’ve raised here today. 

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Mr. DESAULNIER. I have read articles about this with CUNY as 

well. Obviously, New York, it is a high-cost area. Ms. Conklin—it 

strikes me, part of it, that if you were going to give more flexibility 

for housing, the oversight to make sure that it is done efficiently 

and effectively and not abused would be a challenge. 

Ms. CONKLIN. I’m not prepared to comment on those oversight 

issues with any expertise, but I will compliment you on this understanding you have that the total cost of attendance, particularly for 

low- and moderate-income students in high-cost areas, is a huge 

barrier to retention. 

I can commend to you something Lumina Foundation has created. They are working with a number of university systems 

around the country. I am going to call it ‘‘beyond financial aid,’’ but 

it is the idea of how do you start them at the Federal level if your 

foundational single grant, single loan program, how do you then 

make sure that institutions and their communities are accessing 

means tested benefits, food banks that are local, shelters? That 

there is a set of resources that students, particularly nontraditional 

students, need to know about, and it is the responsibility of a community to come together to share those. 

I want to say it’s not just a Pell grant and paying for tuition that 

will make a difference in student success. 

Mr. DESAULNIER. It resonates with me personally. When my dad 

lost his job when I was a freshman in college, I could put together 

the money for the tuition, but I could not for room and board. It 

was easier to do it in Worcester, Massachusetts, than in the Bay 

Area, Los Angeles today, than it was in the 1970s. 

When I hear these kids have done everything right and they get 

accepted, they are 4.0s, and they cannot afford the cost of housing, 

and they live on sofas with other friends and then leave because 

they cannot afford it, it just seems to be a striking example of how 

we need to be adaptable. 

Thank you, Mr. Chairman. 

Chairman GUTHRIE. Thank you. The gentleman yields back. I 

have to correct the record. Earlier, I guess I said our ranking member was from UCLA. She is California, but the Berkeley campus. 

Mr. DESAULNIER. That is a big mistake. 

Chairman GUTHRIE. I now recognize Mr. Courtney for 5 minutes 

for questions. 

Mr. COURTNEY. Thank you, Mr. Chairman. Thank you to the witnesses, really thoughtful hearing today; some good ideas in terms 

of moving forward finally with reauthorization of the Higher Education Act. 

If you drill down in some of the testimony, you can actually find 

a few areas of overlap that is unexpected and helpful, and obviously there are some issues that we really do have to make some 

decisions on. 

Dr. Chingos, I am pleased to see that on page 6 of your testimony 

where you said the student loan program should break even fiscally 

and not make profits off of students. 

This morning’s 10-year Treasury notes, in other words, the 

amount of interest that the government is going to pay on a 10- 

year note, is 2.44 percent. We are still in a place right now where 

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the government is collecting legacy interest rates from 10 years ago 

which far exceed 2.44 percent. 

People, obviously, who do not have equity to refinance those 

loans again are really kind of helpless in terms of being able to 

take advantage of a low-interest environment. That has been, you 

know, the reality of our economy for a number of years. 

The Bank on Students Emergency Loan Refinancing Act, which 

was introduced last year by myself and Senator Warren, would 

have actually given people an opportunity to refinance down, and 

CBO estimated that about $50 billion would be saved for borrowers 

who were still paying some of these legacy loans. 

It would not be loan forgiveness. It would not be discharge of the 

debt. It would just simply, I think, align this debt burden with 

other forms of consumer debt. 

It will be introduced again in this Congress, and again, hopefully, 

we can get strong support on that if the Higher Education Reauthorization Act is submitted. 

The other issue which I wanted to just touch on a little bit is the 

issue of public service loan forgiveness, which, again, there is some 

disagreement between some of the testimony today. 

Mrs. Copeland-Morgan, in your testimony you expressed support 

for public service loan forgiveness. Just to take an example of the 

National Health Service Corps, which again is a very strong incentive to serve in underserved areas as an example, maybe you could 

sort of talk about the benefits of that program from your experience. 

Mrs. COPELAND-MORGAN. Thank you, Congressman. I do disagree 

with my colleagues about loan forgiveness for public service. I 

think it’s a good thing. The examples that were mentioned that are 

concerns I think can be addressed within current legislation. 

We need to find ways of encouraging young people to go into 

these large areas of need within our States and within their communities. I think there is evidence that those programs are working, and again, I think overall, when we hear about those areas 

where there are some small problems, we need to make sure we 

don’t allow those to be distractions to what is overall a solid program, and a very small program in the large scale of what we’re 

talking about here in higher education. 

Mr. COURTNEY. Thank you. I could not agree more. The mental 

health bill, which we passed at the end of the last Congress and 

was signed into law by President Obama, one provision in it was 

to actually extend National Health Service Corps’ loan forgiveness 

to pediatric and adolescent psychiatry, which in the wake of Sandy 

Hook –- I’m from Connecticut—you know, it was a bitter lesson 

about the fact that this is one of the most critical areas of our 

healthcare system that is just alarmingly understaffed across the 

country. 

The problem is the reimbursement. If you are a graduating medical student wanting to go into psychiatry, there is this disparity 

if you treat kids versus adults. 

If we do not do something about it, we are going to see more of 

these problems proliferate out there. And you talk to people in preschool and K–5, I mean that is again a really alarming trend in 

terms of young kids who are experiencing that. 

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Again, it was great to see bipartisan support for that loan forgiveness effort to address something that as a Nation we really 

have, I think, a moral duty to perform. 

Again, if there are fixes needed in the programs, let us deal with 

that. Let us not just eliminate what I think has been a really 

healthy way to get underserved occupations as well as regions of 

the country, critical public service jobs. And with that, I yield back. 

Chairman GUTHRIE. The gentleman yields back. We have from 

the full committee with us, who is very interested in these issues, 

we worked together on these in a very bipartisan way, Ms. 

Bonamici. You are recognized for 5 minutes for questions. 

Ms. BONAMICI. Thank you very much, Chairman Guthrie and 

Ranking Member Davis, for holding this hearing, and for allowing 

me to join your subcommittee today. This is an issue my constituents in Oregon care about a lot. 

I am someone who worked my way through community college 

2 years and 2 years at University of Oregon, and 3 years in law 

school. I did that all with a combination of loans, grants, and work 

study. 

When I graduated, I went into public service, not to a private 

firm, but I still had little difficulty repaying my student debt. That 

experience is less common today. As we know, more students are 

borrowing, they are borrowing larger amounts, and at the same 

time, there are millions of students, many of whom were for some 

reason or another unable to complete their programs, and they are 

behind on their payments or they are in default, which is causing 

an enormous drag on our economy. 

We face a lot of challenges, and I hope that this committee will 

take a comprehensive approach to making higher education accessible and affordable. 

I wanted to follow up on the comment that was made about better, more frequent information from our panelists. I am pleased to 

partner with Chairman Guthrie on the Empowering Students 

Through Enhanced Financial Counseling Act, long title, but important piece of legislation, that will help students with better information, more frequent information, and help them limit borrowing 

and plan ahead for repayment. 

So we have a pretty long list, strengthening Pell grants, simplifying loan repayment and access, providing evidence-based support 

to students to help with completion rates, especially for the firstgeneration students. We have some great model programs out in 

Oregon in that regard. 

Students who are parents, students with disabilities, students returning from the workforce, veteran students. There is a long list. 

I just want to also make a comment about the income-driven repayment discussion that I have heard here today. There are bipartisan efforts. I have the SIMPLE Act that is a bipartisan piece of 

legislation to get more people into income-driven repayment and to 

keep them there. It’s an annual recertification that can sometimes 

get people out. We are working on that again in a bipartisan way. 

That is an important piece as well. 

I really wanted to talk about the Federal work study program 

today. As someone who greatly benefited from it myself, I know 

that work study can give students valuable real-world experiences, 

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reinforce what they are learning in the classroom, and the program 

requires a match from employers, so we see Federal funding go further. 

So I was, needless to say, disappointed to see the President proposed a budget that would significantly reduce Federal work study 

investment. 

Mrs. Copeland-Morgan, how can the Federal Government maintain flexibility in the work study program while also helping institutions connect more students with work-based learning opportunities that align with their interests and career goals? I want to ask 

another question, too. 

Mrs. COPELAND-MORGAN. Thank you for the question. Let me 

just state for the record that I got into education being a Federal 

work study student, working in financial aid for 4 years as a student. 

The Federal work study program is one way of bringing parity 

for internships, work experience, and other things. It reduces the 

cost of students working. It retains them on campus because they 

are in generally the academic environment. Certainly, more funding in work study, we’d love to see that. I think this is a bipartisan 

issue. 

We have seen that work study aids in retention. Certainly, our 

community partners which– the Federal work study program allows us to partner with community-based organizations to employ 

students, to help do some of the work that you’re talking about 

here today, outreach work, getting the word out about financial aid, 

job location development program. 

I think the real issue is we have to make a greater investment 

in these programs that work, and Federal work study is arguably 

one of the best along with the Pell grant. 

Ms. BONAMICI. Thank you. I am glad you mentioned internships 

because we see it is a real equity issue. Some of the affluent students can do a prestigious internship, but students with more modest means cannot. That is a place where work study can help. 

I know Representative Allen earlier asked a question about the 

formulas for allocating campus-based aid to institutions, and those 

formulas have changed very little since the 1970s, and that was a 

long time ago. Some of my colleagues probably were not born. 

For the work study program, the majority of the funding is distributed to institutions based on how much they received decades 

ago. I know Ms. Conklin explained our neediest students are often 

left out by this formula. 

Mrs. Copeland-Morgan, how can work study funding be allocated 

more equitably? 

Mrs. COPELAND-MORGAN. Let’s get rid of the base guarantee in 

the campus-based program. We’ve been talking about this since I’ve 

been in the profession. To make it more modern and distribute 

those dollars where the lowest income and neediest students are. 

We can’t do that without making a greater investment in the program. 

Ms. BONAMICI. Thank you very much. My time has expired. 

Again, thank you, Mr. Chairman and Ranking Member, for allowing me to join you today. 

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83 

Chairman GUTHRIE. Thank you for being here today. The 

gentlelady yields back. 

Seeing no other members present for questions, I would like to 

again thank our witnesses for taking the time to testify before the 

subcommittee today. 

I now recognize Ranking Member Davis for any closing remarks 

she may have. 

Mrs. DAVIS. Thank you, Mr. Chairman. I also thank you very 

much. I think it has been a good and strong discussion, and a lot 

of contributions all the way around in terms of some of the things 

that we actually can change without hurting students and furthering their education. That is really the bottom line for me, it 

has to help rather than hurt. 

I also wanted to put into the record the article Mr. Courtney had 

regarding mental health. I want to place that. 

Chairman GUTHRIE. Without objection. 

Mrs. DAVIS. I did hear some consensus, as a number of people 

mentioned. It is a great first start, Mr. Chairman, and I certainly 

hope we can come back together and look at some of the details 

and some of the best practices so we actually can do something 

that is going to make a difference. Thank you. 

Chairman GUTHRIE. Thank you. I appreciate that. I just want to 

close with these comments. You know, we are looking at simple, 

how to make it easier, how to make it more simple. 

I mentioned I have a couple of children in college now, going 

through those kinds of programs. We need to make it simple, but 

we do need accurate data. I think Mrs. Copeland-Morgan said we 

need to make sure we have accurate data. 

I had somebody say the other day what if we made it so simple 

for Federal, then the campuses that do campus-based aid would 

have to have separate forms. We do want to make it easier for people to use. 

The year-round Pell, something I am very interested in, was 

talked about. It is not to accelerate because of 2–1/2 years of college 

versus 3 or 4, it is cheaper, which it is, that is obviously true. 

I worked in manufacturing before, and I saw a lot of people that 

needed to go back, were qualified, needed, and wanted to go back 

and get a secondary education. But when you are 18 to 22 and 

know your parents are there for you, it is easier. When you are 30 

and you are a parent and you have maybe two or three children, 

an example I know, just the idea that it is going to take me 4 years 

to get somewhere, it is very difficult for people to do. But if you 

can spell out some things we can look at in accreditation for life 

experiences, and get somebody into that 2–1/2-year timeframe, it is 

something that is doable, and we want to encourage that. 

This has been very informative for me. I appreciate the ranking 

member and all the members’ questions and the witnesses. 

And without objection, there being no further business, the committee will stand adjourned. 

[Additional submission by Ms. Adams follows:] 

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March 20, 20 t: 

Dear Clnirman Gt1tbtic and lhnking 

historically 

HJlCCs. 

The Importance of FcdemJ Student Aid 

Federal student aid 

group on college att-;unmcnt, federal college 

to train thC' skilled workforce 

.'\merican colkge auainmcnt and rhar of 

for college. Research and lrNCF's own 

and _\nd most for 
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African American families who generally ha\'e lower assets and incomes that limit their ability to 

contribute toward college expenses. In the past decade, the wealth gap between whites and blacks 

has increased from SC\'enfold to thirteen fold. Drawing on data from the SurYey of Consumer 

I •'inances, the medran net worth of a honsehold is twice that of the fll'o-pmmt black 

household. 

The federal student aid process must be strengthened, streamlined, and simplified to maximize its 

effectiveness. However, streamlining and simplifying federal student aid should not mean cutting 

back on vital federal assistance for the most vuh1erable students who need the most help. 

The Need for a Robust Federal Investment in Pe!l Grants 

Federal financial assistance targeted to low-income students has not kept pace with the need. The 

Pell Grant program is the single largest source of federal scholarships for students who lack the 

financial means to pay for college; over 7.6 million students recei,-e Pell Grants. Nonetheless, in 

the 2016-2017 school year, the maximum Pell award of$5,815 paid, on a\'erage, only 29 percent 

of the average cost of attendance at a four-year public college and 13 percent of the average 

cost of attendance at a four-year priyatc, nonprofit college- the in the /Ji.f/OI)' oft he program. 

,-\ more robust federal investment in Pell Grants would enhance college access, improve college 

outcomes both persistence and degree completion- and lower student debt, which is a crisis for 

students at HBCUs. ,\ccording to a recent UNCF study, I·~"JJ'er 1\e,mt/ll.V.r, .\lmr Dub!, students at 

l!BCUs borrow loans at greater rates, borrow greater amounts, seek loans from more costly 

sources and encounter more obstacles repapng their loans, despite attending lower cost 

institutions. For instance, in 2012, a quarter of l!BCU bachelor's degree recipients borrowed 

$40,000 or more, which is fom times the rate of their non-[ IBCU peers who borrowed tl1ts same 

an1onnt. 

The !'ell Grant should be the equalizer for students with limited means, and there are a number of 

ways to make Pell Grants work better for them. Here are a few suggestions: 

• 

• 

There is an immediate need to restore year-round Pel! Grants that enable students to finish 

college faster and with less debt; as well as to raise the maximum Pell Grant and index it to 

account for inflation. 

0\·cr time, Congress should double the current maximum Pell award to approximately Sl2,000 

to support roughly 60 percent of the cost of attendance at a four-year public university and 

continue a cost-of-living adjustment for the award. 

The Pell program can be modernized to inccntivize on-time completion, such as providing 

support for dual enrollment programs, extra Pell funds for students who take 15 credits per 

semester instead of 12 credits, and incorporating flexibility for students to use Pel! funds across 

award years. 1\ll of these rcf()tms could hdp students t!rush faster, on time and wirh less debt. 

On the other hand, Conbrress should recognize that some students - such as those requiring 

remedial education and nontraditional students attending part-time take longer to earn their 

degrees. To accommodate these students, Congress should extend or repeal the 12-semestcr 

Pell Grant eligibility limit. 
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Campus-based Aid l.~<'verages Additional Resources for Low-Income Students 

The campus-based aid programs - Supplemental Educational Opportunity Grants (SEOGs), 

Federal \\'ork-Study funds and Perkins Loans -leverage significant addrtional resour:ces for lowincome students because mstituttons must provide matching funds (at least 25 percent of the 

federal award). These programs also enable institutions to assist students who have reached Direct 

Loan borrowing limits and lower student loan debt. UNCF encourages the Subcommittee to 

continue to support these valuable programs and to revise their allocation formulas to target aid 

to colleges serving high proportions of low-income students. 

IV! ore than 55,000 HBCC students- approximately 22 percent of HBCU undergraduates -rely on 

SEOC average awards of $600. SEOGs continue to he a critical component of the federal student 

aid portfolio for IIBCUs because these grants make exceptionally needy Pell Grant recipients the 

priority for supplemental assistance. 

Federal \\,'ork-Study funds benefit over 26,000 I IBCU students with average awards of about 

$1,700, providing them an opportunity to work reasonable hours to earn money to pay tuition and 

living expenses. Recent rc"'arch by Teachers College at Columbia University affrrms that the 

Federal \\1

ork-Study program has positive long-term impacts on persistence, graduation and postcollege employment, particularly for low-income students. \\'ork-study jobs are a valuable way for 

African American students to gain workplace skills that prepare them for future jobs and careers, 

helping to address the problem of under- and unemployment in African American conununities. 

,\bout one-third of all HBClls particrpate in the Perkins Loan Program. ;\sa result, over 10,000 

IIRCU students receiw Perkins Loans that average $2,200 per award. \Vith a fixed 5 percent 

interest rate, Perkins Loans arc more desirable than more costly private loans or Parent PLUS 

Loans. Moreover, Perkins Loans provide an important loan cancellation benefit for students who 

go into public service fields, such as teaching, nursing, law enforcement, child care and the military. 

Student Loan Reforms 

E;-en with Pell Grants and campus-based aid, student loans wrll remain a critical component of 

college tinancing for many low-income students. However, much more could be done to redesign 

and impmve federal Direct T ,oans and loan repayment options to reduce borrowing costs and to 

make loan repayment more manageable for students and parents. 

Direct Loans are too costly; thci1· origination fees should be eliminated completely and interest 

rates should be lowered so that the federal govenm1cnt does not generate excess revenues at the 

expense of low-income families. Proposals to eliminate subsidized Direct Loans, by charging lowincome students interest while the1· are in school, would he a mm-e in the wrong direction, costing 

students thousands of dollars in a program in which the federal government already is making a 

pro tit. 

The Parent PLUS Loan program provides unsubsidi£ed loans to parents of dependent 

undergraduates, after a credit check, to help ehgible parents meet college expenses after other 

sources of federal student aid arc exhausted. \X11ile some have proposed the elimination of Parent 

PLl1S Loans Ul the name of streamlining federal student loan programs, we urge that the program 

be "repaired, not repealed." \X·11cn the CS Department of Education unilaterally tightened the 

Parent PLUS Loan credit requirements in October 2011, we learned just how critical these loans 

are to college access for hundreds of thousands of students across the country, and especially to 

students at HBCUs. Today, approximately 39,000 students at HBCUs approximately 15 percent 

of all HBCU wrdet:graduates- depend upon Parent PLUS Loans to meet their college expenses, 
87 

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and another 8,600 IIBCU students approximately 23 percent of all HBCU graduate students 

receive Craduate PLUS Loans to help them finance advanced studies. 

The elimination of Parent PLUS Loans would almost certainly lead to fewer students enrolling and 

staving in college and undermine the financial stability off IRCUs unless replaced by better student 

aid options, such as a .rub.rtantial increase in Pell Grants and campus·hasecl aiel, and an increase in 

borrowing limits for subsidi?.ed and unsubsidizcd Direct Loans. Graduate PLUS I ,oans are 

essential ro help meet the demand for individuals with advanced educational credentials and to 

ensure access to education throughout the K.2() pipeline. 

\v'hile Parent PLUS Loan regulatory reforms were put into place in March 2015 by the U.S. 

Department of Education after a negotiated rulemaking process, statutory modifications could 

improve the program for parents who sacrifice by taking on loan debt to invest in their child's 

education. Among key imprm·ements would be eliminating the origination fee and lowering 

interest rates, currently at 4.272 percent and 6.31 percent, respectively, for the 2016·2017 academic 

year. :\more robust loan counseling requirement should be incorporated into the program so that 

all participants borrow only what is needed, know the loan terms and conditions, and fully 

understand their repm·mcnt obligations. Finally, an income·dri\'en repayment option should be 

provided that not onlr will benefit parents, but also will reduce complexity in the federal education 

loan programs by aLigning repayment options acmss loan programs. Congresswoman Marcia 

Fudge (D·OH) introduced H.R. 4661 in the 114•h Congress incorporating some of these reforms. 

In fact, building a smarter, simpler and single income-based system for the repayment of ail federal 

student loans should be an urgent priority. Congress should mo.-e fmward to modernize and 

streamline the confusing and complicated menu of at least eight repayment plans - all with 

different eligibility guidelines and terms- into a single mcome-based plan as the default option for 

all borrowers, both students and parents. \v11ilc implementation details would need to be studied, 

such a program would make student loans more affordable, scn·e as an insurance mechanism to 

protect borrowers during periods of unemployment, benefit taxpayers by eliminating defaults and 

lift the burden of student loan collection from !IBCUs, which face sanctions if cohort default rates 

become too high. 

Streamlining and Simplifying Federal Student Aid 

First among needed streamlining reforms is simplifying the Free 1\pplication for Federal Student 

Assistance (FAFSA). The complexity of the 1 08·qucstion F,\FSA acts as a major barrier to college 

entry and success for low-income students. According to the U.S. Department of Education, two 

million students lem·e Pel! Grants on the table because their families do not complete the Fi\FS1\. 

Streamlining the F1\FS1\, as others have recommended, could result in more low·incomc students 

applying to college and receiving need·based grants. 

The recent actions by the U.S. Department of Education and the Internal Revenue Service (IRS) 

to discontinue online access to the IRS Data Retrieval Tool, a critical tool for streamlining the 

F:\FSi\ process, is a major setback and could negatively impact thousands oflow·income students 

who are currently applying for financial aid for the 2017-18 academic year. We applaud this 

Conunittee's efforts to obtain prompt answers from the Administration on how this problem will 

be remedied, while protecting students' and parents' security and privacy. 

Students and their families need earlier and better information about federal student aid. A recent 

report from the National Center for Education Statistics fi:mnd that one in five undergraduate 

students did not seek out any form of financial aid - federal, state or institutional - to attend 

college, leaving billions of federal financial assistance behind because they believed that they were 
88 

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ineli1,'1blc. Students should receive information about college as early as elementary school and 

federal financial md counseling in secondary school to boost financial aid awareness and collegegoing rates. Moreover, students and families need more personalized counseling and 

individuali7.cd assistance to complete the FA.FS.-'1.. The federal government can streamline this 

mformation and programs such as TRIO and GEr\R UP can proYidc the needed support. 

Additionalh·, students receiving means-tested federal benefits, such as under the Supplemental 

Nutrition ;\ssistance Program (SNAP), Medicmd and Supplemental Security Income (SSI) 

program, should be able to automaticallv qualify for a zero Expected fiamily Contribution (EFC) 

to receiYe maxtmum Pell Grants. This would also allow the federal government to notify students 

of their eligibility earlier. 

Congress should allow low-income students to establish federal student aiel eligibility for more 

than one year to elimmate the need for them to reapply each year, as their financial circumstances 

don't change significantly from year to year. A reYiew every two years, with tlnancial aiel officers 

applying professional judgment on a case-by-case basis, would streamline the process and alleYiate 

the burden on low-income families. Ranking l\Iember Bobby Scott introduced a bill (H.R. 5784) 

in the 114'h Congress, the File Once PI\fiSA Act of 2016, which would move policy in this 

direction. 

Congress should also consider revising the federal needs analysis to better target federal aid to lowincome students. One wa1' to do this would be to incorporate a negative EFC for the poorest 

students whose farr1ilies have no assets. 

ln addition, the income verification process which requires students to provide additional 

documentation regardmg their income status ajier the F>l FS/1 i,r (ompleted - can be another 

challenging hurdle for low-income families. These procedures can block students' access to 

essential financial aid if they are unable to succcssfull\' nm·igatc this process. ;\ study by The 

Institute for College Access and Success found that most of the students that the U.S. Department 

of Education flags for income verification are I' ell-eligible students; yet there is c;·iclence that few 

Pell students see a change in their aid eligibility due to the income veritication process. Thus, the 

verification requtrcments simply require low-income students to prove repeatedly that they arc 

poor and burden HBCUs and other institutions ;vith additional compliance costs. 

Conclusion 

A college education remains the single most in1portant strategy for opening the door to economic 

opportunity for low-income and minority students. HBCUs hm·e been working for over 100 years 

to provide educational opportunities to these students who our nation most needs to earn college 

degrees. UNCF and our 37 -member I IBCUs look forward to partnering wtth you to increase those 

opportunities through a robust, effective and efficient federal student aid system. All of the Title 

IV federal student aid reforms discussed in this letter would make it easier for HBCU students and 

their families to get the college financial assistance they need. 

Sincerely, 

Michael L. Lomax, Ph.D. 

President and CEO 

UNCF 

cc: Members of the lcdncarion and the \Vorkforce Committee 
89 

[Additional submissions by Ms. Copeland-Morgan follow:] 

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In 2015-1.6, UC students received $1.6B in federal need- and non-need based support. Figure 1 shows 

some select statistics about programs that support UC students. 

Program Awards Recipients %with Aid Average Award 

Pell $376,312,513 84,162 40.2 -- $4,471 ___ _ 

SEOG -------· $11,773,181 15,629 7.5 $753 

Perkins Loans $24,879,151 16,303 7.8 $1,526 

_ _D_irect Loans- Sub~ ______ $306,3§_h:J.!l_~_73,5'!_~.--~----~l_~---

DirectLoans- Unsubsidized $143,815,468 46,942 22.4 $3,064 

PLUS $200,128,500 14,073 6.7 $14,221 

.~ork Study----.. ---·--·---- $22,233,971_~34 ·-----~·-·-- $1,732 

Other Federal (Mostly VA) 52 1,950 0.9 17,010 

Average Award 

Federal Gift Aid $93,452.882 3,242 6.3 $28,829 

_F.":J.~rill_?_l11:l~i(jiz:ed lo!'."s:.'__ ________ J.l:~,I .. Q!i,3.~'L---.,.Lii_0.1!_ ______ 2:.! _______ $_6.558 ---· 

Grad PLUS and Unsubsidized $416,698,757 12,3(j_0 _____ .3.:::_Cl___.__ $33,712 

Work Study $3,355,901 $4,072 

Other Federal I Mostly VA) $22,470,553 $31,092 

Source: Student Affairs Financial Aid Inventories 

Federal financial aid is not the only way that UC students finance their education. Figure 2 below shows 

that need-based grant from the State of California ($840M) and the University ($766M) significantly 

supplement federal Pelt grants for undergraduates. 

1 Includes Perkins Loans and Health Profession Loans 
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Figure 2: Undergraduate Need~based Grant by Fund Source, 2.015~16 

University of California 

Federal (Pell, SEOG) 

State (Cal Grants) 

Most California residents receive enough grant and scholarship to fully cover their systemwide tuition 

and fees {58%). Another 15% of undergraduates receive partial coverage. See Figure 3 below. 

figure 3: Coverage of Tuition by Gift Aid, California Undergraduates 

Source: UCOP Corporate Student System 

Full Coverage 

Partial Coverage 

No Coverage 

UC enrolls a large proportion of low-income students relative to its peer institutions. Figure 4 below 

shows the comparison information for the most recent year available. 
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Figure 4: Pel! Grant Recipients at uc and Other Research Universities, 2013·14 

UC's Annual Report on Student Financial Support, 2015~16 

UC not only enrolls low-income students at high rates, but it graduates them as well. 

Pell grant recipients who entered as freshmen are less likely to graduate in four years, but at the 

six-year mark, their graduation rates are comparable to those of non-Pell recipients. Transfer 

students show a similar pattern. See Figure 5 below. 

Differences in graduation rates largely disappear when we control for academic preparation. 

Figure 5: Graduation Rates~ Freshmen and Transfer, Pel! Status 
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The average time taken to earn a bachelor's degree at UC has decreased fairly steadily since 

1994. Students entering as freshmen take an average of 4.1 years, which is about 7 percent less than in 

1994. For students entering as transfers, the average time to degree is 2.3 years, about 12 percent less 

than in 1994. See Figure 6 below. 

los Angeles 4.1 2.3 

Merced 4.4 2.9 

Riverside 4.3 2.4 

San Diego 

Santa Barbara 4 

Santa Cruz 

Systemwide 4.1 2.3 

UC Accountab!llty Report, 2016 
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UC average debt upon graduation is less than the national average. 

UC campuses have 3-year cohort default rates below the national average for public four-year 

universities. See Figure 8 below. 

Davis 4.1 3.8 2.7 2.6 

Irvine 3.5 2.3 

los Angeles 3.4 3.1 2.2 

Merced 3.6 

Riverside 5.3 6.1 43 

San Diego 3.8 

San Francisco 0.5 0.3 0.7 0.05 
97 

[Additional submission by Mr. Courtney follows:] 

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3/28/2017 

PERSONAL FINANCE 

The next vtct1ms nfth€ student debt crisis Mom and dad 

AHE YOU LOOKING 

TO SAVE MONEY? 

115 
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3128/2017 The next VICtimS ofthe student debt crisis Mom and dad 

MOST POPULAR 

patenta! student debt. 

http"/Jwww.cnbc.comf2016112/23ithe-next~victims-of-!he-stvdent-debt-crisilHnom-and-dad.html 215 
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3/29/2017 

Interest 

Loan typ~ 

D1nxt 

' Unsubs1dized 

L.odns 

D1rect 

Unsubs1d1zed 

Loans 

D1rect PLUS 

Lo,ms 

fhe next victims of the student debt cns1s: Mom and dad 

student loans 

Borrower typ€ 

UndNgrodude 

http·tfwww.cnbc.com/2016/12123/the-next-victims-of-theo-sludent-debt-crisis~mom-and-dad.html 
101 

[Questions submitted for the record and their responses follow:] 

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May12,2017 

Dr. lv!att Chingos 

Senior Fellow 

c;rban JnstitUie 

2100 tv! St. NW 

Washington, DC 20037 

Dear Dr. Chingos: 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE flO USE Of" REPRCSENTATJVES 

2176 R.6.YBURN HOUSE OFFICE 8UILD!NG 

WASHINGTC}'\J. DC ?0515··6"100 

C. "BOBBY" SCOTT. VA 

Ranhing Member 

MINOF\ITY- (202) 225··3725 

F1-\X- (202) 226-5393 

Thank you. again. for before the Subcommittee on Higher Education and Workforce 

Development at the hearing "Improving Federal Student !\id to Better Meet the Needs of 

Stud<mts" on Tuesday, March 21,2017. 

As a testimony, lind enclosed additional questions for you submitted by 

Chainvoman Foxx after hearing. Please provide your written responses lo Education 

Lcgislatiw Assistant Caitlin Burke no later than June 2, 2017. Her number is (202) 225-6558 

should you have any questions about this request 

We appreciate your time and insight, and we remain grateful f\Jr your contribution to the 

Committee's work. 

Sinc~re!y, 

Brett CJuthric 

Chairman 

Subcommittee on Higher Education and 

\Vorkforce Development 
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Ch:Jin,\'Om:m Virgiui<t Fo:l.x (R--Nf:) 

l Jm concerned ahout the impending cost in Lbe fcJcra! student loan programs. As we look 

to make policy that benefit:; students. !km1ilics, in;-;titutions. and taxpayers. it is essential that vve 

understand the true costs of the programs we arc running and who exactly \:VC arc subsidizing. I 

am particulurly concerned by the unknown and potentially massive costs of generous incomebr~scd n:payml...'nt plans anJ occupation-based loan i'orgivencss. Can you explain the 

compliccltiti!l:-. cre<Jtcd by thc:se unknown costs and discuss whether you think these policies arc 

<.!C!Lmlly helping hntTmYcrs who nrc struggling to repay? 

Can you explain your concr:rns with the parent PI .US program and what ultimately led you to 

suggc.:;t its elimination? Do you believe studen1s \\'ith financial need can still access a higher 

education witllout this prof!ram? 
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MAJOFi!rv 

FAX .. t)02) 27.S-957'1 

lVfay 12. 20 I 7 

Ms. Kristin Conklin 

Pa11nt:r 

HCM 

Dear Ms. Conklin: 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE HOUSE OF RfPHESENTATiVES 

7.176 RAYBURN HOU~~E OFFiCE BUiLOIN(; 

Wr\SHL'\JGTCF\L DC 20515--0100 

VA 

MINORiTY·· {202) 225~3725 

FAX··· (202) 226-5398 

Thank you, again, for before the Subcommittee on Higher Education and Workforce 

Development at the hearing "Improving Federal Student Aid to Better Meet the Needs of 

Students'· on Tuesday, March 21, 2017. 

As a lind enclosed additional questions lor you submitted by 

Chairwoman Foxx after hearing. Please provide your written to Education 

Legislative Assistant Caitlin Burke no later than June 2, 2017. Her number (202) 225-6558 

should you have any questions about this request. 

Sinct..'rely. 

Brett Guthrie 

Chairman 

your time t.md insight, and we remain grateful for your contribution to the 

work. 

Subcommittee on Higher Education and 

\Vorkf<)rce Dcvclopmt::nt 
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Chairn,unum Virginia Foxx (R-NC) 

ln your testimony and in HCi'v1's rt:port, you suggest various options for moving the federal 

definition of rull-time to ! 5 credits. One of these proposals is increasing the maximum Pel! Grant 

so a studen1 attending less-than full tirn.e \VOulcl still receive the same amount as under the old 

definition. Do you think it is an appropriate use of taxpayer funds to incentivize what students 

receiving federal funds should be doing anyways- completing college on time? 

incentives for stmknts to complete their program of 

enrollment. One of the \vays to do so is by 

their progress to completion access to Pel! Grant funds 

unnm·tm\Ce of requiring students accelerate their time to 

Pel I Funds? Could year-round Pell without an 

result in .somt.: students exhausting their Pel! Grant eligibility 
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The Honorable Alma Adams 

U.S. House Subcommittee on Higher Education and Workforce Development 

"Improving Federal Student Aid to Better Meet the Needs of Students" 

March 21, 20 17 

Question for the Record: 

Airs. Copeland-lvforgan. one oft he Republican witnesses at the Higher Education and Workforce 

Development subcommittee hearing stated their support for the elimination of Parent and Grad 

PLUS loans. The witness argued that parents and graduate students have a credit history and 

thus. can be well served by the private market. How would eliminating the Parent and/or Grad 

PLUS Programs be detrimental to students? 

Response: 

The Parent and Grad PLUS loans both have credit standards, where eligibility is contingent on an 

absence of adverse credit. For parent borrowers, elimination of the PLUS program would leave 

some without any borrowing options because private lenders look for strong established credit 

and they might not qualify. Further, the interest rates for private loans are typically higher than 

they are for the PLUS loans, and some Parent PLUS loan borrowers are eligible for other 

benefits, such as public service loan forgiveness or defense to repayment eligibility if needed. 

Retaining the ability for all parents to borrow is important, especially for parents who want to be 

partners in helping pay for their child's education. At the University of California (UC), 

parents-like all undergraduates-are expected to cover a portion of their educational expenses, 

which may be derived from borrowing. If parents do not have access to PLUS loans, they might 

not be able to make that contribution. 

For graduate students, even at the higher interest rates (compared to Stafford Loans) the ability to 

use Grad PLUS loans to borrow up to the total cost of attendance is an overriding reason we 

want to keep the safer-than-private Grad PLUS loan option. UC's financial aid policy is different 

for graduate students, where the University strives to attract a diverse pool of highly qualified 

students by providing a competitive level of support relative to other comparable institutions. 

This competitive support is key because graduate student enrollment is critical to the 

University's research enterprise and helps the state meet its academic and professional workforce 

needs. In 2013-14, 64 percent of graduate students received grant or fellowship support 

averaging nearly $!8,000 per student, in addition to substantial support from teaching and 

research assistantships. 

However, graduate programs are typically academically demanding and students are generally 

not able to pay for school and living expenses-- especially if they have a family through work 

alone. In 20 I 5-16, 12,360 UC graduate students (nearly one quarter) borrowed an average of 

$33,712 in Grad PLUS and unsubsidized Stafford loans ($4 I 6,698, 757 in total). 

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As with parents of undergraduates, many graduate students would not be able to qualify for a 

loan on the private market, but would pass the PLUS credit standard. This means that many 

students' only option to cover living expenses is one or both of the federal loan programs. 

Levels of student borrowing difter substantially by professional degree program. Average debt at 

graduation and the percentage of students with debt are generally highest for programs with 

higher Professional Degree Supplemental Tuition charges (e.g., law) and/or programs that take 

longer to complete (e.g., medicine). Academic doctoral students usually qualify for fellowship 

awards and research assistanceships. However. Masters students and students in professional 

degree programs frequently rely on student loans to finance their education. 

Another important feature of Grad PLUS loans UC wants to preserve is the repayment options 

available that arc not available with private loans (e.g. income-driven repayment options and 

public-service loan forgiveness). 

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The Honorable Susan A. Davis 

U.S. House Subcommittee on Higher Education and Workforce Development 

"Improving Federal Student Aid to Better Meet the Needs of Students" 

March 2 2017 

Question for the Record: 

Mrs. Copeland-Morgan, during the subcommittee hearing, some r~f the Republican witnesses 

spoke about Income Share Agreements (!SA.I). What are ISAs and how are these packages 

negotiated? Please also provide the advantages and disadvantages of these agreements for 

studems. 

Response: 

Income Share Agreements (IS As) arc arrangements where individuals or organizations 

(including for-profit companies) cover tuition and fees for a student, who then agrees to pay back 

a percentage of his/ her income for a fixed number of years upon graduation. The share of 

income and number of years the student makes payments vary by arrangement. The terms can 

differ by institution and can vary by other factors, such as the student's major. The implications 

for students who leave school before graduation will also vary by arrangement. 

We do not believe this is a broad-based feasible solution for all students, and there are serious 

concerns about the arrangements. For example: Programs like this can be discriminatory to 

students based on risk factors such as their projected earning power of their majors, the family 

income profile of their institution, or other subjective factors that might be used as eligibility 

criteria 

Other concerns include: 

ISAs require a tremendous investment up front, and a long wait until repayment begins, 

which has been a factor in creating these arrangements. 

ISAs are effectively loans against future earnings. These plans could lead to a massive 

increase in debt among students, particularly if they change majors or career paths. 

Used on a large scale, these programs could require costly infrastructure investments to 

set up a mechanism for repayments, as it could be difficult to get graduates to document 

their income and make payments. 

ISA proposals could lead to reduced public support for higher education, leaving college 

accessibility-which should be a public goal-to private entities. 
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The Honorable Adriano Espaillat 

U.S. House Subcommittee on Higher Education and Workforce Development 

''Improving Federal Student Aid to Better Meet the Needs of Students" 

March 2 2017 

Question for the Record: 

lvfrs. Copeland-Morgan, the Puh!ic Service Loan Forgiveness ojji!rs !oanji1rgiveness to 

individuals engaged in puh!ic service after l 0 years. We've heard that this program is too costly 

and one o[the witnesses at the subcommillee hearing suggested that people purposejidlv borrow 

high loan amounts because they know they can get/heir loansforgiven. What would he the 

impact of eliminating this program:' 

Response: 

We are not aware that there is any evidence to support the idea that students purposefully and 

unnecessarily take out large loans with the intention that they will pursue low-paying careers and 

pay back their loans on-time for I 0 years. just to have the remaining balances forgiven. At the 

University of California (UC). loan eligibility is already limited to the cost of attendance; all new 

student borrowers take entrance loan counseling. which emphasizes the need to repay loans; and 

in fact, 47 percent of UC undergraduates have no student loan debt at graduation. Of those who 

borrow, UC undergraduates have less debt than the national average. In 20 15-16, of those who 

borrowed. the average debt at graduation was $20,900, compared to the national average of 

$30.100. 

Students generally decide whether or not to take out loans as they are planning for college and 

managing their educational expenses. They typically lind out about Public Service Loan 

Forgiveness (PSLF) after they have discovered their passion for public service, but the PSLF 

Program is also intended to encourage individuals to enter and continue to work full-time in 

public service jobs. Students dedicated to careers in public service are relieved to know that if 

they must borrow to cover educational costs, they could have some relief in exchange for their 

service. At the same time, society benefits ti·om lowering the barriers for our best and brightest to 

engage in meaningful work. 
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The Honorable Mark Takano 

U.S. House Subcommittee on Higher Education and Workforce Development 

"Improving Federal Student Aid to Better Meet the Needs of Students" 

March 2017 

Question for the Record: 

Mrs. Copeland-Morgan, during the HEWD subcommittee hearing, some members suggested that 

student aid has driven the increase in tuition and that universities are irresponsibzv using tuition 

revenue to fimd unnecessary projects. Can you please explain what drives the cost of tuition and 

how campuses in the UC system use their budget? 

Response: 

A number of the nation's most respected experts in higher education finance and public policy 

have found no convincing, causal relationship between federal aid and college prices at public 

and nonprofit colleges. For example: 

• The nonpartisan Congressional Research Service found: "IT]here is certainly no 

consensus on the existence, and certainly not the magnitude, of [a] causal relationship 

between [federal student] aid and price." A Congressionally mandated National Center 

for Education Statistics study also found no relationship between federal grants, state 

grants, or student loans and changes in tuition in the public or private nonprofit sectors. 

• Patrick Callan, president of The Higher Education Policy Institute, stated in his 

assessment: "There is I ittle evidence that these means-tested grants are major factors in 

the tuition setting decisions of most colleges. If colleges had calibrated tuition increases 

to Pell Grants, steep tuition increases would not have been repeatedly imposed in the 

years when the grant levels were not raised and tuition would be considerably lower 

today .... Pell Grants are a critical part of the safety net that helps many low-income 

Americans enroll in college. In fact, the vast majority of Pel! Grant recipients are from 

families with incomes below $40,000.'' 

• Sandy Baum, a higher education economist and George Washington University professor 

says: "There is no convincing evidence that increases in Pel I Grants feed tuition increases 

in either public or private not-for-pro!lt shortfalls in state support due to economic 

downturns, and students' institutions. Increases in federal grant funding for low- and 

moderate-income students are critical to assuring educational opportunities for students 

with the most limited ability to pay and critical to the future of our economy." 

For the University of California, there is a direct correlation between the large sustained 

shortfalls in state support due to economic downturns, and students' increased contribution to 

tuition and fees. Since 1990-91, the state's int1ation-adjustcd contribution per UC student has 

declined by 61 percent. Students now pay approximately 46 percent of the cost of education. 

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During these same years, it is important to note that UC's average tuition and fees for state 

residents remained low relative to UC's public comparison institutions. Further, more than half 

of all UC undergraduates have their tuition and fees fully covered by grants and/or scholarships. 

As a result, the University has remained financially accessible to students at all socioeconomic 

levels despite rising costs, as evidenced by our high percentage of Pell Grant students and our 

students· overall low student loan debt. 

This achievement is mainly attributable to the University's approach to student financing, which 

is built around an integrated conceptual framework that is used to assess the University's role in 

funding its financial support programs, to determine how undergraduate financial aid is allocated 

across campuses, and to guide campuses in awarding aid to individual students and their 

families. 

This framework, known as the Education Financing Model, is based on four principles: 

• UC must acknowledge the student's total cost of attendance: resident student fees, along 

with costs related to living and personal expenses, books and supplies, transportation, and 

health care. 

• Financing a UC education requires a partnership between students, parents, federal and 

state governments, and the University. 

• To maintain equity among undergraduate students, the University expects all students to 

make a similar contribution from student loans and employment to help finance their 

education. 

• Flexibility is needed for students in deciding how to meet their expected contribution and 

for campuses in implementing the Model to serve their particular student bodies. 

The University determines funding levels for its systemwide need-based grant program 

(institutional aid), allocates funds across the campuses, and sets guidelines for awarding funds to 

students in accordance with the Education Financing Model. These funds, unlike funds such as 

endowments, are specifically for providing students with access to the University. Campuses are 

encouraged to develop additional resources in support of their own enrollment management 

goals. 

To evaluate the effectiveness of its undergraduate financial aid programs, the University 

monitors multiple student outcome measures designed to answer !bur basic questions: 

• Is the University financially accessible to students at every income level? 

• Do UC students work manageable hours? 

• Do students' financial circumstances affect their academic success? 

• Do students graduate with manageable debt? 

UC data illustrate the effects of these measures, showing that: 

• UC remains very successful at enrolling low-income Pel! Grant recipients. 

• While the percentage ofUC California resident undergraduates from lower-income 

families had increased in recent years, likely reflecting the impact of the economic 

downturn and recession on the incomes of UC families in those years, the proportion of 

students fmm lower-income families remained stable between 2012-13 and 2015-16. 

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• Nearly half of UC undergraduates (resident and nonresident) at every income level 

reported not working. As in past years, however, a small proportion (less than I 0 percent) 

of students reported working more than 20 hours per week. 

• Among all undergraduates who enroll at UC with similar levels of academic preparation, 

low-, middle-, and higher-income students achieve similar levels of academic success as 

measured by persistence, unit completion after two years, and six-year graduation rates. 

• The percentage of students graduating with debt declined slightly between 2014-15 and 

2015-16, as did the average debt among borrowers. This is true both for California 

residents and f(Jr all undergraduates. 

Among California resident borrowers in every income category, most graduated with cumulative 

debt that would require 5 percent or less of their estimated average salary to repay. About 4 

percent of all UC graduates in 2015-16 had debt that would require more than 9 percent of their 

average salary to repay based on a standard I 0-year repayment plan -about the same as in 2014-

15. 

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May 12,2017 

Ms. JoEllen Saucier 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S, HOUSE OF REPFiESENT.A.T!VES 

RAYBURN HOUSE BU!LO!NG 

Executive Director of Financial Aid 

Houston College 

13022 Old Drive 

Richmond. TX 77 407 

Dear :VIs_ Souder: 

C. "BOBBY" SCOTT. VII 

H::tnldng Member 

MINORITY .. (2021 225·3725 

fAX·+ (202.1 226-539t5 

Thank you, again, for befl.>re the Subcommittee on Higher Education and Workforce 

Jcr•eiclnnncr>t at the hearing "Improving Federal Student Aid to Better Meet the Needs of 

on Tuesday, March 21,2017. 

;\sa !allow-up to your testimony, find enclosed additional questions for you submitted by 

Chairwoman Virginia Foxx after hearing. Please provide your written to Education 

Legislative Assistant Caitlin Burke no later than June 2, 2017. ller number (202) 225-6558 

should you have any questions about this request. 

Sincerely. 

Brett Guthrie 

Chairnwn 

your time and insight, and we remain grateful fbr your contribution to the 

work. 

Subcommittee on Higher Education and 

Workf(wce Development 
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!V1s. Soucier 

May 12, ?017 

Page 

Chairwoman Virginia Foxx (R-:'1(') 

As \Vt' move forward Yvith conversations about ways to reform the federal financial aid programs, 

how can we help students understand what they need to finance their education and limit their 

bonowing to that amount? Have you seen students over-borrowing in your experience as a 

Iinancial aid director? \Vhat arc some of the harms that come from over-borrowing? 
115 

[Responses to questions submitted for the record follow:] 

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IN$TITIIT~ 

Dear Chairwoman Foxx, 

Thank you for your 

Needs of Students, 

Federal Student Aid to Better Meet the 

First, you raised concerns about the unknown and significant costs at income-driven repayment 

coupled with occupation-based I your concerns that combining wi!! 

be costly and students modify their behavior 

them. Unlimited under the Grad PLUS combined with Public Service Loan For·oi;•eness 

(PSLF) after 10 years of income-based significant taxpayer-funded subsidies to many 

borrowers, including those with relatively 

These significant costs represent a lost opportunity to target limited public resources to students most in 

need of assistance. Income-driven repayment is an safety net for borrowers to repay 

their loans, but that safety net can be maintained unlimited 10 

years of from aid based 

on students' financial Such aid 

Aid delivered this way would more 

brc•ad··based forgiveness program. 

Second, you requested that I elaborate on with the Parent PLUS program, My view is thatthe 

federal government should operate a student program, not a parent loan program, given that 

crE,ditwc>rtrrv parents can obtain unsecured consumer credit on the private market. The current parent loan 

program parents with no credit history to borrow essentially unlimited amounts (up to the total cost 

of attendance less other aid received). In my view, the federal government should not make loans to parents 

that they cannot repay in the name of promoting co! lege access. 

or eliminating the Parent PLUS program may 

on parent loans. I believe efforts to reform or end 

by a careful reexamination of the limits on federal urHJergr<•uuace 

could be by a of loan limits 

with the of ensuring their continued access to 

light of concerns raised by Historically 

wewu>uu.nlle>n.eu racial disparities in income and wealth. 

Thank you again for your questions and your attention to these important issues. 

Sincerely, 
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June 2017 

Ms. Caitlin Burke 

Committee on Education and the Workforce 

U.S. House of Representatives 

2176 Rayburn House Office Building 

\Vashington. DC 20515-6100 

Dear Ms. Burke: 

lor the to testify before the House Subcommittee on 

'"·--·'·''"-·" Federal Student 

Chairwoman Foxx submitted additional questions for me that I am pleased to answer. 

I. 

is increasing 

would still 

under the old d~/inilion. Do youlltink it is an annnmr·iale 

years for an associate's 

a lower bar and students 

to ineelltivize what students 

for an associate's degree and 

Second, the HCM report, ·''''"'"''''"'''-' 

reflecting the consensus of a 

thejf.:deral dejlnition 

phase-in time (lone acadernic 

Third, l would like to state for the record that while 

maximum scheduled award to 15 credits per term would 

will require years 

requiring recalculations at the end of an award I advise Congress 10 "'!"" .!"..-''" 

on 30 credits year. This change 

students to mid-sessions, summer terms and other non-traditional sessions to earn 

the credits they may need to stay on-track for on time completion. 

This \\tilh how leading states have 

aid programs. Postsecondary 
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Analytics, a research consulting firm, of 

Indiana's financial aid reforms, ·which 

receive and/or maintain the maximum award. 

"dillerence-in-differences" analysis found "significant and in credit 

hours completed," 21" Scholars recipients, who received no 

additional money and were to maintain 30 

credit hours per ''little evidence to 

date 

i1rst enacting new, transparent that federal aid 

on time, Congress""""~:@"" 

over time, invest additional resources and increase the maximum Pell Grant mvard 

thereby raise awards lor all students, including those enrolled less than halt~time), 

2. (~{providing incentives to their program 

nr•'"''""""more intensive enrollment. qfthe ways to 

accelerating to completion 

over the summer. Can you the importance of 

when drawing down additional Pelf 

funds? au acceleration ultimate(r 

result in students exhausting their Pel/ Gram eligibility complete 

their education? 

The Consolidated Act of2017 restores a summer Pel! Grant award, which 

is an new incentive for on time completion and for acceleration. 

Because m11iority oftoday's students attend school part-time and work at least 20 

hours, l do not advocate lor an additional acceleration requirement Prior from 

implcm<:nling a summer Pcllwilh additional acceleralion an 

I appreciate this 

engagement with 

Sincerely, 

Kristin D. Conklin 

Founding Partner 

we arc all keen to lower. 

to comment !hrther !i:>r the record and welcome continued 

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JoEllen Soucier 

Executive Director of Financial Aid 

Houston Community College System 

Presented to 

Congressman Brett Guthrie (R-KY) 

Congresswoman Virginia Foxx (R-NC) 

U.S. House of Representatives 

Committee on Education and the Workforce 

Subcommittee on Higher Education and Workforce Development 

Follow-up Questions- Hearing entitled "Improving Federal Student Aid to Better Meeting the 

Needs of Students" 

May 23, 2017 
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Thank you for the follow-up questions from the hearing entitled "Improving Federal Student Aid 

to Better Meeting the Needs of Students." Student loan debt is an important conversation and 

there is so much we can do to help students reduce or eliminate the high debt they are finding 

themselves borrowing. 

QUESTION: 

As we move forward with conversations about ways to reform the federal financial aid programs, 

how can we help students understand what they need to finance their education and limit their 

borrowing to that amount? 

RESPONSE 

Financial literacy and education is an important aspect of assisting students with understanding 

student debt and borrowing responsibly as they pursue their educational aspirations. Schools 

and financial aid administrators need more flexibility and capability to require students to attend 

financial literacy and education classes (either online or in-person) before delivering loan funds 

to students. Students are borrowing without enough knowledge to make good buying decisions. 

They are unaware of the consequences that "mortgaging their future" will have on their lives. 

Students, especially new borrowers, need clear examples and continuous reminders of the 

implications of student loan debt. We are not doing enough to ensure that our students, both 

young and older, borrow responsibly. 

In my opinion, students should be asked to justify the use of federal loan funds that go beyond 

tuition, fees, books, supplies, and on-campus room and board to enable responsible borrowing 

and ensure the funds are used for indirect living expenses and other educational related 

expenses. We are prohibited from asking students how they plan to utilize the funds. This 

prevents college aid administrators from promoting responsible and good educational borrowing 

habits. It is no different than giving a student a new credit card with a high limit and telling them 

to "go at it" in terms of their spending. 

QUESTION 

Have you seen students over-borrowing in your experience as a financial aid director? 

RESPONSE 

Absolutely, yes! Many students are thinking about the "here and now" when they take out 

student loans. They are receiving large sums of aid refunds, especially at the community college 

level, and making spending decisions that don't always align with the intent and educational 

needs. Using funds to go on vacation, buy a new car, purchase expensive items, and buy 

Christmas presents are unintended and inappropriate use of tax-payer loan funds. A large 

number of students definitely use the funds for educational purposes and for what they are 

intended, especially at the higher cost universities. However, when you attend a community 

college, have other means to meet indirect living expenses, and receive a full Pell Grant to 

cover tuition, fees, books, supplies, and travel expenses, the loan funds borrowed are 

sometimes not being utilized for intended purposes. 

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Many students are borrowing federal student loans and are unable to make the minimum 

payment when it comes time to go into repayment. It is so easy to borrow the funds and, as a 

result, they add up faster than the borrower realizes. This is demonstrated by the number of 

students in deferment, forbearance, and default. 

QUESTION: 

What are some of the harms that come from over-borrowing? 

RESPONSE 

I am responding to this question with bullet points listing the harms that come from overborrowing student loans: 

Reach aggregate loan limits at the community college leaving no eligibility to pursue a 

bachelor's degree. 

Reach aggregate loan limits before completing degree program, requiring students to 

have to drop out or delay completion. 

Borrowing high loan amounts for programs that result in lower pay jobs causing students 

hardship and unable to afford loan payments. 

High loan payments preventing students from living on own or making large purchases 

such as homes and automobiles. 

Unable to afford loan payments and unaware of loan options resulting in default and 

poor credit rating early in life. 

Borrowing high loan amounts later in life causing loan debt to extend into retirement and 

social security. 

Student loan payments that are higher than automobile, rent, or mortgage payments. 

Unable to ever "get ahead" and save for their own children's education. 

CLOSING REMARKS: 

Having worked for both high cost private universities and low cost community colleges, I have 

seen students over-borrow and borrow irresponsibly primarily due to lack of understanding and 

lack of accountability measures in place by the schools and the government. Colleges have no 

ability to force financial education or limit borrowing, even when we believe the funds may not 

be needed or used for educational related purposes. There is so much that can be done to 

improve literacy and reduce the debt burden of our students, which include but are not limited 

to: 

1. Allow schools to require student loan counseling and financial education prior to 

delivering loan funds based on their student population. For example, at the community 

college it may be necessary to require students to attend student loan financial 

education each semester prior to delivering funds to ensure that students fully 

understand their current loan debt, potential loan payments at the point of repayment, 

and status of aggregate loan levels. 

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[Whereupon, at 12:28 p.m., the subcommittee was adjourned.] 

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2. Require students to complete budget worksheets and justifying the use of loan funds for 

educational related purposes. Students should be able to outline their cost of attendance 

figures and how those funds will be spent. Similar to what is required for many consumer 

loans provided by banks and lenders. 

3. Allow schools to limit or reduce annual loan limits based on student population, program 

costs, and financial data reported on the Free Application for Federal Student Aid 

(FAFSA). 

4. Promote earlier repayment measures and require students, based on income 

information, to start paying a small amount on student loans to get students used to 

making payments, even if it is just a small interest payment. 

These are just a few initiatives that could be considered in terms of helping students manage 

loan debt and borrow responsibly. 

Thank you for the opportunity to answer your questions and provide you with some information 

about student loan debt. 

4