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PAYING FOR A COLLEGE EDUCATION: BARRIERS

AND SOLUTIONS FOR STUDENTS AND FAMILIES

HEARING

BEFORE THE

SUBCOMMITTEE ON HIGHER EDUCATION, 

LIFELONG LEARNING, AND COMPETITIVENESS 

COMMITTEE ON 

EDUCATION AND LABOR

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

HEARING HELD IN WASHINGTON, DC, MAY 1, 2007

Serial No. 110–29

Printed for the use of the Committee on Education and Labor

(

Available on the Internet: 

http://www.gpoaccess.gov/congress/house/education/index.html 

(II)

COMMITTEE ON EDUCATION AND LABOR 

GEORGE MILLER, California, Chairman

Dale E. Kildee, Michigan, Vice Chairman 

Donald M. Payne, New Jersey 

Robert E. Andrews, New Jersey 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Lynn C. Woolsey, California 

Rube ́n Hinojosa, Texas 

Carolyn McCarthy, New York 

John F. Tierney, Massachusetts 

Dennis J. Kucinich, Ohio 

David Wu, Oregon 

Rush D. Holt, New Jersey 

Susan A. Davis, California 

Danny K. Davis, Illinois 

Rau ́l M. Grijalva, Arizona 

Timothy H. Bishop, New York 

Linda T. Sa ́nchez, California 

John P. Sarbanes, Maryland 

Joe Sestak, Pennsylvania 

David Loebsack, Iowa 

Mazie Hirono, Hawaii 

Jason Altmire, Pennsylvania 

John A. Yarmuth, Kentucky 

Phil Hare, Illinois 

Yvette D. Clarke, New York 

Joe Courtney, Connecticut 

Carol Shea-Porter, New Hampshire 

Howard P. ‘‘Buck’’ McKeon, California, 

Ranking Minority Member 

Thomas E. Petri, Wisconsin 

Peter Hoekstra, Michigan 

Michael N. Castle, Delaware 

Mark E. Souder, Indiana 

Vernon J. Ehlers, Michigan 

Judy Biggert, Illinois 

Todd Russell Platts, Pennsylvania 

Ric Keller, Florida 

Joe Wilson, South Carolina 

John Kline, Minnesota 

Bob Inglis, South Carolina 

Cathy McMorris Rodgers, Washington 

Kenny Marchant, Texas 

Tom Price, Georgia 

Luis G. Fortun ̃ o, Puerto Rico 

Charles W. Boustany, Jr., Louisiana 

Virginia Foxx, North Carolina 

John R. ‘‘Randy’’ Kuhl, Jr., New York 

Rob Bishop, Utah 

David Davis, Tennessee 

Timothy Walberg, Michigan

Mark Zuckerman, Staff Director 

Vic Klatt, Minority Staff Director 

SUBCOMMITTEE ON HIGHER EDUCATION,

LIFELONG LEARNING, AND COMPETITIVENESS

RUBE ́ N HINOJOSA, TEXAS, Chairman

George Miller, California 

John F. Tierney, Massachusetts 

David Wu, Oregon 

Timothy H. Bishop, New York 

Jason Altmire, Pennsylvania 

John A. Yarmuth, Kentucky 

Joe Courtney, Connecticut 

Robert E. Andrews, New Jersey 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Susan A. Davis, California 

Danny K. Davis, Illinois 

Mazie Hirono, Hawaii 

Ric Keller, Florida, 

Ranking Minority Member 

Thomas E. Petri, Wisconsin 

Cathy McMorris Rodgers, Washington 

Virginia Foxx, North Carolina 

John R. ‘‘Randy’’ Kuhl, Jr., New York 

Timothy Walberg, Michigan 

Michael N. Castle, Delaware 

Mark E. Souder, Indiana 

Vernon J. Ehlers, Michigan 

Judy Biggert, Illinois 

(III)

C O N T E N T S 

Page

Hearing held on May 1, 2007 ................................................................................. 1

Statement of Members: 

Altmire, Hon. Jason, a Representative in Congress from the State of 

Pennsylvania, prepared statement of .......................................................... 57

Hinojosa, Hon. Rube ́n, Chairman, Subcommittee on Higher Education, 

Lifelong Learning, and Competitiveness .................................................... 1

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

Keller, Hon. Ric, Senior Republican Member, Subcommittee on Higher 

Education, Lifelong Learning, and Competitiveness ................................. 3

Prepared statement of ............................................................................... 4

Statement of Witnesses: 

Boyle, James A., president, College Parents of America ............................... 34

Prepared statement of ............................................................................... 36

Martin, Dr. A. Dallas, Jr., president, National Association of Financial 

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

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

Attachment A: Suggested Metrics and Key Performance Indicators 

(KPIS) ..................................................................................................... 12

Attachment B: Calendar Year and Ongoing Timeline for Director ....... 13

Pressnell, Claude, vice chairperson, Advisory Committee on Student Financial Aid .................................................................................................... 17

Prepared statement of ............................................................................... 19

Reauthorization Proposal: A Federal Partnership for Access and Persistence ................................................................................................... 28

Swarthout, Luke, higher education advocate, United States Public Interest Research Group (U.S. PIRG) .................................................................. 30

Prepared statement of ............................................................................... 32

(1)

PAYING FOR A COLLEGE EDUCATION:

BARRIERS AND SOLUTIONS FOR 

STUDENTS AND FAMILIES 

Tuesday, May 1, 2007

U.S. House of Representatives 

Subcommittee on Higher Education, 

Lifelong Learning, and Competitiveness 

Committee on Education and Labor 

Washington, DC

The subcommittee met, pursuant to call, at 1:38 p.m., in Room 

2175, Rayburn House Office Building, Hon. Ruben Hinojosa [chairman of the subcommittee] presiding. 

Present: Representatives Hinojosa, Tierney, Wu, Bishop, 

Yarmuth, Scott, Davis of California, Hirono, Keller, Petri, Foxx, 

Kuhl, Castle, and Biggert. 

Staff present: Tylease Alli, Hearing Clerk; Gabriella Gomez, Senior Education Policy Advisor (Higher Education); Lamont Ivey, 

Staff Assistant, Education; Ricardo Martinez, Policy Advisor for 

Subcommittee on Higher Education, Lifelong Learning and Competitiveness; Rachel Racusen, Deputy Communications Director; 

Julia Radocchia, Education Policy Advisor; Kathryn Bruns, Legislative Assistant; Amy Raaf Jones, Professional Staff Member; Victor 

Klatt, Staff Director; Linda Stevens, Chief Clerk/Assistant to the 

General Counsel; and Sally Stroup, Deputy Staff Director. 

Chairman HINOJOSA [presiding]. A quorum is present, and the 

hearing of the subcommittee will come to order. 

Pursuant to Committee Rule 12(a), any member may submit an 

opening statement in writing, which will be made part of the permanent record. 

I now recognize myself and will be followed by my friend, Mike 

Castle, for an opening statement. 

Good afternoon to everyone. Welcome to the subcommittee’s third 

hearing on the reauthorization of the Higher Education Act. 

In our first hearing, we discussed how the United States is falling behind in producing college graduates. Our current investments 

in higher education are not on the scale we need to educate enough 

of our people to remain globally competitive. 

In our second hearing, we discussed how well we are preparing 

low-income and first-generation students for college. Although we 

learned that we have some very effective programs such as TRIO 

2

and GEAR UP, they only reach a small fraction of the population 

that qualifies for the programs. Again, we are falling short. 

Today we will focus on the core mission of the Higher Education 

Act, removing financial barriers to college. 

Again, the evidence shows that our national investment is insufficient and costs us tens of thousands of potential college graduates 

every year. In this weekend’s New York Times, there was an article 

on the ABCs of calculating financial aid. 

An entire industry has arisen around helping those who have the 

means to do so negotiate their financial aid packages. What happens to the students from low-and middle-income families? We 

need to find out. And my hopes are that the panelists today will 

help us answer that question. 

What happens to minority students who are still under-represented on our college campuses is another question. At our flagship public institutions and our selective private institutions, they 

just are not there. 

A recent analysis by Post-Secondary Education Opportunity 

found that while in the 2005-2006 academic year 36.9 percent of 

resident under-graduate students were eligible for Pell grants, only 

15.9 percent of students in the top 50 public institutions and only 

9.7 percent of students at the top private institutions were Pell 

grant recipients. We are asking low-income and minority families 

to shoulder an increasingly unbearable financial burden for college. 

The Advisory Committee on Student Financial Assistance reported that, between 2000 and the year 2004, the net price at a 4-

year public college rose from 75 percent to 87 percent of family income for the lowest-income families. Students from low-income 

families bear a work-loan burden of over $10,000 to attend a public 

university. 

Post-Secondary Opportunity analyzed college affordability by 

race and income and found the following: The net price to the family as a share of family income is the greatest for blacks, Asians 

and Hispanics and the least for white and other race students and 

their families. 

Additionally, a report by Excelencia in Education found that 

Latinos received the smallest financial aid packages compared to 

all other groups. 

It should come as no surprise that many families see these barriers as insurmountable. The Advisory Committee estimates that 

over the next decade we will lose between 1.4 million and 2.4 million college-qualified students who will fail to enroll because of financial barriers. 

This reauthorization of Higher Education Act is our opportunity 

to remove these financial barriers. We started with H.R. 5 to reduce the student loan interest rate. We provided the first increase 

in 4 years to the maximum Pell grant. But we must do more. 

In closing, I want to say that I would like to thank the witnesses 

for providing testimony today and for helping us identify ways we 

can remove the financial barriers to college. Thank you. 

And I now yield to the ranking member, Ric Keller of Florida, for 

his opening remarks. 

[The prepared statement of Mr. Hinojosa follows:]

3

Prepared Statement of Hon. Rube ́n Hinojosa, Chairman, Subcommittee on 

Higher Education, Lifelong Learning, and Competitiveness 

Good Afternoon. Welcome to the subcommittee’s third hearing on the reauthorization of the Higher Education Act. 

In our first hearing, we discussed how the United States is falling behind in producing college graduates. Our current investments in higher education are not on 

the scale we need to educate enough of our people to remain globally competitive. 

In our second hearing, we discussed how well we are preparing low-income and 

first generation students for college. Although we learned that we have some very 

effective programs such as TRIO and GEAR UP, they only reach a small fraction 

of the population that qualifies for the programs. Again, we are falling short. 

Today, we will focus on the core mission of the Higher Education Act—removing 

financial barriers to college. Again, the evidence shows that our national investment 

is insufficient and costs us tens of thousands of potential college graduates every 

year. 

In this weekend’s New York Times, there was an article on ‘‘the A-B-C’s of Calculating Financial Aid.’’ An entire industry has arisen around helping those who have 

the means to do so negotiate their financial aid packages. 

What happens to the students from low-and middle-income families? What happens to minority students who are still under-represented on our college campuses? 

At our flagship public institutions and our selective private institutions, they just 

are not there. A recent analysis by Postsecondary Education Opportunity found that 

while in the 2005-2005 academic year, 36.9 percent of resident undergraduate students were eligible for Pell grants, only 15.9 percent of students in the top 50 public 

institutions and only 9.7 percent of students at the top private institutions were Pell 

Grant recipients. 

We are asking low-income and minority families to shoulder an increasingly unbearable financial burden for college. 

The advisory committee on student financial assistance reported that between 

2000 and 2004 the net price at a four-year public college rose from 75 percent to 

87 percent of family income for the lowest income families. Students from low-income families bear a work-loan burden of over $10,000 to attend a public university. 

Post Secondary Opportunity analyzed college affordability by race and income and 

found, ‘‘The net price to the family as a share of family income is the greatest for 

blacks, Asians and Hispanics and least for white and other race students and their 

families.’’ Additionally, a report by Excelencia in Education found that Latinos received the smallest financial aid packages compared to all other groups. 

It should come as no surprise that many families see these barriers as insurmountable. The advisory committee estimates that over the next decade we will lose 

between 1.4 and 2.4 million college qualified students who will fail to enroll because 

of financial barriers. 

This reauthorization of the Higher Education Act is our opportunity to remove 

these financial barriers. 

We started with H.R. 5 to reduce the student loan interest rate. We provided the 

first increase in 4 years to the maximum Pell Grant. But we must do more. 

I would like to thank the witnesses for providing testimony today and for helping 

us identify ways we can remove the financial barriers to college. 

Thank you and I now yield to the Ranking Member Ric Keller of Florida for his 

opening remarks. 

Mr. KELLER. Well, thank you very much, Mr. Chairman, for 

yielding and for your comments as well. 

I also want to thank Governor Castle for temporarily sitting in 

for me. I was detained at another hearing. But just sitting in the 

same chair, I feel almost like a governor. And I am ready to start 

complaining about non-funded mandates and everything else. 

[Laughter.] 

But good morning, and thank you to all of you for joining us 

today. We are here to learn about some of the challenges facing 

parents and students in financing a college education. 

A college degree is the passport out of poverty for millions of 

American students each year. Without a college education, many 

workers today are shut out of quality, high-paying jobs. I believe 

4

our top priority should be opening the doors of higher education to 

low-and middle-income Americans. 

With this new Congress we have the opportunity to take a step 

back and review the Higher Education Act reauthorization policies 

that were developed over the past several years. At the same time, 

there are certain goals that will continue to persist. Those goals are 

acceptability and affordability. 

We have already taken several positive steps in the right direction. For example, we have increased Pell grant funding; increased 

loan limits; rewarded high-achieving, low-income students with 

Smart grants; and created incentives for low-income students to 

pursue degrees in math, science and critical foreign languages 

through Smart grants. 

However, Mr. Chairman, we all know that no amount of aid will 

truly benefit students unless institutions themselves are also held 

responsible for their role in the college cost crisis. 

With this in mind, earlier this year our committee’s ranking Republican, Representative Buck McKeon, and I introduced the College Affordability and Transparency Act to provide parents and 

students better disclosure about the cost of college. 

I am hopeful that as we move forward in this reauthorization 

process we keep this bill in mind and the fact that funding alone 

is not a silver-bullet solution to all of the crises. Rather, colleges 

and universities must play a key role in lowering the barriers to 

a higher education. 

We have a great panel of witnesses with us today to talk about 

their perspective. I look forward to hearing from them. And I thank 

you all for your presence today before our committee. 

Mr. Chairman, I will yield back the balance of my time. 

[The prepared statement of Mr. Keller follows:]

Prepared Statement of Hon. Ric Keller, Senior Republican Member, Subcommittee on Higher Education, Lifelong Learning and Competitiveness 

Chairman Hinojosa, as this is our first subcommittee hearing in the new Congress, let me congratulate you on your chairmanship. I look forward to working 

closely with you over the next two years on the very important issues this panel 

addresses, from college access to job training and everything in between. I’d also 

like to welcome all of our witnesses and thank all of you for taking the time to come 

and testify before the Subcommittee today. 

The issue of student access to college and ways in which students are financing 

their college education are important ones to me. Pell Grants and student loans 

helped me go to college. 

We’ve seen substantial increases in federal financial aid since 2000. For example, 

Pell Grant funding is up 79%, from 7.6 billion in 2000 to 13.6 billion today. The 

maximum award since 2000 has increased from $3,300 to $4,310 today. And these 

increases have made it possible for an additional million and a half students to receive Pell Grants since 2000. 

On top of this dramatic influx in new aid, my colleagues on the Education and 

Labor Committee have tried to move the national dialogue about higher education 

beyond just federal spending, to get to the heart of what I believe is the real problem: why costs are rising so dramatically and what we can do to stabilize this trend. 

With that goal in mind, we held over 30 hearings, considered several bills, and 

passed a reauthorization of the Higher Education Act in the House in the form of 

H.R. 609, the College Access and Opportunity Act. 

That last point, I believe, is at the crux of this discussion. What is causing the 

cost of higher education to skyrocket, and what can be done to slow down or reverse 

this dangerous trend? According to the most recent College Board report, over the 

last five years, there was a 35 percent inflation-adjusted increase in tuition and fees 

at four year public colleges. This increase is higher than any other five year increase 

since 1976-77. For private four year institutions, that number was 11 percent. 

5

Unfortunately, the skyrocketing cost of tuition minimizes the positive impact of 

our increases to important financial aid programs, such as Pell Grants. So, earlier 

this year, the full Committee’s Ranking Member, Congressman McKeon and I introduced H.R. 472, the College Affordability and Transparency Act, which was adapted 

from the affordability provisions in H.R. 609. Our bill aims to provide more information to students not just about college tuition prices, but also about net price, which 

we define as the amount the student must pay after grant aid is subtracted from 

tuition. This is a measure and a concept I am hopeful we will have the opportunity 

to discuss more as the reauthorization process moves forward. 

I will also be introducing the One Stop Student Financial Aid Information Act of 

2007 in the coming days, which will make it easier for students and parents to learn 

more about their financial aid options for college by providing all this information 

on one easy to access website. 

What I am most interested in learning here today is what the other ‘‘partners’’ 

in higher education are doing. I am interested in learning more about how States 

are treating higher education and whether States are doing their part to ensure 

that their citizens are able to achieve the dream of a college education. I am also 

interested in hearing more about what is being done in elementary schools and high 

schools to make sure students are academically prepared to attend college. And finally, I am interested to hear what institutions are doing to make sure that their 

costs do not continue to spiral out of control. 

Before I conclude, I’d like to thank our witnesses once again for agreeing to testify 

before the Subcommittee today. I look forward to the beneficial dialogue that I am 

sure will take place here today. 

Chairman HINOJOSA. Without objection, all members will have 

14 days to submit additional materials or questions for the hearing 

record. 

I would like to introduce our very distinguished panel of witnesses here with us this afternoon. 

The first panelist will be Dallas Martin. Dallas is president of 

the National Association of Student Financial Aid Administrators. 

NASFAA, I believe, is the acronym. He has represented the association before Congress, the executive branch and the general public for many years. Prior to joining this organization, Dr. Martin 

served as director of program planning and administration for the 

Division of Student Assistance with the American College Testing 

Program. He has worked as an administrator of financial aid and 

student personnel services. Dr. Martin received a Ph.D. in college 

student personnel administration in 1971 from the University of 

Northern Colorado. 

The second panelist will be Claude Pressnell. Claude is a member of and is representing the Advisory Committee on Student Financial Assistance. Dr. Pressnell has served as president and CEO 

of the Tennessee Independent Colleges and Universities Association. He has extensive experience in higher education and admissions and financial aid at various universities. Dr. Pressnell has 

numerous publications in higher education, and he received his 

Ph.D. from Vanderbilt University. 

The third panelist is Luke Swarthout. Luke is testifying on behalf of the U.S. Public Interest Research Group. He develops policy, 

lobbies and writes on federal student aid issues. He writes on student loan policy and federal higher education policy. Luke has authored several reports on student debt and federal aid, including 

the report entitled, ‘‘Paying Back, Not Giving Back: Student Debt’s 

Negative Impact on Public Service Career Opportunities.’’ Mr. 

Swarthout received his Bachelor’s Degree from Amherst College. 

The fourth panelist is James A. Boyle. He is the founding president of the College Parents of America. The organization was esVerDate 0ct 09 2002 16:46 Oct 29, 2007 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\HELLC\110-29\34745.TXT HBUD1 PsN: DICK
6

tablished in September 2003 to provide advocacy and resources for 

current and future college parents. His organization is a national 

membership association headquartered in Virginia. Prior to his current role, he served as vice president of brand marketing and corporate communication for Sally Mae and has over 20 years experience in the media industry. Mr. Boyle frequently testifies before 

Congress and has discussed higher education issues on various television programs. He received his Bachelor of Science in communications from Northwestern University in 1979. 

Having introduced them, I am now going to say welcome to each 

and every one of our witnesses. 

I would like to tell you just a little bit about our lighting system. 

For those of you who have not testified before this subcommittee, 

let me explain our lighting system and the 5-minute rule. 

Everyone, including members of Congress, is limited to 5 minutes of presentation or questioning. The green light is illuminated 

when you begin to speak. When you see the yellow light, it means 

you have 1 minute remaining. When you see the red light, it means 

your time has expired and you need to conclude your testimony. 

Please be certain, as you testify, to turn on and speak into the 

microphone in front of you. 

We will now hear from our first witness. Mr. Martin? 

STATEMENT OF DALLAS MARTIN, PRESIDENT, NATIONAL 

ASSOCIATION OF FINANCIAL AID ADMINISTRATORS 

Mr. MARTIN. Thank you, Mr. Chairman. 

Members of the subcommittee, thank you for inviting me to be 

here with you today. The topic you have chosen to address today 

is very important because it fundamentally affects the future of our 

nation, not only in terms of our current and future competitiveness 

in the industrialized world, but also because it addresses the fiscal 

and economic health of our nation’s citizens. 

While the United States continues to enjoy a period of economic 

prosperity that has benefited many, it has not been a period that 

has been helpful to those who are or remain at the lower end of 

our economic scale. It is well-documented that educational opportunity is not equal among all of our citizens, whether at the elementary, secondary or post-secondary level. 

As stated by the congressionally appointed Advisory Committee 

on Student Financial Assistance, low-income students who graduate from high school academically prepared to enter college still 

confront significant financial barriers. And they are also less 

knowledgeable about the financial resources that are available to 

them. 

Clearly, the cost of higher education has risen steadily as a percentage of family income. And as a result, more low-income students must abandon their plans to attend college on a full-time 

basis. Instead, many of these students are working long hours, attending college part-time and borrowing more heavily. 

In fact, these students as well as many others who have to use 

credit financing through student loans to help pay for college, are 

finding that the current federal limits on annual and cumulatively 

borrowing amounts are unrealistic in terms of their needs. As a result, students and their families are forced to turn to more costly 

7

private or alternative loan options that are not as favorable and 

which are not regulated by our federal Title IV statutes. 

While the financial aid system in the United States is the most 

comprehensive in the world and assists some 13 million students 

annually, it is still incredibly complicated and confusing to many 

students and their families. Therefore, they turn to the people who 

have the primary responsibility for bringing it all together and who 

have the expertise necessary to guide them through the process: 

the financial aid administrators. 

Nowhere else can a student and his or her family get the complete information they need about state, federal and institutional 

aid programs and the procedures and timelines necessary to navigate the process efficiently and effectively. 

Since the passage of the Higher Education Act of 1965, the aid 

programs have grown dramatically, and that growth has brought 

equal expansion in the role and responsibilities of financial aid administrators. 

Financial aid administrators, unlike many other institutional administrators, don’t graduate with a degree in financial aid administration. Such degrees do not exist. Instead, they learn from colleagues that are trained by the national, regional or state financial 

aid administrators, the education department, and in some cases, 

by state guaranty agencies and lenders. 

They are responsible for understanding and managing almost 

countless requirements, including all of the Title IV statutes, a federal student aid handbook of seven volumes of 763 pages, state 

rules and regulations that they also have to go through, donor 

scholarship requirements and lender and guaranty agency loan requirements. 

Further, these individuals have to understand all the details 

with the Family Education Rights and Privacy Act requirements, 

citizenship and immigration rules related to eligibility, selective 

service requirements, IRS requirements, state residency requirements, and numerous others that impact the student aid programs. 

These individuals juggle all these responsibilities in a constantly 

changing world of program requirements. Still, in spite of all of 

these challenges, I can assure you that the vast majority of financial aid administrators are dedicated, extremely hard-working individuals who do everything they can to provide accurate, timely information and help to families and students who without financial 

aid would be unable to achieve a post-secondary education. 

In closing, Mr. Chairman, I look forward to working with you 

and your colleagues as you develop legislation to reauthorize the 

Higher Education Act. 

The current controversy about preferred lender lists and institutional relationships with loan providers shows a need for some additional legislative clarity on what is and what is not permissible. 

But we must be careful not to impose unnecessary restrictions that 

make it impossible for responsible cooperation to occur amongst 

these parties. 

In addition, let me note that until earlier this year the Pell 

Grant maximum award had been frozen for 4 years, and we still 

need to further increase it in order for the program to achieve its 

intended goal. Likewise, we need to increase the annual and cumuVerDate 0ct 09 2002 16:46 Oct 29, 2007 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\HELLC\110-29\34745.TXT HBUD1 PsN: DICK
8

lative limits on Stafford loans. And let me also say that the LEAP 

and campus-based programs serve important financial needs to 

students, and yet they, too, are woefully under-funded. 

While all of these Title IV programs are complementary to each 

other, there are improvements that we can make to make them 

better. I pledge NASFAA’s support and the support of my members 

to assist you, Mr. Chairman, and to assist your colleagues as you 

begin your critically important legislative work reauthorizing the 

Higher Education Act. 

My members know all too well how far away we are from achieving the goal of equal opportunity for low-and middle-income families and students. Our focus first and foremost and must always be 

on meeting the financial needs of our students and families. 

Thank you. 

[The statement and attachments of Mr. Martin follow:]

Prepared Statement of Dr. A. Dallas Martin, Jr., President, National 

Association of Financial Aid Administrators (NASFAA) 

Mr. Chairman and members of the Subcommittee, I thank you for the opportunity 

to testify today. I am Dallas Martin, President of the National Association of Student Financial Aid Administrators (NASFAA). Formed over forty years ago, 

NASFAA represents student financial aid administrators at some 3,000 postsecondary institutions across the nation. 

Our association illustrates the diversity of our higher education enterprise with 

members from private and public institutions, community colleges, four-year 

schools, proprietary schools, and graduate/professional institutions. At these schools, 

NASFAA represents approximately 12,000 financial aid professionals who are dedicated to helping families apply for and receive the funds they need to send their 

students to college. Given the complexity of the state, federal, and institutional aid 

programs, it is necessary to have someone with that kind of expertise guiding families through the process. 

The topic you have chosen to address today is very important because it fundamentally affects the future of our nation, not only in terms of our current and 

future competitiveness in the industrialized world, but also because it addresses the 

fiscal and economic health of our nation’s citizens. While the United States continues to enjoy a period of economic prosperity that has benefited many, it has not 

been a period that has been helpful to those who are and remain at the lower end 

of our economic scale. It is well-documented that educational opportunity is not 

equal among all of our citizens, whether at the elementary, secondary, or postsecondary levels. 

As stated by the Congressionally-appointed Advisory Committee on Student Financial Assistance, low income students who graduate from high school academically prepared to enter college still confront significant financial barriers and are 

less knowledgeable about the financial resources that are available to them. Clearly 

the cost of higher education has risen steadily as a percentage of family income. As 

a result, more low income students must abandon plans to attend college on a fulltime basis. Instead, many of these students are working long hours, attending college part-time, and borrowing more heavily. In fact, these students, as well as many 

others, who have to use credit financing through student loans to help pay for college are finding that the current federal limits on annual and cumulative borrowing 

amounts are unrealistic in terms of their needs. As a result, students and their families are forced to turn to more costly private or alternative loan options that are 

not as favorable and which are not regulated by our federal Title IV loan statutes. 

While the financial aid system in the United States is the most comprehensive 

in the world and assists some 13 million students annually, it still is incredibly complicated and confusing to many students and their families. Therefore, they turn to 

the people who have the primary responsibility for bringing it all together and who 

have the expertise necessary to guide them through the process—the financial aid 

administrators. Nowhere else can a student and his or her family get the complete 

information they need about state, federal, and institutional aid programs and the 

procedures and timelines necessary to navigate the process efficiently and effectively. Since the passage of the Higher Education Act of 1965, the aid programs 

have grown dramatically, and that growth has brought equal expansion in the role 

9

and responsibilities of financial aid administrators. Although complicated by many 

other outside influences that I will discuss later, the financial aid administrator assists students and their families in a variety of ways. 

Even before a student applies for student aid, a financial aid administrator can 

help the student and parents to * * *

• Understand the aid process by sponsoring financial aid early awareness activities for students and families in elementary, middle-school, and high school so that 

they can not only plan for postsecondary expenses, but, more importantly, know 

that college is possible and that academic preparation is important 

• Estimate the costs of education, including direct costs (tuition, fees, on-campus 

housing, etc.) and indirect costs (transportation, other living expenses, books and 

supplies, etc.) 

• Know the deadlines for applying for various types of student aid 

• Estimate student aid eligibility 

• Gain a thorough understanding of the types of aid that are available and the 

requirements to qualify 

• Complete the Free Application for Federal Student Aid (FAFSA), which is the 

basic building block for determining the student aid package 

• Know how to complete the FAFSA when circumstances aren’t typical (a parent 

has lost a job, the student’s parents live overseas, the student was raised in foster 

care, etc.) 

• Understand when to submit an appeal to reflect unusual circumstances that 

cannot be reflected in the FAFSA 

• Determine which additional applications are needed so that the student can receive funds from all of the sources for which he or she qualifies 

• Remain aware of follow-up steps in the application process 

• Identify free scholarship search engines and resources 

• Notify individuals and families about the tax benefits they may be eligible for 

such as the Hope and Lifetime tax credits, the deduction for educational expenses, 

or the deduction for student loan interest 

Once the student applies for aid by submitting the FAFSA and any other additional aid applications, the financial aid office will notify the student of the amount 

he or she can expect to receive, and from what sources. Aid administrators can then 

help the student and their parents to * * *

• Identify alternative sources of funds if additional money is needed to meet educational costs 

• Understand student loan terminology and identify the types and sources of 

loans that are right for the borrower 

• Know when and how the student’s funds can be applied to direct costs as well 

as reimbursed for indirect costs 

• Understand the student’s rights and responsibilities as a student loan borrower 

As a student continues in school, aid administrators can help them * * *

• Stay on track to continue to qualify for funds by progressing in their academic 

programs and reapplying for aid on-time each year 

• Keep an eye on their loan debt and explain what the future repayments might 

be like 

• Handle questions about whether to defer interest payments on unsubsidized 

loans while in school or pay the interest as it comes due 

• Identify and find a Federal Work-Study job including FWS community service 

positions 

• Provide refunds and assistance when a student needs to temporarily cease studies (such as to assist with a illness in their family) but plans to resume attendance 

later 

• Find ways to budget so that the student doesn’t have to borrow excessively and 

leave school with an excessive debt burden 

Financial aid administrators even assist former students if they have financial 

difficulties—to help them avoid defaulting on a student loan—by providing information about deferments, forbearance, or loan consolidation options. 

On a larger scale, aid administrators help reach out to students, often regardless 

of the institution they plan to attend. Beyond helping students and parents individually, they also * * *

• Participate in outreach programs, such as College Goal Sunday, which is a national program offered by many states to help low-income and disadvantaged families find the means to attain a college education 

• Offer ‘‘Financial Aid Night’’ or early awareness presentations to help students 

and parents learn how to apply for financial aid and understand the differences between the various sources of aid 

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• Advocate before policy makers at both the national and state level to ensure 

that financial aid funding remains available, affordable, and accessible to families • Provide advice on current and proposed legislation affecting student aid programs to ensure they are achieving their intended purposes • Seek additional ways to assist their students, whether by investigating new 

scholarship and loan programs, exploring ways to cut student costs, or expanding 

informational sources and implementing new technology to better meet students’ 

needs. • Take part in training activities sponsored by their state, regional, or national 

financial aid associations in order to update their skills and gain new information 

about changes in the federal student aid process and best practices so they may better serve students and families • Comment on proposed federal and state regulations to ensure that the student 

aid process remains equitable and is not burdensome for families • Respond to media requests for practical information to help families • Develop detailed informational materials for students and parents, including financial literacy materials • Participate in long-range planning for the institution • Submit reports to federal and state agencies as well as institutional reports • Research and participate in technology upgrades to improve the total student 

aid process on campus 

Financial aid administrators, unlike many other institutional administrators, 

don’t graduate with a degree in financial aid administration—such degrees just 

don’t exist. Instead, they learn from colleagues, they are trained by the national, 

regional, and state financial aid associations, the Education Department, and in 

some cases by state guaranty agencies and lenders. They are responsible for understanding and managing almost countless requirements, including the Title IV statute, some 449 sections of exceptionally detailed federal regulations, a Federal Student Aid Handbook of seven volumes and 763 pages, state rules and regulations, 

donor scholarship requirements, and lender and guaranty agency loan requirements. 

Further, financial aid administrators must understand Family Education Rights 

and Privacy Act (FERPA) requirements, citizenship and immigration rules related 

to eligibility, Selective Service requirements, IRS requirements, state residency requirements, and numerous others that impact the student aid programs. 

Financial aid offices lead the way on many college campuses in the areas of automation and application of new technology. Document imaging and workflow systems 

are now key tools for many aid offices, yet they were virtually unheard of until the 

last decade. One of the more recent innovations to aid in processing efficiency is the 

Digital Dashboard technology that provides metrics and key performance indicators 

for the financial aid office. These allow staff to compare year-to-year data on applications received and processed, percentage of files selected for verification and completed, status of award packaging and loan processing, and how offers and disbursements compare to funds available for each program. A suggested metrics and key 

performance indicator list is shown as Attachment A to illustrate some of the data 

tracking and reporting that aid administrators must perform. 

As society has grown to expect more real-time communications, the financial aid 

office has also had to adjust to synchronous communication, which includes any 

form of technology-supported tool that permits students to communicate with others 

at the same time. Financial aid offices must constantly adjust their practices to 

reach students in the way that they respond to best. Gone are the days of ‘‘snail 

mail’’; today it is ‘‘real-time’’ communication or you are considered to be in the dark 

ages. To further help you understand the scope of the financial aid office activities 

Attachment B provides a calendar year and on-going monthly timeline of a typical 

financial aid administrator’s responsibilities. 

Financial aid administrators juggle all of these responsibilities in a constantly 

changing world of program requirements. Changes to the financial aid programs do 

not occur only during reauthorization of the programs. Instead, nearly every year, 

changes are made to one or more of the student aid programs. Sometimes these 

changes are made during budget reconciliation, or on an annual appropriations bill. 

In addition, changes to tax legislation may affect interest on loans, the receipt of 

scholarships, or direct tax benefit programs offered by the federal government. 

At times, current events may cause the Congress to legislate new requirements 

to remedy what is a real or perceived problem or need. Sometimes these requirements can be extremely burdensome because of the time, effort, and expense involved in creating systems and processes to address the issues, they may have virtually no impact on the amount of dollars spent in the programs. A prime example 

of one of these issues is verification of selective service registration. When imposed 

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fied as potentially not being registered, yet the requirement was imposed on everyone at great expense and is still in the law today. This is not to say that I do not 

believe in a student’s civic obligation to register with Selective Service, but the solution imposed to resolve a very small problem added unnecessary complexity to already complicated delivery system. 

Another example to illustrate how excessive burdens are imposed on the financial 

aid office involves the recently enacted ACG/SMART grant programs. The Education 

Department’s interpretation of the law for these programs has caused major problems for the financial community. On April 18, the negotiated rulemaking committee could not reach consensus due to the unworkability of the academic year progression aspect of Department’s interpretation. Further, the inclusion of the merit 

component in the law has essentially invited the Department to step into academic 

purview. The Department is now regulating grade point average calculations, the 

ability to consider a grade equivalency to advanced placement exam scores, and 

whether transfer credits are part of a student’s overall postsecondary background 

in terms of academic year progression. The definition of eligible program is problematic under the proposed regulations and the ineligibility of certificate programs for 

these grant programs was another sticking point preventing consensus. These are 

just some of the questions that still exist in these recently enacted programs that 

aid administrators have already had to begin to administer. Unfortunately, because 

reasonable resolution has not been reached on these issues, confusion and administrative complexity have been added that impact the program’s effectiveness. 

Still, in spite of all of these challenges, I can assure you that the vast majority 

of financial aid administrators are dedicated, extremely hard-working individuals 

who do everything they can to provide accurate timely information and help to families and students who without financial aid would be unable to achieve a postsecondary education. The vast majority are ethical and strive to meet their responsibilities in a professional and caring manner. They work long hours for some of the lowest administrative salaries on campus, and in many cases they are not recognized 

by other administrators for the contributions they make to the institution and the 

students they serve. 

Many financial aid offices are also expected to fulfill all of these responsibilities 

with limited financial and human resources. While the Department of Education requires all schools that participate in the Title IV federal student aid programs to 

demonstrate administrative capability and ensure compliance with all regulations, 

to my knowledge, never has a school been cited during a program review for not 

providing the personnel and fiscal resources necessary to carry out their required 

responsibilities. This failure on behalf of the Department, and some schools that do 

not provide adequate resources, has forced many financial aid offices to seek assistance from lenders, guaranty agencies, and others to print student financial aid consumer information, to perform student loan exit and entrance counseling, to establish call centers, and to provide additional staffing during peak periods in the financial aid office. While all of these are functions that the school itself should ideally 

perform, without adequate resources to conduct all of its administrative capability 

requirements, it is not surprising that some financial aid offices would accept assistance from these entities to perform those tasks. While I might question whether or 

not this was the best course of action for a school to take, I cannot fault the financial aid office for using these types of resources to comply with their regulatory responsibilities and offer service to their students. 

In closing, Mr. Chairman and members of the Subcommittee, I look forward to 

working with you and your colleagues as you develop legislation to reauthorize the 

Higher Education Act. The current controversy about preferred lender lists and institutional relationships with loan providers shows a need for some additional legislative clarity on what is or is not permissible. We must be careful not to impose 

unnecessary restrictions that make it impossible for responsible collaboration to 

occur among these parties. It should not obscure the good work you can accomplish 

to ensure that our students and their families have the financial assistance they 

need so that they may take advantage of all the opportunities a postsecondary education can provide for them. 

Let me note that until earlier this year the Pell Grant maximum award had been 

frozen for four years and we still need further increases in order for the program 

to achieve its intended goal. Likewise, Stafford Loan annual and cumulative limits 

are nowhere near what they need to be to permit undergraduate and graduate students to borrow from federal loan sources and to avoid borrowing higher cost private 

educational loans. Similarly, the LEAP and campus-based programs serve important 

financial needs of students and yet are woefully under-funded. While all of these 

Title IV programs are complimentary to each other, there are improvements that 

can be made to make them better. And, when we consider reauthorizing the federal 

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student aid programs, let us recognize that far too many of our citizens have been 

left behind. There is so much work that needs to be accomplished so that all Americans have the student aid they deserve so that they can stake a claim on the American dream. 

I pledge NASFAA’s support and the support of my members to assist you, Mr. 

Chairman, and to assist your colleagues as you begin your critically important legislative work reauthorizing the Higher Education Act. My members know all too well 

how far away we are from achieving the goal of equal opportunity for low- and middle-income families and students. Our focus, first and foremost, must be on meeting 

the financial needs of our students and families. 

Attachment A: Suggested Metrics and Key Performance Indicators (KPIS) 

PROCESSING

FASFAAs received 

Students evaluated 

Students packaged 

Students selected for verification 

Students verified 

Loan requests received 

Loan requests processed 

Summer applications received 

Summer applications processed 

Documents received 

Communications sent (e-mail, paper) 

Calls received/average wait time 

Counter visits/average wait time 

Walk-in appointments/average wait time 

Scheduled appointments/average wait time 

FUNDS MANAGEMENT CURRENT YEAR (OFFERED/BUDGETED/DISBURSED)

Federal Pell Grant 

FSEOG 

State Grant 

Institutional grant 

Federal Stafford/Direct Loan 

Federal Perkins Loan 

Institutional Loan 

Federal PLUS Loan 

Other loans 

Federal Work-Study 

Major state and institutional scholarship programs 

PRIOR YEAR COMPARISONS (HISTORICAL)

Federal 

State 

Institutional 

Endowed 

Other 

Percent of all funds that are need-based 

Percent of all institutional funds that are need-based 

Disbursements by month 

OUTCOMES (LAST TWO YEARS)

Enrollment 

Undergraduate enrollment 

Percentage receiving aid 

Percentage receiving Federal Pell Grants 

Percentage receiving state merit awards 

Graduate enrollment 

Percentage receiving aid 

Percentage receiving assistantships 

New freshmen 

Percentage receiving need-based aid 

Average need-based award 

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Average merit-based award 

Aid applicant yield vs. yield on non-applicants 

Institutional discount rate 

DEFAULT MANAGEMENT

Federal Stafford/Direct Loan default rate 

Federal Perkins Loan default rate 

Average indebtedness 

Number of federal audit findings and dollar amount 

Number of state audit findings and dollar amount 

ADMINISTRATION

Applicants per staff member 

Students per staff member 

Cost per recipient 

Cost as a percentage of dollars administered 

Staff turnover 

Counselor turnover 

CUSTOMER SERVICE

Overall rating 

Rating compared to other administrative offices 

Attachment B: Calendar Year and Ongoing Timeline for Director 

Many items listed here will differ when they are done based on individual institution timelines 

ONGOING YEAR-ROUND RESPONSIBILITIES

• Cancellations and withdrawals and refund calculations (R2T4) 

• Provide leadership in the administering and oversight of financial aid programs 

• Ensure services delivered in affective and timely manner 

• Support and enhance mission and purpose of institution 

• Supervise and manage Financial Aid Office staff 

• Council and assist students and families on financial aid matter and processes 

• Monitoring compliance with all aspects of federal, state and institutional guidelines/regulations 

• Reviews and communications federal and state legislative issues and regulation 

changes to appropriate colleagues, supervisors, Deans, and Directors 

• Act as main point of contact for Deans and Directors of other departments on 

fin aid matters 

• Tracking and management of all financial aid funds and award budgets 

• Management of financial aid office budget 

• Monthly reports such as Pell reporting and Direct Loan origination 

• Arrange and coordinate training of financial aid office staff and possibly other 

dept staff (such as Admissions and Business Office staff) 

• Respond to various surveys, such as US News, Petersons, PACCON, and 

NACUBO as needed 

• Update the Program Participation Agreement (PPA) as needed 

• Review and update as changes occur to the financial aid Policies and Procedures 

manual 

• SSCR Reports due 

• Provide financial aid presentations at Admissions orientation and visitation 

days 

• Prepare narrative and technical reports for a variety of offices and uses (i.e. 

Board of Regents) 

• Actively involved in State, Regional, and National Financial Aid Associations 

• Various times of year run Satisfactory Academic Progress (SAP) reports (i.e. at 

end of each term) 

• Reading/Reviewing/Awarding of Files 

• Verification of files 

• Review of additional information received and professional judgment requests 

• Meetings 

• Update Calendar and forms on Web site 

• NCAA Committee work 

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• Legislative work/State Advisory board work including testimony, meetings, and 

preparation of statistics 

ANNUAL RESPONSIBILITIES

• Annual Audit within 6 months of end of fiscal year 

• Submit A-133 within 9 months of end of school’s fiscal year 

• File FISAP report 

• Campus Safety report 

• Drug & Alcohol Prevention Information distributed 

• FERPA information distributed 

• Publish and make available general school and financial aid information 

• 90/10 report (for proprietary schools only) 

• Conferences and workshops put on by ED, State, Regional, National Associations and Vendors for training and networking 

EVERY 5 YEARS

• Renewal of Program Participation Agreement (PPA) 

• Master Plan review or Self-Study for re-accreditation 

JANUARY

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• Finalize awarding policies for the next academic year 

• Finalize budgets (i.e. tuition & fees, room & board, etc) 

• Train office staff on following year’s awarding policies and file review procedures. Do this every year to ensure staff updated and trained. Things change year 

to year 

• Financial aid processing begins for following academic year 

• Communicate to students the timelines and deadlines for applying for aid for 

next academic year 

• Process withdrawals and cancellations including refund of aid (R2T4) 

• Processing of financial aid applications for winter or spring term starters 

• Review & evaluate special circumstances and PJ cases for winter or spring term 

starters 

FEBRUARY

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• Receive and calculate tentative campus-based allocations by ED 

• Use tentative allocations to set up budget for awarding campus-based funds 

• Draft Cohort Default Rate sent to schools 

• Submit correction of data, submit IDC and/or PRI challenge 

• Submit appeal of campus-based program allocations due February 15th 

• Communicate reminder to students about deadlines to apply for next academic 

year 

• Work on processing files for next academic year 

MARCH

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• Final award notification for campus-based programs sent by ED for next academic year 

• Finalize budgets for campus-based funds to be awarded for next academic year 

• Communicate final budgets for campus-based funds to appropriate offices (Controller, Student Loan office if Perkins) 

• Pell Grant Administrative Cost Allowance available 

• Schedule annual audit for current academic year (typically over the summer at 

end of fiscal year) 

• Work on processing files for next academic year 

• For quarter schools work on processing applications for spring term starters 

• Process withdrawals and cancellations including refund of aid (R2T4) 

• Process Satisfactory Academic Progress report (for end of winter term) 

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APRIL

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• Processing of financial aid applications 

• Prepare for staff annual reviews 

• Prepare for annual audit 

MAY

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• IPEDS report due 

• For private schools admissions deposits due for new students by May 1st 

• Do annual staff reviews 

• Prepare for annual audit 

• Run SAP for semester schools for end of spring semester 

• Continue processing of aid applications 

• For some schools start of summer semester 

• For some schools finalize office budget information for close of fiscal year 

• For some schools finalize awarding aid information for close of fiscal year (depends on if summer is a header or trailer) 

• Processing of aid applications 

JUNE

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• For semester and quarter schools run SAP report for either end of year or 

spring semester/quarter 

• For some schools annual audit 

• Closing date to request waiver of community service expenditure requirement 

• End of federal fiscal year and end of award year 

• Return excess Perkins cash on hand to ED 

• Inventory and clearing out of files from office to storage 

• Processing of aid applications 

JULY

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• Finalize campus-based funds in preparation of fall FISAP report 

• New federal award year begins 

• Draw downs for new year can begin 

• Report completion, graduation, and transfer out rates for general student body 

and athletes via IPEDS 

• Direct loan reconciliation close-out 

• Processing of aid applications 

• For some schools annual audit 

AUGUST

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• Dept of ED sends notification of additional available campus-based funds 

• FISAP distributed to schools 

• Campus-based reconciliation form due by ED 

• Federal Perkins Safeguard Activity report due for prior year 

• For some schools start of fall semester 

• Process withdrawals and cancellations, including refunds of aid (R2T4) 

• Review awarding policies and prepare preliminary awarding policies for next 

academic year (so Admissions recruiting staff have information for initial recruiting 

visits starting in September) 

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SEPTEMBER

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• For some schools start of fall semester/quarter 

• Process withdrawals and cancellations, including refunds of aid (R2T4) 

• Freeze statistical data for semester schools 

• Work on statistical data for reports based on frozen data 

• ED distributes supplemental applications for campus-based programs to schools 

• Official Cohort Default Rates sent to schools 

• Review data and initiate appropriate action and/or appeal to change Cohort Default Rate data and/or sanctions status 

• Last date to send origination/disbursement records to COD for previous academic year 

• Work on FISAP report (due October 1st at midnight) 

OCTOBER

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• October 1st at midnight FISAP due 

• Campus Security Report due to ED and students/employees 

• Compile athletic program participation rates and financial support data (EADA 

report) and submit to ED 

• Review previous year’s awarding policies and application procedures 

• Prepare application policies for the next award year so can prepare revisions 

to online applications and physical paper applications if necessary, so ready for application cycle in December and January 

• Review informational publications 

• Review of loan application and processing procedures so can update procedures 

for next academic year (including preferred lender list if applicable) 

• Order FAFSA on the web brochures and pre-application worksheets if applicable 

• Federal satellite video conference 

• Surveys (Peterson’s, Nacubo, etc) 

NOVEMBER

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• ED sends FISAP edits to institutions 

• Regulations published by November 1st 

• Finalize application and awarding policies for next academic year 

• High School financial aid night presentations 

• Communicate to students information about deadlines to apply for financial aid 

for next academic year and scholarship search tips (and scam information) 

• Surveys (US News) 

• Submit updated Perkins cash-on-hand on FISAP 

DECEMBER

This is an ideal timeline, not necessarily reality. Some items may slide into another month based on work load and individual office timelines. These are things 

to be thinking about and working on. Every office is different. 

• ED sends appeal procedures for campus-based awards to schools 

• ED notifies institutions of needed hardware and software changes 

• Institutions return any needed FISAP edits to ED 

• High School financial aid night presentations 

• Run SAP report for fall term 

Chairman HINOJOSA. We welcome the National Association of 

Student Financial Aid Administrators’ offer to help us. 

Next I call on Dr. Claude Pressnell. 

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STATEMENT OF CLAUDE PRESSNELL, VICE CHAIRPERSON, 

ADVISORY COMMITTEE ON STUDENT FINANCIAL AID 

Mr. PRESSNELL. Chairman Hinojosa and members of the subcommittee, on behalf of the Advisory Committee on Student Financial Assistance, I want to thank you for the opportunity to provide 

testimony on the barriers to college access and persistence for lowand moderate-income families. 

I am testifying today in my capacity as the vice chair of the Advisory Committee. In fulfilling our legislative charge, the Advisory 

Committee analyzes federal policy from the unique perspective of 

the student. 

Several Advisory Committee reports have found that barriers to 

college facing our nation’s low-and moderate-income families can be 

grouped into four categories: first, financial barriers; second, inadequate academic preparation; third, poor and untimely information; 

fourth, the complexity of the application forms and process. 

First, let me begin with financial barriers. To view financial barriers through the eyes of a student, the Advisory Committee looks 

at the student work-loan burden to define what a true college cost 

is facing the families. The work-loan burden is also called net price 

or net cost, and it represents the total cost of attendance after subtracting grant aid from all sources. 

Between 1990 and 2004, the work-loan burden increased for all 

students, but especially those from the lowest-income families. This 

gap between grants and cost of attendance equals over 75 percent 

of the family income for the lowest-income families. 

Because of these financial barriers in the previous and current 

decades, millions of our nation’s best and brightest students were 

and will be forced to alter their college enrollment and degree plans 

because of the lack of finances. 

Second, academic preparation is inarguably a key factor in the 

college access and persistence. Recent data show that between 1992 

and 2004 there were increases in academic preparation as measured by courses taken. This is particularly true for low-income students. In spite of this, however, there have not been significant increases in college enrollment or degree attainment. These stagnant 

enrollment and attainment levels are directly tied to the increasing 

financial barriers. 

Third, information barriers also exist. The timing and quality of 

financial aid information is critical to college decision-making. The 

Advisory Committee has offered several recommendations for improving the quality and delivery of early financial aid information 

in our report entitled, ‘‘The Student Aid Gauntlet.’’ We continue to 

explore strategies for eliminating information barriers in our current Innovative Pathway study. 

However, we have found that in the face of the high work-loan 

burden, early information is not enough. Once low-and moderateincome students are informed about their total financial aid package, they oftentimes discover that a shortfall in grant aid makes 

college expenses unmanageable. 

Fourth and finally, the complexity of the student aid process 

poses an unnecessary barrier for students. In 2004, members of 

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rent proposed legislation in the House and Senate to amend the 

Higher Education Act addresses many of the Advisory Committee’s 

key recommendations. However, these simplification improvements 

alone will not dramatically increase access if the work-loan burden 

levels remain high. 

In sum, these four barriers—financial barriers, inadequate academic preparation, poor and untimely information, and complexity 

of the application form and processes—can negatively impact access and persistence. 

Over the decade, financial barriers have grown and compounded 

the barriers to students by weakening incentives to prepare academically, compromising the effectiveness of early information efforts, and undermining efforts to simplify the student financial aid 

application process. 

In light of the pending HEA reauthorization, the Advisory Committee would like to offer a pragmatic, feasible policy recommendation that addresses each of these barriers simultaneously. 

Increase need-based financial aid is one solution that can stimulate increases in Bachelor Degree attainment among college-qualified high school graduates and increase the number of collegequalified students and forthcoming cohorts. 

Because ensuring access to college degree and attainment is not 

solely the responsibility of the federal government, the Advisory 

Committee recommends creating a national public-private-federalstate partnership to coordinate and increase need-based aid from 

all sources. 

In such a partnership, federal matching grants would be provided to states as an incentive to coordinate with institutions and 

private organizations to guarantee Pell-eligible students financial 

access to a 4-year college or university. With such assurance, students and family would know that adequate financial aid resources 

are there, and they would work hard to be academically prepared. 

One model of this partnership is currently included in the pending bipartisan Senate HEA legislation and is designated as grants 

for access and persistence in the ACCESS Act. This is sponsored 

by Senator Jack Reed——

Chairman HINOJOSA. Excuse me, Dr. Pressnell. I am going to interrupt you and say I am going to give you an additional 2 minutes 

so that you can try to finish the Advisory Committee’s six recommendations because that is very important. 

Mr. PRESSNELL. Well, thank you very much. 

With the grants for access and persistence in the ACCESS Act 

is sponsored by Senator Jack Reed. It is bipartisan support. It is 

co-sponsored by Senator Collins, Dodd, Kennedy, Murray, and 

Sanders. And we believe that this is a good first step toward 

leveraging scarce funding to lower the financial aid barriers for 

low-to moderate-income college-qualified students. 

In essence, what this partnership would do through, actually, in 

the Senate bill, would be to take the special LEAP money and provide that as an incentive grant pool that would pull together institutional need-based aid, as well as philanthropic support and possibly even corporate philanthropic support, to leverage then the 

scarce resources at the state level as well as at the federal level, 

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to pull together to target that at Pell-eligible students that are college-qualified to attend a 4-year university. 

So what we are trying to do through this proposal is to try to 

bring all the partners to the table to bring forth an aggressive, creative solution to our current crisis in terms of need-based aid for 

low-and moderate-income families. 

And so, on behalf of the Advisory Committee members, I thank 

you for the opportunity to come before you today. And we look forward to working with you to provide technical assistance on this 

matter and others as time moves forward. 

Thank you. 

[The statement and attachment of Mr. Pressnell follow:]


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ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE

Reauthorization Proposal: A Federal Partnership for Access and 

Persistence 

Summary: The proposal would forge a new partnership among the federal government, states, and colleges to create an assurance of access and persistence for lowincome students. The proposal is necessary because college-qualified, low-income 

students face financial and procedural barriers to enrollment throughout the education pipeline. The proposal would attack this systemic problem by encouraging 

states to offer low-income students an early assurance of financial access to college, 

a simplified financial application process, and adequate grant aid to enroll and perVerDate 0ct 09 2002 16:46 Oct 29, 2007 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6621 G:\DOCS\110TH\HELLC\110-29\34745.TXT HBUD1 PsN: DICK

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sist to degree completion. The proposal would also encourage colleges to provide support services and additional persistence grants to low-income students. The most effective early intervention programs have demonstrated that an early assurance of 

financial access has generated remarkable benefits for low-income students and 

their families: students who successfully complete early intervention programs are 

more likely to be academically prepared to attend college and more likely to enroll 

in college. 

Background: The Advisory Committee on Student Financial Assistance has outlined the access and persistence problems in its last two reports, Access Denied and 

Empty Promises. In summary, the Advisory Committee has found: (1) middle school 

students lack an assurance of adequate financial aid; (2) high school students face 

an overly complex financial aid application process and inordinately high unmet 

need; and (3) college students face an overwhelming level of work and loan burden 

in attempting to persist to degree completion. The Advisory Committee is convinced 

that progress is unlikely unless the Title IV access and persistence partnership 

among the federal government, states, colleges, and K-12 schools is boldly reinvigorated during this reauthorization. 

An effective access and persistence strategy must be multidimensional; it should 

contain three critical components: (1) An early assurance of financial access; (2) a 

simplified application and adequate grant aid; and (3) persistence grants and support services. An assurance of financial access to low-income middle school students 

would create incentives for students to aspire to attend college, enroll in early intervention programs, and prepare academically to attend college. A simplified application form that is aligned with existing federal programs would make eligibility more 

transparent and application less encumbered for high school students. Additional 

grant aid and support services at college would reduce low-income students’ work 

and loan burden and improve the likelihood that they will enroll in college and persist to degree completion. 

Proposal: Congress should create a partnership that offers matching grants to 

states and institutions to form partnerships that promote access and persistence for 

low-income students. Congress could appropriate funds to states, especially those 

states that have a demonstrated commitment to early intervention leading to college 

access. States could have the flexibility to decide which low-income students to target the additional grant aid to, but could be encouraged to give priority to low-income students who have participated in a federal, state, community, or private early 

intervention program. The partnership could encourage states to provide low-income 

middle school students with an early assurance of financial access to a four-year college; it could establish a streamlined application process that included automatic eligibility, enabling states to notify every 7th grade student of his or her total drawing 

power on federal and state grant aid. The partnership would allow states to offer 

financial incentives, in the form of additional grant assistance, to high school students to participate in and complete early intervention programs. Participation in 

such programs will increase the likelihood that the targeted students will aspire to 

college and be academically prepared to enroll in college. The partnership could also 

encourage participating colleges to attract, retain, and graduate low-income students; institutions would receive matching funds to provide persistence grants and 

additional support services. Finally, the partnership could further reduce the work 

and loan burden of low-income college students by eliminating the student ‘‘work 

penalty,’’ whereby a student’s grants decrease the more (s)he works to cover unmet 

need, and thus ensuring adequate grant aid each year of college. 

Key Features: 

• The partnership could leverage additional federal funds with additional state 

and institutional grant aid through matching requirements. 

• It minimizes structural changes to existing federal programs and does not create new federal programs to compete with those that already exist. 

• It could leverage existing Title IV programs like SEOG and Work-Study to 

lower unmet need and increase enrollment and persistence. 

• It could be scalable and data generating; the partnership could initially be implemented in a select group of states, or it could be gradually phased into every 

state. 

• It could be internally accountable, holding participating students harmless 

against tuition increases and encouraging timely degree completion. 

• Students could use their grant assistance at public and private accredited colleges. 

• The federal government could encourage states to award available grant aid to 

students that participate in an early intervention program; programs that utilize 

strategies such as mentoring, counseling, academic support, providing financial information, involving parents, and visiting college campuses. 

30

• The partnership could take advantage of existing early intervention programs 

such as TRIO, GEAR UP, I Have a Dream, and those operated by private (corporate 

and philanthropic) firms. • The federal government could ensure consistency of grant aid each year of college by minimizing the current student ‘‘work penalty,’’ by which wages earned to 

cover unmet need reduce grant aid in subsequent years, as a means of encouraging 

persistence. • Colleges could encourage academically qualified low-income students to attend 

their school by offering matching grant aid, and by providing support services that 

help students persist to degree completion. 

Benefits: The proposed partnership would allow the federal government to leverage existing Title IV programs to expand low-income students’ access to college; 

thus, allowing the nation to produce more skilled workers. The partnership provides 

states with the opportunity to strengthen their need based grant programs to offset 

the rising tide of college costs. The partnership would also provide colleges with additional funds for persistence grants and support services. States and colleges would 

benefit from a student population that was more motivated, by an early assurance 

of financial access, to prepare academically and to persist to degree completion. Students of low-income families would also benefit from an early assurance of financial 

access, as it would encourage them to have higher expectations to attend college and 

they would receive better information with which to make plans to attend college. 

Students would also benefit from the reduction of financial and procedural barriers 

to college access; students would receive a simpler financial application, a clearer 

articulation of the financial aid available, and consistent grant aid each year of college, through the elimination of the student ‘‘work penalty.’’

Chairman HINOJOSA. At this time, I would ask Luke Swarthout 

to proceed. 

STATEMENT OF LUKE SWARTHOUT, HIGHER EDUCATION 

ADVOCATE, U.S. PUBLIC INTEREST RESEARCH GROUP 

Mr. SWARTHOUT. Chairman Hinojosa, other members of the committee, thanks for convening this important discussion today. I will 

be speaking on behalf of the U.S. Public Interest Research Group. 

USPIRG is a national network of state-based, non-partisan, nonprofit organizations based in 30 states and working with students 

on over 100 campuses. Over the last decade, our higher education 

project has worked to represent hundreds of thousands of student 

members here in Washington, D.C., in urging for increased access 

to an affordable education. 

I am going to briefly summarize my written testimony and focus 

on two main challenges facing students: primarily issues of needbased financial aid and issues of rising student debt. I expand on 

these issues and others in my written testimony and would be 

happy to take questions on any of them. 

The goal of our financial aid system is to ensure any student has 

access to an affordable education regardless of their financial background. Unfortunately, recent studies, including those by the Advisory Committee, have shown that we are falling short of that goal, 

that there are hundreds of thousands of students every year who 

are academically qualified but who don’t persist onto college primarily due to financial costs. 

Rising college costs and stagnant grant aid are having a real impact on college students, whether that is preventing students from 

going on to college or simply changing the way they progress 

through college. We are facing serious challenges. 

Many students are choosing not to start at a 4-year institution 

but rather start at a 2-year institution and progress along through 

that process. Other students are choosing to extend the period of 

31

how long it takes them to get through college. And while these may 

be ways to avoid debt or come up with available funds, it has the 

overall impact of decreasing graduation rates, which is something 

we should all be concerned by. 

Congress has the ability to take a strong step in solving these 

problems by increasing the maximum Pell grant award in the fiscal 

year 2008 budget. The maximum Pell grant award has remained 

stagnant for—up until this year, it remained stagnant for the last 

4 years. And it is actually worth less than it was 30 years ago. 

Last fall, the secretary of education’s Commission on the Future 

of Higher Education recommended that the maximum Pell grant 

award be funded at 70 percent of the average 4-year college tuition. 

According to the American Council on Education, such an increase 

would peg the maximum grants at approximately $6,200. The commission report provides a useful framework to start thinking about 

where we need to be funding this important grant program. 

The second major financial challenge that I would like to address 

is the issue of rising student debt. 

As college costs have increased and more of the costs have been 

pushed onto the backs of students, we have seen more college graduates leaving school with serious amounts of debt. About two-thirds 

of students graduate with loans averaging about $19,000. 

But we have also seen in the last decade a seven-fold increase 

in the number of students borrowing above $40,000 in loan debt. 

Recent reports suggest that some students, from fear of this debt, 

particularly amongst first-generation students, will dissuade them 

from persisting on to college. 

And while more research needs to be done on the issue of access, 

it is quite clear that debt is having a serious effect on affordability. 

We released a report last year, the one that the chairman referenced, ‘‘Paying Back, Not Giving Back,’’ that found that 23 percent of public college graduates with loans had too much in debt 

to manageably repay at a starting teacher’s salary. Furthermore, 

debt has been found to delay when graduates start families or are 

able to make purchases and investments like buying a home. 

We think that we need to expand and reform the income-contingent repayment system. We are supportive of proposals like Congressman Petri’s IDEA proposal and fair payment assurance, which 

is embedded in Senator Kennedy’s Student Debt Relief Act. 

But beyond simply making debt more manageable, we need to 

take the steps to reduce the increased demand for debt burden. 

And certainly, what I talked about in terms of need-based financial 

aid will have an impact on that as well. 

A college education remains an incredibly valuable investment 

and accomplishment for American students, whether that is economic or intellectual opportunities open to them. An educated populace remains an incredible investment for our society, critical to 

our civic and social and economic health. 

But we do face real challenges. I have chosen to outline two here 

today. And we hope that the committee will look hard at serious 

reforms in the upcoming Higher Education Act reauthorization discussion to help reduce barriers and ensure access for all students 

to an affordable education. 

Thank you. 

32

[The statement of Mr. Swarthout follows:]

Prepared Statement of Luke Swarthout, Higher Education Advocate, 

United States Public Interest Research Group (U.S. PIRG) 

U.S. PIRG is the federation of state Public Interest Research Groups—a national 

network of state based non-partisan, non-profit public interest advocacy organizations based inn 30 states. We work with students on more than 100 college campuses across the country. For more than a decade, our Higher Education Project has 

represented hundreds of thousands of college student members at the federal level 

by working to increase access to an affordable college education. On behalf of our 

members I want to thank you for convening this hearing and offering us the opportunity to testify. 

In my testimony I will focus on the issues and challenges that students and their 

families face as they apply to college and as students move through college. In particular, I will focus on places where federal policy affects students and their choices 

or on places where federal policy could help students and their families manage this 

process. 

I would like to highlight some of the principle challenges facing high school students as they apply to college: the lack of financial aid, an overly complicated process, and the need for additional information. 

Grant Aid 

Our financial aid system is designed to ensure that academically qualified students are able to attend college regardless of their financial situation. The federal 

government plays a critical role in guaranteeing access to college for millions of lowand middle-income students through programs like the Pell Grant and Supplemental Education Opportunity Grants. Unfortunately recent studies suggest hundreds of thousands of students are unable to progress from high school to college 

because of a lack of financial aid. 

Students face real challenges paying for higher education. Rising college costs and 

stagnant need-based grant aid has put college out of reach for many students and 

families. For other students, cost has forced them to change how they progress 

through college, starting at a 2-year institution rather than a 4-year college or extending their college career to limit loan debt or to simply come up with sufficient 

funds to pay their tuition bill. 

The Advisory Committee on Student Financial Assistance estimates that over the 

past decade between one million and 1.6 million qualified high school graduates did 

not attend college largely due to lack of financial aid. Their recent report, Mortgaging Our Future, estimates that between 1.4 and 2.4 million students will be 

similarly limited from attending college during the next decade for the same reasons. These estimates do not include the students who will choose to attend 2-year 

institutions rather than 4-year colleges due to cost. We concur with one of the key 

conclusions of their report: we must increase need-based aid from all sources—federal, state, institutional and private. 

Congress should take steps to increase funding for the Pell Grant in the FY08 

budget. In real dollars, the maximum Pell Grant award is worth less than it was 

worth thirty years ago. Over the past five years the value of the maximum grant 

award has declined relative to inflation and the cost of college. The 2007 budget 

passed this February increased the maximum grant award by $260 and marked the 

first increase in 4 years. Last fall Secretary of Education’s Commission on the Future of Higher Education called for an increase in the maximum Pell Grant to 70% 

of the average 4-year college tuition. According to a recent analysis by the American 

Council on Education that would set the maximum grant award at $6,200. The 

Commission report provides a useful measure in thinking about where the maximum Pell Grant level should be set to ensure access to college for all students. 

Admissions and Financial Aid Process 

As a college degree becomes more critical, the process for applying to college and 

for financial aid has become more complicated. As teenagers, students and their 

families are faced with a series of meaningful and difficult choices—from what institution to attend to how to finance their education. Three choices in particular stand 

out: what school to apply to, how to fill out the FAFSA form and how to interpret 

the financial aid package. 

College Choice: Even as millions of new students apply to college and universities 

every year, there is a clear absence of centrally catalogued consumer information 

to assist families in their choice of college. This information, including cost of attendance, net price, and financial aid at the institution, would help students assess 

33

comparable institutions and provide common points of comparison between institutions. Adding more clarity to the cost of college on a user-friendly website would 

help immensely as students and families navigate the college admissions process. 

Clear information would also help current students understand and track changes 

in cost over their college experience. 

The COOL (College Opportunities Online Locator) website seems a likely place to 

hold such information. However our interest is ensuring students have access to this 

information regardless of the location. 

FAFSA. The Free Application for Federal Student Aid is the federal form that students fill out to determine their eligibility for financial aid. The complexity of this 

form has led it to be compared unfavorably to federal tax returns. The consequence 

of this overly complicated form and application process is the underutilization of federal student aid. Approximately 1.5 million Pell Grant eligible students did not fill 

out the FAFSA form in 2004. 

There are many ways we can simplify this process. We support a recent proposal 

by Chairman Miller and Representative Emmanuel to use IRS data to pre-populate 

the FAFSA form with information taken from tax returns. According to The Institute for College Access and Success, nearly two-thirds of the asset or income related 

questions on the form could be filled out through such a process. 

Financial Literacy. The third procedural challenge facing students as they prepare 

to attend college involves understanding the various components of their financial 

aid package. As more students and families borrow to pay for college and as those 

loans increase in size, financial literacy has become more critical. With average student debt nearing $20,000 and a significant percentage of borrowers owing in excess 

of $40,000, the interest rates, terms and conditions of those loans will have a greater effect on the choices of graduates after they college. The distinction between federal student loans and alternative or ‘‘private’’ loans or whether a parent should 

take out a PLUS loan or a second mortgage are increasingly meaningful questions 

for American families. As we ask students and their families to shoulder a larger 

share of the burden of college finance we must ensure that they are prepared for 

this responsibility. 

Textbooks 

For families who have budgeted for the cost of college, high textbook costs can 

be an unexpected shock once a student reaches campus. While textbook costs are 

rarely, if ever, factored into tuition, a recent PIRG study found that students pay 

an average of $900 a year for college textbooks and that increased costs have been 

driven by such publisher practices as issuing frequent unnecessary new editions and 

bundling books with unnecessary additional materials. Such practices have driven 

the cost of textbooks to rise far faster than inflation and have undercut the capacity 

of students to resell their textbooks. For students at some community colleges, textbooks cost can represent up to 40% of the cost of college. As a result of rising prices, 

some students wind up sharing books or going without textbooks. At the instruction 

of Ranking Member McKeon and Representative Wu, the Advisory Committee on 

Student Financial Assistance is undertaking a study of potential textbook reforms. 

I would encourage the Committee to consider textbooks as a real financial challenge 

facing students and encourage them to take several steps to help students including 

mandating publishers disclose textbook prices when they market on campus. 

Financing College: Work and Loans 

Rising college costs and lack of financial aid have caused students to work more 

and borrow more to pay for college. The former is undermining the college experience for millions of students while the latter is increasingly dictating what students 

can do after they graduate. 

Working during the semester and over the summer has long been a part of how 

students pay for college. Indeed the federal work study program is founded on the 

belief that some work may even be beneficial to a student’s college experience. Unfortunately full-time students increasingly also work full-time jobs that undermine 

their studies and their college experience. Whereas work was once one piece of the 

balanced college experience, it is increasingly a burden particularly for students 

from low-income families. 

According U.S. PIRG’s report At What Cost?, 74% of full-time students graduating 

in 2000 worked while attending school. Of these students, nearly half worked more 

than 25 hours a week. These students reported needing to work to pay for college. 

In addition, they reported that their work schedules had a negative experience on 

their grades, limited their class schedules and the number of courses that they could 

take and their extra-curricular experience. Increased reliance on work undermines 

the college experience for millions of students. In addition, it encourages students 

34

to take fewer classes in a semester and to extend college beyond 4 years. Students 

working full-time are significantly more likely to interrupt their college careers than 

those working only part-time. 

The challenge of balancing work and school weighs heaviest on low-income students who can expect less financial assistance from their families. As a result, they 

bear a larger share of the cost of college and need to work longer hours than their 

peers from wealthier backgrounds. In addition, students from low-income families 

are more likely to describe their work as necessary to paying for their education 

than students from upper-income families. Congress can help these students by increasing federal student aid and helping to restrain rising college costs. 

The final major financial challenge facing current college students and their families is the issue of rising student debt. Over the past decade, as more of the cost 

of college has been passed onto students, borrowing has significantly expanded. 

Nearly two-thirds of four-year college students borrow to pay for college, and the 

average student graduates with approximately $19,000 in loan debt. Some recent reports suggest that fear of debt dissuades some segments of the population from attending college. While the impact of student debt on access is being explored, debt’s 

impact on affordability and the choices that students make during college and after 

graduation is increasingly well documented. Student debt dictates the career paths 

that students can follow. According to a recent U.S. PIRG report, 23% of student 

borrowers at public colleges would have unmanageable debt on a starting teacher’s 

salary. High student debt may dissuade graduates from starting a family or persuade them to delay major investments like purchasing a home. 

A college degree should be about opening doors for students, providing them with 

new opportunities whether intellectual, economic or occupational. As student debt 

expands and as more students turn to private loans to pay for college, we risk undermining that fundamental. Congress should reform and expand the income contingent repayment system for students to ensure that they can manageably repay their 

student loans without undermining the opportunity of their college education. We 

are support proposals such as the Income-Dependent Education Assistance Act introduced by Representative Petri and the language included in Senator Kennedy’s 

Student Debt Relief Act under the heading ‘‘Fair Payment Assurance.’’ Beyond simply helping students manage debt we must take concrete steps to reduce the burden 

of borrowing facing recent graduates including meaningful increases to need-based 

grant aid. 

A college education remains an incredibly important personal accomplishment, associated with greater wealth, better health and increased civic participation. An 

educated populace remains a critical priority for our national civic, social and economic health. I have outlined some of the key challenges and issues facing students. 

I would encourage you to adopt key changes to the Higher Education Act to both 

help our nation’s students and families and to keep our nation strong. 

Chairman HINOJOSA. The final presenter witness will be James 

Boyle. 

You may proceed. 

STATEMENT OF JAMES A. BOYLE, PRESIDENT, COLLEGE 

PARENTS OF AMERICA 

Mr. BOYLE. Thank you, Mr. Chairman and members of the subcommittee. I appreciate your inviting me to testify today. 

My name is Jim Boyle, and I am the president of College Parents 

of America, the only national membership organization for current 

and future college parents. 

Our group’s mission is to empower parents to best support their 

children on the path to and through college. Much as AARP does 

for seniors, we aim to fulfill that mission by providing a threepronged mix of advocacy, timely information and access to discounts, in our case, on college-related spending. 

College Parents of America is still relatively young, established 

in 2003. But the topics you are examining today—barriers and solutions to paying for a college education—have been on the minds 

35

of parents since the first tuition checks were dropped in the mail 

a couple of centuries ago. 

For decades, of course, the barriers and solutions to paying for 

college were relatively simple. The only students who went to college were those whose parents could afford to pay for it. That is 

not an era that any of us would like to revisit. 

As college-going rates increased and schools, both public and private, multiplied, the issue of paying for college got a bit more complicated, and various solutions rose forth. Academic grants, athletic 

scholarships, support from local business or community groups all 

became ways to help young people attend the college or university 

of their choice. 

Since there is little time for a complete history of paying for college in America, I will jump to the 1970s when the foundation for 

student aid that still exists today was put in place. 

For some period of years, perhaps a decade, it was possible for 

a student to achieve a college degree with support from a mix of 

Pell grant, institutional aid, federal student loans, some work 

study, and compensation from a summer job. As a 1979 graduate 

of Northwestern, I benefited from those programs myself. 

There were challenges to paying for college, to be sure. But they 

did not seem as insurmountable as the barriers for students and 

their families appear today. 

Parents of today’s college students have seen their child, in many 

instances, break through the gauntlet of competitive college admission, only to arrive anxiously on campus, where there is no rest for 

the weary, with attrition levels in the double digits. Given this scenario, parents are naturally concerned about the status of their 

own college investment and whether the money spent is supporting 

their child’s academic success in a safe, healthy learning environment. 

On our collegeparents.org Web site, we have a blog. In one of the 

topic areas, we ask parents to comment on how the cost of college 

affects their family. 

One posting from Lena began this way: ‘‘The fetal position—that 

is what I revert to every year for 3 days, as I have to fill out 

FAFSA forms and loan applications for the next year. How will I 

ever get out of debt? I feel that question as I know now that I am 

digging myself deeper and deeper into a hole. I am in so far now, 

I have to just keep going and hope that the investment in my three 

children pays in the end.’’

Another parent named Ann wrote, ‘‘I thought we had done pretty 

well saving for college in a 529 for our son, who is to be a freshman 

this fall. What an eye-opener the FAFSA was. It turns out we are 

expected to pay freshman year only every penny we have saved, an 

amount equal to 40 percent of our yearly income. I guess parents 

are supposed to stop saving for retirement, eat Ramen Noodles and 

turn the thermostat down 10 degrees in order to meet the cost of 

college.’’

So what are the paying-for-college solutions that should be congressional priorities? The three legs of the stool—aid, loan, and tax 

policies—should each play a part in the crafting of those solutions. 

We believe the three principal ways that Congress can put college within more reasonable reach are by placing more federal dolVerDate 0ct 09 2002 16:46 Oct 29, 2007 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\HELLC\110-29\34745.TXT HBUD1 PsN: DICK
36

lars into grant aid, in particular, by raising the maximum level for 

a Pell grant, making the federal student loan program more familyfriendly by increasing the limits on the amount that may be borrowed via federal student loan, and by increasing the subsidies directed toward both student and parent loans so that private loans 

are not utilized as much as they are today, and making permanent 

the now-precarious ability, due to expire again at the end of this 

year, for families to deduct a portion of college-related expenses 

and, while doing so, raising that deduction from its extremely modest $4,000 to a more reasonable amount of $12,000. 

I think a fair question to ask is, how can student aid account for 

less than 1 percent of the federal budget when more than 80 percent of the jobs that would be created in the next 10 years will require a post-secondary education? 

Since there is a decidedly mixed message when it comes to state 

funding for higher education, we face a potentially massive college 

access crisis without a substantial federal investment in student 

aid. Federal student aid is more essential than ever as a means of 

ensuring that all of America’s young people have a chance to 

achieve their potential. 

I thank you again for the opportunity to testify before you today 

and look forward to working with other members of the panel and 

those of you on the subcommittee. 

Thank you. 

[The statement of Mr. Boyle follows:]

Prepared Statement of James A. Boyle, President,

College Parents of America 

Mr. Chairman and Members of the Subcommittee, thank you for inviting me to 

testify today. My name is Jim Boyle, and I am the president of College Parents of 

America, the only national membership organization for current and future college 

parents. 

Our group’s mission is to empower parents to best support their children on the 

path to and through college. Much as AARP does for seniors, we fulfill that mission 

by providing a three-pronged mix of advocacy, timely information and access to discounts, in our case on college-related spending. 

College Parents of America is still relatively young, established in July 2003, but 

the topics you are examining today—barriers and solutions to paying for a college 

education—have been on the minds of parents since the first tuition checks were 

dropped in the mail a couple of centuries ago. 

For decades, of course, the barriers and solutions to paying for college were relatively simple—the only students who went to college were those whose parents 

could afford to pay for it. That is not an era that any of us would like to revisit. 

As college-going rates increased, and schools—both public and private—multiplied, the issue of paying for college got a bit more complicated, and various solutions rose forth. Academic grants, athletic scholarships, and support from local businesses or community groups all became ways to help young people attend the college or university of their choice. 

Since there is little time for a complete history of paying for college in America, 

I’ll jump to the 1970s, when the foundation for student aid that still exists today 

was put in place. For some period of years, perhaps a decade, it was possible for 

a student to achieve a college degree with support from a mix of Pell Grant, institutional aid, federal student loans, some work-study and compensation from a summer 

job. As a 1979 graduate of Northwestern University, I benefited from those programs myself. 

There were challenges to paying for college, to be sure, but they did not seem as 

insurmountable as the barriers for students and their families appear today. And 

whether those barriers are real—or just perceived—either the reality or the perception can have a damping down effect on college-going rates, and college success 

rates too, as it becomes more difficult for families to meet—or think they can meet—

the cost of all four years of higher education. 

37

Parents of today’s college students have seen their child, in many instances, break 

through the gauntlet of competitive college admissions, only to arrive anxiously on 

campus where there is no rest for the weary, with attrition levels in the double digits. Given this scenario, parents are naturally concerned about the status of their 

own college investment, and whether the money spent is supporting their child’s 

academic success in a safe, healthy learning environment. 

The sticker price to attend college continues to go up at a much faster rate than 

the consumer price index, and that causes great angst—and bewilderment—for parents across the country. Let me give you two examples of parent reactions. 

On our collegeparents.org Web site, we offer a blog called ‘‘Hoverings,’’ with its 

playful title meant to be a tongue-in-cheek reference to the term ‘‘helicopter parents,’’ which seems to have taken hold in the media as a way of describing today’s 

college moms and dads. The blog covers some serious issues, however, and in one 

of our topic areas we asked parents to comment on how the cost of college affects 

their family. 

One posting, from Lena, began this way: ‘‘The fetal position: that is what I revert 

to you every year for three days as I have to fill out FAFSA forms and loan applications for the next year. How will I ever get out of debt? I feel that question in the 

pit of my stomach as I know that I am just digging myself deeper and deeper into 

a hole. I’m so far in now, I just have to keep going and hope that the investment 

in my three children pays in the end.’’

Another parent, named Anne, wrote: ‘‘I thought we had done pretty well saving 

for college in a 529 for our son who is to be a freshman this fall. What an eye-opener 

that FAFSA was! Turns out that we are expected to pay, freshman year only, every 

penny we have saved, an amount equal to 40 percent of our yearly income. I guess 

parents are supposed to stop saving for retirement, eat Ramen noodles and turn the 

thermostat down 10 degrees in order to meet the cost of college.’’

The bottom line is that college costs are a barrier for the vast majority of parents 

and students because the dollars required to meet a school’s financial expectations 

are often far above and beyond what is available in a family’s monthly budget. 

Since this is a hearing on both barriers and solutions, I won’t spend any more 

time now bemoaning the situation in which we, as a nation, find ourselves. We 

should be turning to solutions, and today’s conversation can be a significant step 

in that direction. 

There is every reason to get started ASAP. There is overwhelming evidence that 

a college education helps to create a more productive workforce and a more informed 

and active citizenry. It may seem obvious, but I think it is always worth pointing 

out the nation’s economy and security depends on increasing the ability of future 

generations of students to obtain a college degree. 

So what are the paying-for-college solutions that should be congressional priorities? The three legs of the stool—aid, loans and tax policies—should each play a 

part in the crafting of those solutions. Not all are within the purview of this committee, or this committee alone, but each can play an important role in helping families to meet the high cost of college. 

College Parents of America believes that the three principal ways that Congress 

can put college within more reasonable reach are by: 

1. placing more federal dollars into grant aid, in particular by raising the maximum level for a Pell Grant; 

2. making the federal student loan program more family-friendly by, for example, 

increasing the limits on the amount that may be borrowed via a federal student loan 

and by increasing the subsidies directed toward both student and parent loans; and 

3. making permanent the now-precarious ability for families to deduct a portion 

of college-related expenses and, while doing so, raising that deduction from its extremely modest $4,000 figure to a more reasonable amount of $12,000. 

I think a fair question to ask is how can student aid account for less than one 

percent of the federal budget when more than 80 percent of the jobs that will be 

created in the next 10 years will require a postsecondary education? 

Maybe not a fair question, at least for this committee, relates to the provisions 

in the tax code on tuition tax deductibility, as compared to some other federal tax 

deductions. And that question would be: if the tax code is supposed to reflect our 

society’s values, how can we look ourselves in the mirror when a $100,000 luxury 

SUV can be deducted if used for business purposes, yet only $4,000 of college expenses are available for deduction? 

Since there is a decidedly mixed message when it comes to state funding for higher education, we face a potentially massive college access crisis without a substantial federal investment in student aid. Federal student aid is more essential than 

ever as a means of ensuring that all of America’s young people have a chance to 

achieve their potential. 

38

At College Parents of America, we are attempting to do our small part to educate 

parents about the various options for financing college, so that no doors of educational opportunity are closed due to real or perceived lack of funding choices. Here 

in the United States Congress, you can act to push those doors wide open, and I 

encourage to work together, in a bi-partisan fashion, to begin to make that happen. 

Before I close, and join with my fellow panelists in taking your questions, I want 

to say a few words about the recent student loan scandals, which I know that you 

examined in detail last week in a hearing with Attorney General Cuomo and which 

you will be pursuing some more next week in your planned session with Secretary 

Spellings. 

There is plenty of blame to go around in the whole sordid affair, and it is truly 

a shame because I believe nearly all of the individuals who serve as financial aid 

administrators, and who work for student loan companies, do so because they are 

genuinely committed to helping to make it possible for young men and women to 

attend college. 

While further investigation may prove otherwise, I believe that a few bad actors 

have taken a system that, for the most part, works well, and made it look woefully 

inadequate and unfair to student and their families. 

Amidst all the clouds, however, there is a bit of a silver lining as I believe that 

the scandal will accelerate an inevitable ‘‘consumerization’’ of the student loan business, helping to set a more desirable stage where students and their parents are 

in the driver’s seat when it comes to loan choices. 

Thank you again for the opportunity to testify before you today. I know that various pieces of legislation have been introduced, on both sides of the aisle, which are 

intended to break down barriers and provide solutions for students and families who 

are struggling to pay for college. In my limited time, I chose not to address any single one of those bills, but instead to broadly address the topic at hand. As we continue our discussion today and in the months ahead, I am pleased to offer my views 

on pending legislation, and to join with you, as appropriate, in communicating 

progress on those bills to current and future college parents across the country. I 

look forward to working with you. 

Chairman HINOJOSA. Thank you, each and every one of you. 

We are going to proceed then with questions, and I am going to 

be the first one. I want to address my first question to Luke 

Swarthout. 

You mentioned that students should have more structured financial literacy opportunities as they plan for college. Is this a significant issue as you speak with students across the country? 

Mr. SWARTHOUT. I think certainly financial literacy is an issue 

facing students as they try and navigate the FAFSA, as they try 

and make decisions about what schools to attend and as they try 

and think about what a reasonable amount of debt should be. 

Experts on financial advice sort of look at the preparedness that 

high school students enter with, and even their parents enter this 

process with a kind of a gap. So I think there is certainly an issue 

that we see from students all across the country. 

Chairman HINOJOSA. There is no question that it is very important, after listening to you and hearing last week the head of the 

Federal Reserve, Bernanke, talk about this and the importance of 

being able to put all students, high school and college, through this 

program. And I want to tell you that Mrs. Judy Biggert and I are 

co-chairs of the House Financial Literacy Caucus and would be 

pleased to work and follow-up with your organization. 

My next question to you—please answer it as brief as you possibly can. Some students start at 2-year community colleges, was 

part of your statement. And we know that some take 6 to 10 years 

to get their Bachelor’s Degree. Tell us what two solutions do you 

recommend to help students graduate in 4 to 6 years. 

39

Mr. SWARTHOUT. One piece of that is to increase financial aid so 

students who are eligible to attend 4-year institutions are able. 

And then I think Congress could help matriculation between 2-year 

and 4-year institutions by encouraging schools to have matriculation agreements that allow for the easy transfer of students from 

starting 2-year institutions into 4-year institutions. 

Chairman HINOJOSA. My next question is to Jim Boyle. 

We are not the Ways and Means Committee, as you well know. 

But one of your recommendations is for us to make federal loan 

programs more family friendly by increasing subsidies directed toward both the students and parent loans. Would you elaborate on 

that recommendation? 

Mr. BOYLE. The explosion of debt for families has, of course, occurred in the private loan arena, particularly over the past 5 years 

and certainly over the past decade. And so, the recommendation is 

that if there is increased federal subsidy for federal loans and increased investment and a raising of the limit on federal student 

loans, then more of the borrowing can occur under that program, 

which offers greater protection to families. 

The reality is that the amount of money able to be borrowed 

under a federal student loan today is only a fraction of the real cost 

of college for most families. And then they necessarily turn to these 

private loan alternatives. 

Chairman HINOJOSA. You closed by saying that we face a potentially massive college access crisis without a substantial investment 

in student aid. I couldn’t agree with you more. 

And is there any way you and your organization can help us get 

that particular message to the president, the administration, especially to the secretary of education, so that we can maybe solve this 

problem? 

Mr. BOYLE. Sure. We stand ready to work with you to do that. 

I compared our organization to AARP at the top of my statement. 

We are a little bit smaller than AARP. However, there are actually 

35 million families who fit into our category of being current or future college parents, exactly the same number that are members of 

AARP. And so, our goal is to mobilize those families to get that 

message across to you and members of the administration. 

Chairman HINOJOSA. My last question is to Dallas Martin. 

You correctly pointed out that your membership has to administer large and complex programs funded by the government with 

limited federal resources and likewise, limited resources from the 

institutions. 

Do you have some suggestions on how you would—or maybe you 

want to submit in writing—ideas for us to consider, as to how the 

government can better support the workforce that directly impacts 

our students and their families? 

Mr. MARTIN. Well, Mr. Chairman, let me say that, you know, 

first and foremost, our highest priority is obviously providing needbased assistance to the students, because that is first and foremost. 

But the people that we represent and others that work with us, 

including our colleagues in the TRIO programs and GEAR UP and 

so on, are very important, in terms of being the individuals that 

are out there to assist families in finding out about these opportunities. 

40

Unfortunately there are many families in this country, particularly low-income students, first-generation, that are unaware of 

many of the programs that are available. 

We work, for example, with a program that is sponsored by the 

Lumina Association called College Goal Sunday. And in that program, one of the things that we do across the country—we have 38 

states now that participate—is we try to go out and work with families to not only explain about financial aid programs, but to help 

them fill out the FASFA. And we do this in cooperation with these 

kinds of things. 

But many times we are dealing with volunteers. We also use a 

lot of student help and others that are in community groups. 

So one suggestion that I would make is an issue that we had 

back in 1980, and that was, the Congress had enacted at that time 

a program to provide training and financial aid and student support services. This was a provision that was enacted at that time 

but was never funded. 

The bill at that time asked for an annual appropriation of $1 million to do this across the country through a variety of different programs. It is no longer there, but it was an attempt at least, even 

back then, to look at this need. The need is even greater today. 

So that would be one suggestion. But I would be happy to try to 

provide you with some other recommendations as we go forward, 

Mr. Chairman. 

Chairman HINOJOSA. If you can give those to us in writing, I 

would appreciate it very much. 

Mr. MARTIN. You bet. 

Chairman HINOJOSA. I am going to now go to my friends on the 

other side of the aisle. And by special request by the ranking member, I am going to be going out of order. There are some who have 

other committees that they need to get to. So I am going to follow 

Ric’s suggestion and go to Congressman Petri for his questions. 

Mr. PETRI. Thank you very much, Mr. Chairman. 

I have a couple of questions. The first is for Mr. Swarthout. 

And I thank you for briefly referencing in your testimony expanding opportunities for income-contingent repayment. 

As you are probably aware, a number of other countries that 

have instituted student loan programs to help kids have access to 

higher education and pay for it, including England and I think 

Australia, have also put in place systems where people in those 

countries are able to repay their student loans by withholding directly to their inland revenue services. 

I have introduced legislation to do that in the United States that 

would cap the obligation a person would have at 15 percent of their 

after-school income. And that would eliminate the problem of default and poor credit rating. And it would also give people the opportunity to do low-income work to prepare for maybe more lucrative careers later. And it would save the government collection expenses and payers a lot of aggravation. 

I wonder if you could expand on that idea, and if you have had 

a chance to discuss it with students, if there is interest out there, 

whether you think people would participate. 

It is already done on a voluntary basis privately. But this would 

have a number of advantages, I think. 

41

Mr. SWARTHOUT. Certainly. And I referenced this in my testimony. 

I think as student loans become a larger piece of how we ask students to pay for college, a system that would assure students that 

they can pursue their personal goals, their personal careers without fear of unmanageable debt would be something that students 

would greatly appreciate and that would, I think, give them more 

confidence as they are apt to take out increasingly large loan burdens. 

I would caution to say that we don’t use the development of some 

good reform as a way to load more onto the backs of students. But 

I think this is something that would be very popular with students 

and an incredibly necessary reform as more students take out larger debt. 

And I thank you for your work on this. 

Mr. PETRI. A question for Mr. Martin, which, really, it refers to 

this sort of elephant in the room right now. And that is all the 

newspaper stories and attention that have been focused on ties and 

arrangements between private lenders largely and financial aid administrators and schools. 

And I wonder if you have any comments on your organization’s 

consideration and then voting down efforts to adopt gift and ethics 

rules a few years ago and also on the practice of accepting large 

amounts of money from different private student loan lenders to 

pay for conferences that your organization puts on for lenders. 

Mr. MARTIN. I would be happy to respond to that, Mr. Petri. 

Yes, let me, first of all, say that obviously we regret seriously 

some of the things that have come to light recently and what we 

believe is misbehavior on the part of a few individuals and very 

poor judgment. 

Let me say, in terms of—you referenced the question about our 

board voting down a particular thing on a ban on what should be 

a limit of $50 at the time, which came as a recommendation from 

a reauthorization committee that we had before the full board. 

There were a number of people that looked at this. And it was 

a very close vote. But some people said, you know, ‘‘We think we 

are ethical. We don’t need a limit on this. We know what is right 

and what is wrong.’’ There were other people that felt that the 

limit was too generous. We had some people who thought it wasn’t 

maybe enough. 

It went back and forth. And obviously like in any democratic 

body when you have a board of directors, people are going to differ. 

And they made that decision. 

But that aside, as far as what we are doing, we have been very 

concerned for a long time about what is going on in those relationships. We have talked about that. Even as our own association—

yes, it is true that we do accept sponsors at many of our events and 

receive those for our conferences. We believe that these are business partners that are important to us. 

The monies that we generate off of part of that and some of the 

monies that come out of our conferences and stuff are used to do 

things like the outreach programs that I talked about, training the 

financial aid administrators, and other kind of things that we think 

are very positive. 

42

On the other hand, at our recent board meeting, we looked at a 

lot of this. We were very concerned. And so, our board of directors 

approved a resolution not only pointing out that we don’t accept or 

condone these actions, but in that resolution, we agreed to do four 

things, which we are currently doing and taking very seriously. 

The first is for us to go back and review, even though we have 

had a statement of ethical principles for a long time—is to develop 

a new code of conduct to further define what is and is not acceptable behavior on behalf of financial aid administrators. 

Second, that code of conduct also goes forward and simply says 

that we want to review the association’s business practices, what 

are our relationships with our business partners, which will address the very issues you are talking about, about sponsorships and 

so on. 

Third, we want to make certain that then, once this code is developed, that we go out and provide an educational forum so that 

all of our people understand this and that we are serious about 

this, this is what we expect of people, of our association. 

And last, we ask every institution to sit back, take a review of 

their own operations and what they are doing on their own campuses today, to make certain that they are operating with transparency, that they are putting students’ needs first and that they 

are doing this in an honest, ethical, straightforward way. 

Chairman HINOJOSA. The time is up. And I would like to, at this 

time, recognize the gentleman from New York, Congressman 

Bishop. 

Mr. BISHOP. Thank you, Mr. Chairman. Thank you very much for 

holding this series of hearings. 

And thank you all, to the panel, for your testimony. 

At the risk of over-generalizing, it seems to me that the whole 

issue of affordability rests on three broad principles. One is that institutions price themselves in a responsible fashion. The second is 

that there be adequate sources of assistance available from the federal government, from state governments, and from the institutions 

themselves. And then the third is that the needs-analysis system 

that measures the family’s ability to pay be one that does so in a 

reasonable fashion. 

So I guess my question would be to Dr. Martin. 

Do you think our current needs-analysis system represents an 

accurate, realistic measure of a family’s ability to pay? And if not, 

what recommendations would you provide to change it? 

Mr. MARTIN. Mr. Bishop, let me say that it is always interesting 

how we look at this, in terms of who does that. You know, I have 

had some of my members that have been critical of some of the liberalizations that have been made to the need analysis over the last 

few years of where you don’t look at the overall financial well-being 

of a family by taking out home equity or other kind of things. But 

on the other hand, I think it is—you know, the response is people 

say, ‘‘Well, it is not reasonable for me to have to sell my home in 

order to send my son or daughter to college.’’ So I think we have 

to balance both of these. 

I would say I think there are some further improvements. For an 

example, I think we have put some disincentives right now into the 

need-analysis systems. One thing that we have recommended furVerDate 0ct 09 2002 16:46 Oct 29, 2007 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\HELLC\110-29\34745.TXT HBUD1 PsN: DICK
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ther refinement and improvement on, and we have made a little 

progress in, is HERA. 

But the other thing that I would do is I think right now asking 

the assessment rate on student earnings, for an example, is too 

high. I mean, students that are out there working to do this are 

doing that primarily for their own existence and so on. And then 

to have an assessment rate that you are supposed to save X percent of this so that you can go back to school just doesn’t make a 

whole lot of sense. 

And so, that is one area that I would hope that we would examine. 

Mr. BISHOP. Let me maybe sharpen the question a little bit. I 

think in 2005 tables were changed, the net effect of which is that 

about 80,000 students lost their eligibility for Pell and about 1 million students had their Pell eligibility and other Title IV eligibility 

affected. 

Mr. MARTIN. This——

Mr. BISHOP. Let me just—would you recommend that we redo or 

undo that change? 

Mr. MARTIN. Absolutely. That was a change in the state tax tables that caused that. 

Mr. BISHOP. Yes. 

Mr. MARTIN. Place-to-place differences. And we have even proposed other solutions of a better way to look at that for equity. 

Absolutely, I would strongly recommend you do that. 

Mr. BISHOP. Thank you very much. 

Mr. Swarthout, you made several references in your testimony to 

work and how work might be a disincentive. My experience has 

been that students who work on the campus tend to do better in 

class. And I think there is a fair body of evidence that suggests 

that students who work on the campus persist to graduation in 

greater numbers. 

Where is the breaking point? I mean, if, for example, we were to 

significantly increase college work study funding, something we 

have not done I think in 5 or 6 years, so as to encourage more oncampus jobs, might we be solving two problems? 

Mr. SWARTHOUT. I refer to this in my testimony. I think that we 

concur that some work is good for students. What is concerning to 

us is the growth in the number of students who are full-time, fullwork students. 

Whether that breaking point is more than 25 hours a week, I 

think it would be hard for me to see a student working more than 

25 hours a week and still getting the most out of college. 

So to be clear, I don’t exactly know where that breaking point it. 

I think what we would be supportive of is efforts to increase work 

on campus, and provided that we are mindful that pushing students to take up too much work undermines their ability to study 

and get the most out of college. 

Mr. BISHOP. Okay. I have tons of questions, but one last question 

for Dr. Pressnell. 

You make reference to one of the six recommendations that you 

would have for the Higher Education reauthorization, that we 

would work to reduce the financial barriers to transfer from 2-year 

institutions to 4-year institutions. 

44

I am assuming when you make reference to financial barriers, 

you are talking about non-acceptability of credit. Is that——

Mr. PRESSNELL. Well, actually we are referring in particular to 

the financial barriers. Most of the financial aid programs tend to 

be centered toward students that are incoming students, so usually 

the freshman year. 

Where there is a lack of financial assistance, tends to be at that 

transfer point. So, for instance, those students who desire to get a 

4-year degree but may start at a 2-year institution, their persistence to and the completion of the 4-year degree is exceptionally 

low. And part of that is attributed to the fact that there are not 

the financial assistance programs available at that transfer point. 

So it is not even so much the transfer of credits. There are some 

very innovative approaches that are going on with articulation 

agreements that we have seen across that there is, in particular, 

a financial barrier for the community college students to enter into 

that 4-year institution at that sophomore or junior level. 

Mr. BISHOP. Okay. 

Thank you, Mr. Chairman. My time is up. Thank you. 

Chairman HINOJOSA. Thank you. 

At this time, I would like to recognize the congressman from 

Delaware, Michael Castle. 

He is gone? Okay. Maybe he will return. 

At this time, I would like to recognize the congresswoman from 

Illinois, Judy Biggert. 

Mrs. BIGGERT. Thank you very much, Mr. Chairman. Thank you 

for holding this hearing. 

I would like to kind of start at the beginning maybe, and that 

is savings. I think in our country our savings rate is a negative1.1 percent. 

How could we, you know, help people, you know, to save the 

money to start out? 

I know there are a lot of states who have a college fund that parents, grandparents can put money into as young as when a child 

is born. And I have another bill, 401(k) Kids, which is to make it 

a federal program that you could put $2,000 a year into the college 

fund for a child. And that would include grandparents, aunts and 

uncles. And it would not be tax-free dollars, but in taking the interest out, which the interest would not be taxed. And it could be used 

for college. 

If they didn’t spend it all—but I think, with the price of colleges 

these days, that it certainly would be gone—but it could then be 

used to buy a first house or for retirement. 

Do any of you see that as feasible? Are people doing that today 

so that they will have the money for colleges? 

Mr. MARTIN. Ms. Biggert, let me just say that I think anything 

that we could do to encourage families that have the ability to 

save, we should be doing so. I think the 5239 plans, for an example, have proved to be very successful in a lot of places. 

Now, there are a few states that have had trouble with part of 

their funding and how they have done that in paying off. But I 

think overall that is an excellent choice. 

Again, I think one of the changes—going back and talking about 

need analysis. We have proposed that we treat that asset difVerDate 0ct 09 2002 16:46 Oct 29, 2007 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\HELLC\110-29\34745.TXT HBUD1 PsN: DICK
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ferently. Don’t count it as a student asset, but count it as a parent’s asset so it is not going to be charged as much. So those are 

kinds of things that encourage families to save. 

But let me also just be very clear. We also know that we have 

many, many families in this country that, in spite of their wanting 

to save or do it, they simply do not have the means to do so. And 

many of them have children who are very qualified who would benefit from college. 

So for families that can save, I agree; we ought to be encouraging 

them as much as we can. But we also have to recognize that some 

families, no matter what we do, are going to still need extra help. 

Mrs. BIGGERT. And even with the 2-year colleges now, I think in 

Illinois we see that some of those schools are larger than the biggest university in the state because people just have to go there. 

But even those colleges are getting so expensive that it is very difficult for them. 

Mr. Boyle, do you have any comment on this? 

Mr. BOYLE. Yes, well, I think you are going to start to see the 

impact of savings plans in a positive way in the next few years because they are still relatively young. And so, there is little comfort 

to parents who have kids in college today because they really didn’t 

have enough time to save a substantial amount. 

I would say an issue, however, that certainly pops up with current college parents is a perceived unfairness when it comes to savings. I have got, you know, pages and pages of entries from parents 

on our list-serve going through this year’s financial aid cycle where 

they believe that it is unfair that they have saved for college and 

then they learn about scholarship money being doled out to families that didn’t save. And they sort of wave their hands and say, 

‘‘Why did I bother saving? It is just coming back to bite me.’’

So I think there is a communications issue for schools to deal 

with that. And it is caught up in a whole swirl of perceived unfairness issues when it comes to merit aid and other decisions that are 

at the discretion of the financial aid office. 

Mrs. BIGGERT. Well, right now we are dealing with looking at 

getting, for example, teachers to go to rural areas, or we need more 

math students and more math teachers and more engineers, so 

that we are saying, ‘‘Well, your debt will be either taken care of, 

or at least part of it will be dissolved, if you give so much time to 

go to these areas.’’

Do you see that happening? Have students taken advantage of 

this? Is that working? 

Mr. MARTIN. Well, I could tell you that if you—well, actually 

there was an article in the paper today that talked about the government’s loan forgiveness program and some of the successes of 

people that have gone on in the government because of their forgiving loans and stuff of people to go into public service. 

If you look at, overall, the effects of loan forgiveness programs, 

however, in terms of the percentage of people that benefit by them 

and that stay in those professions, whether it is education or other 

kinds of public service, the percentage that actually take advantage 

is fairly low in terms of the offerings that are out there. 

46

You know, I am not saying that there is not some success. But 

it hasn’t been as successful as I think many of us had thought they 

would be through the years. 

And I am talking going back to 1958 with the national defense 

student loan and the forgiveness programs there. And I have 

watched it with every loan program since, and they all have a similar pattern of history. 

Mrs. BIGGERT. Thank you. 

I yield back. 

Chairman HINOJOSA. Dr. Pressnell, can you add to the answer to 

the question that Judy asked? 

Mr. PRESSNELL. You know, it is interesting. I think we are seeing 

more of those programs actually come about. States are starting to 

take a little bit more action in trying to address these particular 

shortage areas through these types of programs. 

One thing that I—if I could go back to your question about the 

savings issue, I really want to echo what Mr. Martin said about encouraging everyone to save as early as we possibly can. 

So I think we have a number of compounding problems. We don’t 

have early enough information about those two at the appropriate 

age level, so students at junior high, students in high school and 

so forth and with parent information. Then we have also exposed 

a couple of fundamental issues with the formula, the FASFA, such 

as how are those savings plans treated in the need-analysis formula. And the Advisory Committee, as well, has offered some solutions to that that would encourage savings, but it would also, 

though, assess the earnings off of that that is applicable to that 

particular college year, so those particular expenses. So you don’t 

go and assess the entire corpus against the family, but you do assess what is available to them. 

And the other is back on the work-loan burden, the comment 

about having more college work study. The big advantage of the 

college work study program, as it deals with the FASFA, is that 

federal college work study is not counted against you on the 

FASFA. But if you work off-campus, that income is assessed 

against you. 

And so, the Senate has currently proposed increasing the income 

protection allowance. We would support that. 

The silver bullet for this, however, and happens to be quite costly, is that you would hold the student earnings into the parents’ 

income and you would just count it all as one particular asset at 

the same rate. Because student earnings are assessed at a higher 

rate than the parental earnings. 

So there are some solutions that have been recommended. They 

do have price tags as well that appreciate your observations on. 

Mrs. BIGGERT. Thank you. 

Chairman HINOJOSA. At this time, I would like to recognize the 

gentleman from Kentucky, Congressman Yarmuth. 

Mr. YARMUTH. Thank you, Mr. Chairman. 

Dr. Pressnell, your answer there segued nicely into a line of 

questioning that I wanted to discuss. 

During the recent recess, we conducted two forums in my district: one, a higher education forum, where we talked to college officials, loan officers and so forth, financial aid officers; and also a job 

47

development forum, where we also talked about the relationship 

between the education system and job growth. 

And while everybody talked about the need for more money and 

increasing the Pell grants and all the things we have talked about 

today, there was a common theme that came up that talked about 

structural problems in all of our financial aid programs that were 

barriers to access and to completion; talking about the fact that if 

you were eligible for Perkins, you are not eligible for Pell, that 

some programs don’t pay for summer school, that some of the nontraditional formats of instruction where they are shrinking the 

education module are not accommodated by different financial aid 

programs. 

Is this something? Are these types of structural problems things 

that you have seen? And if they are, would you either disabuse me 

of that notion, or would you just elaborate on maybe what some 

other of these structural problems might be? 

Mr. PRESSNELL. Well, I believe the Advisory Committee has offered a number of comments, especially in the report, ‘‘Student Aid 

Gauntlet,’’ on what can be done with the FASFA, not only to simplify it in terms of being more user-friendly, moving more toward 

technological solutions with the FASFA, but as well dealing with 

some of the issues, in particular, how they impact low-and moderate-income families around student work issues, in particular, 

trying to take a look at increasing the auto zero and the simplified 

needs test for those families that are already in federally means 

tested programs. 

So we have addressed some of those structural issues that we do 

believe will help address some of those solutions. 

The federal government, the programs like the Pell grant, the 

campus-based aid programs, the TRIO programs and so forth, are 

really proven and tried programs. And they are affecting the appropriate populations. The Pell grant program definitely, within the 

right scope, is hitting especially the low-income and moderate-income families. 

The campus-based aid programs, again, are structurally sound in 

that it penetrates down to the level of the counselor and the family 

and allows some discretion in that based on Pell eligibility to increase some of those aid programs. 

The recommendation that I made in my comments about creating 

a partnership, I think, might help further some of those solutions. 

The LEAP program and the special LEAP program is already a 

federal model of the federal government partnering with state. And 

if you then can bring more people such as your corporate partners, 

your foundations that are interested in helping low-to moderate-income families and begin to pool those resources with institutional 

aid, then that puts more in there to reduce some of those burdens. 

But you are right, it is going to take multiple strategies to ultimately address this. You are going to need strategies that address 

the structure, address the formula slightly, but also maybe make 

some programs more robust. 

Mr. YARMUTH. We have, quite appropriately, I think, focused to 

a large extent on high school issues and, kind of, the traditional 

student. But in Kentucky, we have a half-million adults who have 

some college education, dropped out for a wide variety of reasons, 

48

and who are out there and would love to have the opportunity to 

complete their college education. And that is a half-a-million people 

who could better their lives and grow the economy, are important 

to Kentucky and virtually every other state. 

Are there things that you could recommend that we might do to 

address the problem of the adult student who would like to complete a college education he or she had to desert? 

Mr. PRESSNELL. Well, I think that, from a financial aid standpoint, I think that we really need to enable our financial aid directors to feel more freedom in exercising professional judgment so 

that they can base their aid on expected family income. 

Now that is available to them, but there is some hesitancy 

among some financial aid directors to exercise that too aggressively. And some of that is appropriate. But usually it tends to penalize your non-traditional students that are doing just what you 

said, where last year’s income, which is what the system is based 

upon, is not reflective of their present situation as they are about 

to enter into college. 

I think, as well, encouraging states to make sure that their financial aid programs give allowances for the non-traditional students. And I know our state, in particular, Tennessee, is trying to 

take a look at how their financial aid programs are also geared toward those non-traditional students. So you have that. 

Then, again, at the institutional level, it deals with programmatic flexibility, evening courses. And I think you are finding 

a lot of institutions are moving in that direction, online solutions 

as well as accommodating their schedules. 

Mr. MARTIN. Mr. Yarmuth, could I also just say to you that you 

talked about—I think part of it, again, is making certain that the 

adults have the information about what is available, too, because 

many of them don’t know. 

The second thing you mentioned is structural problems. Let me 

give you an example. I have worked with situations of where it is 

not unlikely that your state people get laid off from work. They lose 

their job. They are trying to get back. They are trying to get back 

into the workforce. They go back to school to begin to do that training. 

In the meantime, they may be drawing unemployment compensation or something. But there is a time limit on that. And the time 

limit doesn’t match up with, necessarily, the time limit they need 

to complete that certificate or degree. 

And somehow if we could get some of the agencies to understand 

this when we are supported both ways that if you are doing those 

kinds of things on stuff that is worthwhile, to provide that additional support. We could provide enough for the educational benefits out of the Title IV program, but it is the other big costs of that 

living. In many cases, they have families and so on that they are 

trying to deal with. So it is that kind of coordination that we need 

to look at. 

Chairman HINOJOSA. Thank you. 

I would like to now yield time to the ranking member, the gentleman from Florida, Congressman Keller. 

Mr. KELLER. Thank you, Mr. Chairman. 

49

And, Dr. Pressnell, I think I heard you mention matriculation 

agreements. Is that right? 

Mr. PRESSNELL. I did. 

Mr. KELLER. Okay. I just think that matriculation agreements 

may well be the future of college access for low-income young people. And I want to explore that a little bit with you. 

And for those who aren’t as familiar with it, take my community 

of Orlando, Florida. Probably the best deal for a 4-year education 

is at the University of Central Florida. The total package for tuition and room and board is around $12,000, of which tuition is 

about $3,400. But it is a very competitive school. The average SAT 

is over 1,200. And they have, I think, 46,000, 47,000 students going 

there. 

So they entered into a matriculation agreement with the local 

community college, called Valencia Community College, where you 

can go to Valencia literally full-time for $1,500 a year. And after 

you get your Associate’s Degree, after 2 years, you are guaranteed, 

100 percent, admission into, specifically, University of Central Florida. So it is a very cost-efficient way to get your 4-year degree and 

save a place for you in a very competitive school. 

Is that the type of matriculation agreement you are talking 

about? And what is your view of these agreements in general? 

Mr. PRESSNELL. Well, that, I think, is a very good model. And I 

think that what we find—anything that institutions can do to ease 

the transition from a 2-year institution to a 4-year institution 

should be done. And I think that each institution has the ability 

to assess what their strengths are and what program correlations 

that they have with existing community colleges in their area. 

And in many cases, the institutions are trying to work out partnerships. Four-year institutions tend to have more spaces at the 

junior, senior level. 

Mr. KELLER. Because of certain kids dropping out after the first, 

second year? 

Mr. PRESSNELL. Sometimes that occurs. 

One program, or one issue, that we have tried to address at the 

Advisory Committee in particular, which is who I am representing 

today, is that we need to also make sure that not only is there 

course-level and degree congruency in transfer, but there has also 

got to be some financial support for those students. Because once 

they again are at a 2-year institution maybe paying $1,500 a year 

and then they transfer into an institution where the costs are considerably higher, as we look at low-and moderate-income families, 

there have to be some financial incentives there for them to make 

it. 

So not just academic, but also this financial transition. 

Mr. KELLER. Okay. 

All right. Let me move on just a bit. 

Mr. Boyle, you want to increase the deductibility of college tuition from $4,000 to $12,000. Is that right? 

Mr. BOYLE. Yes. 

Mr. KELLER. Are you concerned at all about the eligibility? For 

example, right now to get the $4,000 deduction, if you are single, 

you have to make $65,000 or less, and if you are married, $130,000 

or less. 

50

Do you think that is sufficient? Or should that be raised to accommodate more middle-class folks? Or what is your opinion on 

that? 

Mr. BOYLE. We actually believe that the limit should be eliminated, that the deduction should be available to all taxpayers, that 

in terms of sending a signal about the importance of higher education, that just as the mortgage interest deduction is available to 

all, so should an investment in higher education. And the $65,000 limit, particularly for single-income single parents is extremely low, that they are caught in a true middle-classsqueeze situation, where they are not eligible for financial aid yet 

not able to deduct the cost of college. 

Mr. KELLER. Right. And I don’t disagree with you on anything 

you just said. But have you looked at what the price tag might be 

for that, or seen that CBO score for that? 

Mr. BOYLE. I looked at it about 3 years ago when we put a petition on our Web site to that effect, but I can’t recall it off the top 

of my head. 

Mr. KELLER. The reason I asked you is I had a bill called the 

Family Friendly Employer Act, and it was pretty simple and supported by just about all the Republicans and Democrats on the 

Ways and Means Committee. 

It essentially said, right now an employer can put his employee through college and deduct $5,200 a year, but he can’t put his employee’s child through college. And this says, put your employee—

or the child. And the reason is, if you are a hotel owner, the maid 

or janitor may not want to go to college but the 17-year-old kid 

might want to. 

Mr. BOYLE. Yes. 

Mr. KELLER. And it is a very narrow thing. 

And the number I got back from CBO was so sky-high, they just 

assume every employer in the whole country will do it, and they 

will do the max. And it just died because of that. 

And so, that is one of the challenges we have when we face very 

meritorious proposals like the Family Friendly Employer Act or the 

proposal you just made. And we struggle with ways to get around 

that. 

Do you have any wisdom as to how we might make our best case 

to finally get some incentives in place that will help more low-and 

middle-income kids go to college? 

Mr. BOYLE. Well, I think it is stressing the importance of college 

as compared to some of the other deductions that are in the tax 

code. 

I mean, the one I like to speak about, that was in my written 

testimony, is, if the tax code is supposed to be reflective of our society’s values, how can we look at ourselves in the mirror when you 

can deduct $100,000 for the cost of a luxury SUV used for business 

purposes and you can deduct only $4,000 for the cost of a college 

education? 

Mr. KELLER. Well, thank you. 

And, Mr. Chairman, my time is expired. 

Chairman HINOJOSA. Thank you. 

I want to add that when you have your proposed legislation 

costed, you said that they figured that everyone would take advanVerDate 0ct 09 2002 16:46 Oct 29, 2007 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\HELLC\110-29\34745.TXT HBUD1 PsN: DICK
51

tage of it and the cost was prohibitive. What if they were to redo 

the calculations and take a look at the low-income, moderate-income students or students from low-income and moderate-income 

families and see if possibly your idea might increase accessibility 

to higher education? 

And using the fact that many of our prisons are filled with minority men and women coming from that group of low-income, moderate-income, that it would probably reduce those numbers and 

thus improve the economy of our country and especially improve 

the quality of life of their families. 

Would you give that some consideration? 

Mr. KELLER. Well, I absolutely would. I am a practical man. And 

90 percent of a loaf is better than no loaf at all. And right now I 

have no loaf. So I think that the whole target you are trying to 

reach is low-and moderate-income families. And so, if we could 

somehow narrow it to limit the CBO scores, that is something I 

would be very receptive and willing to do. 

Chairman HINOJOSA. Thank you. 

At this time, I would like to recognize the gentleman from Virginia, Congressman Robert Scott. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Mr. Boyle, let me follow up on that last question. If we had some 

new money on the table, would it make more sense to spend it on 

deductions or increasing Pell grants? 

Mr. BOYLE. Well, I guess, the way the question is posed, I think 

it should be probably 60-40: 60 percent toward increasing Pell 

grants and then 40 percent made available for ability to increase 

deductions. 

Mr. SCOTT. Okay. 

Mr. Martin, do you know how many low-income students fail to 

go to college because they just can’t afford it? 

Mr. MARTIN. There have been different estimates, Mr. Scott. The 

Advisory Committee recently had come out with a report that said 

there was more than 1 million a year that are qualified and not 

able to go because of this. There are some estimates higher than 

that, some lower. But it is an awful lot of them. 

And let me say that, again, to answer your question that you 

asked Mr. Boyle, I would put the money into Pell grants because, 

for many of the low-income students, these are not people that necessarily are going to benefit with that deduction. And I understand 

the other part of it. But I think we have a real crisis in this country with low-income people. And we cannot afford not to put them 

first on the pecking order. 

Mr. SCOTT. Well, let me ask the other two panelists on the question, whether we had some more money to spend, would it be in 

deductions or increase the Pell grants. 

Mr. PRESSNELL. Yes, Mr. Scott, Dr. Martin indicated that the Advisory Committee had issued a report that 1.4 million to 2.4 million 

students are going to be lost in this decade. That, by the way, are 

students who took and completed Algebra II and/or Trigonometry. 

So these are highly college-qualified students. 

Mr. SCOTT. Yes. 

Mr. PRESSNELL. I believe that if the federal government wants to 

issue a transformative difference in our society in terms of breakVerDate 0ct 09 2002 16:46 Oct 29, 2007 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\HELLC\110-29\34745.TXT HBUD1 PsN: DICK
52

ing the cycle of poverty, reducing dependency on other federally 

funded welfare programs, the money needs to go into the Pell grant 

program so that low-and moderate-income families can have access 

into higher education. 

Mr. SCOTT. Thank you. 

Mr. SWARTHOUT. I concur. It ought to be our priority, it ought to 

be Congress’s priority, it ought to be our society’s priority to ensure 

that all students, regardless of their financial background, have access to college. 

The Pell grant is a time-tested program that is the best way of 

guaranteeing that fundamental promise to all students. And I 

would recommend that be the priority. 

Mr. SCOTT. Thank you. 

Talking about people that have lost financial aid, about 200,000 

have lost it because of the drug convictions. Does anyone have a 

comment on whether or not we ought to continue the prohibition 

against financial aid to those who have drug convictions? 

Mr. MARTIN. Mr. Scott, let me say that—and I know there was 

some modification of that. Mr. Souder, who is a member of this 

subcommittee, had made some modifications to change that, so it 

is just during the time that the individual is receiving student aid. 

That is a welcome change and clarification. It narrows it somewhat. 

Personally, I would say that, if I had to choose, I would like to 

eliminate it, because I think, in many cases, it is not significant. 

But the least I would do is I would at least have the process by 

which the time the student is sentenced, or the individual sentenced, depending on the severity of the case, I would allow the 

judge and the individual to make that choice of whether or not that 

this should go away, not just across the board. 

Because there are huge differences. I am not trying to protect 

people that are out there that are peddling, selling drugs that are 

really the criminals. But unfortunately there are some in our society who have experimented with something, small amounts or 

something, and the cost of this is they have messed their lives up 

forever. 

And sometimes I think if we could help them and get a hand up 

and realize the difference, it might be worthwhile. 

Mr. SCOTT. Thank you. 

Mr. PRESSNELL. Mr. Scott, taking a slightly different perspective, 

these additional questions on the FASFA just add to the complexity 

of the process for students applying for financial aid, such as the 

selective service question and the drug question. 

The Advisory Committee has taken the position that the FASFA 

needs to be as streamlined as absolutely possible, so that it does 

address the proper administration of the aid program. So the Advisory Committee’s position is that those questions be removed from 

the form. 

Mr. SCOTT. Thank you. 

On the contingent payment plan, what is a reasonable percentage of income on a contingent repayment for students paying back 

student loans on a contingent? 

Mr. SWARTHOUT. Sure. The best study on this came out last year 

from an economist, Sandy Baum. And she said that some amount 

53

of income should be protected, anything about $18,000, $19,000, 

equivalent to 150 percent of poverty. 

A recent graduate who has that income needs to devote most of 

that to housing and food and transportation, but that, above that, 

it would be reasonable to expect about 15 percent of what she 

called discretionary income, which would be above about $19,000, 

in her estimation, which would make sure that you are protecting 

people who are with the lowest income and targeting your subsidy 

to the students with the most need, people entering public service 

careers, teachers who start with low-income, rather than helping 

students who graduated and are lucky enough to have more lucrative income. 

So I would use that as a litmus test. 

Mr. SCOTT. My time is just about up. I wanted to get in one more 

question, and that is whether or not students ought to be able to 

refinance their loans any time they want, rather than getting stuck 

and locked in. 

You can redo a mortgage whenever you want. Is there any reason you can’t have multiple refinancing of student loans? 

Mr. MARTIN. Well, this has been an interesting topic. And the 

question is, when you do that at certain times, it obviously can be 

very costly. And if we had all the resources we need, I would say 

absolutely. 

I would say if you are going to allow the multiple refinancing on 

these, I would at least look at means testing of who qualifies, because if people are out there making lots of money, very successful 

from their degrees—and there are a lot of these people that are 

simply going out and doing that, you are turning around and asking the taxpayers to help continue subsidies that you have already 

received because you have got your loan. They have already had 

the benefits of that. You are out there. 

I understand for lower-income people or people that are struggling, public-interest kinds of jobs and stuff, aren’t making much, 

yes, because of the debt thing. I think there are other ways that 

we could deal with restructuring, such as what Luke has mentioned here with some repayment options to give people better relief by restructuring the programs. 

The likelihood of people that have to go out and refinance all the 

time would be greatly reduced. 

Chairman HINOJOSA. At this time, I would like to yield time to 

the gentlewoman from California, Congresswoman Davis. 

Mrs. DAVIS OF CALIFORNIA. Thank you, Mr. Chairman. 

Thank you to all of you for being here. I know that you had an 

opportunity to cover some of the financial literacy areas. But I just 

wanted to see if you have any particular suggestions. 

And, Mr. Boyle, heading up the parents group, how do we educate parents better? Are there some avenues out there that haven’t 

been addressed very well? Do you think schools have some best 

practices that you have seen? Or is that a whole other area that 

we need to work harder and better in? 

Mr. BOYLE. Well, I think in the area, as referenced earlier, of 

public and private partnership, this is one that lends itself well to 

that. 

54

I think the Jumpstart Group Coalition has nearly every major financial service company as part of it. And every year when they 

present their programs, there is no shortage of wonderful programs 

going on across the country. Yet it still doesn’t seem to make a 

dent into the issue. 

So I think it is investing those programs into areas and reaching 

families who aren’t necessarily just their customers but who are potential customers and could benefit from that information. 

Also I think there is something to be said for better training of 

college counselors at the high school level so that they can better 

address financial questions of parents, specifically as it relates to 

paying for college. 

I think the situation right now is most of them are trained on 

the academic side in how to get into college, but paying for it is 

certainly part of the equation. Many families can’t get those questions answered and then often are turning to outside, sometimes 

very expensive, resources in order to get the answers to the questions that they need. 

Mr. PRESSNELL. If I might, the Advisory Committee is currently 

involved in an Innovative Pathways study. And a part of that study 

is actually looking at early information and what is appropriate information at various levels. And so, you know, not the same information is applicable to all age groups. 

But we are looking at—the University of Virginia has a model 

right now, that they are taking some of their best and brightest recent graduates and placing them alongside counselors in high 

schools for the sole purpose of encouraging students to go to college 

and how to navigate the financial aid system. So that is one thing 

we have seen. 

The other is that we are looking at, are there other federal communication and state communication avenues that we need to piggyback upon, for instance, federally means-tested programs, free 

school lunches and so forth. Why not at that early age communicate to families, communicate to the student there is financial aid 

available for you to go to college and enter into the assumption, 

‘‘Where are you going to go, and by the way, there is money available for you,’’ early on? 

So the Advisory Committee is in the midst of a study that is 

looking at appropriate information for appropriate folks clear up 

through independent adults and parents as well. 

Mrs. DAVIS OF CALIFORNIA. Yes, okay. 

Mr. MARTIN. Ms. Davis, let me also say that last year—I mean, 

the last Congress, Congressman Akaka had introduced a financial 

literacy bill. And we, as an association, had endorsed that and so 

on. Unfortunately it never became law, but I thought it was a good 

model as a starting place. 

But I think the Advisory Committee is on the right track of doing 

it. Part of the problem is getting the information that is appropriate to the families that need it. And we need to find other delivery vehicles. 

I mean, I know it sounds silly, but, you know, when I open up 

my mail with a bill or something, there is always some little brochure or something in there. Why don’t we start putting things in 

there to help families make some good decisions? 

55

I mean, you want to ask some people to be good citizens? Let’s 

go out and ask some of these corporations that stuff it with all the 

other advertisements in my bill, let’s ask them to put something 

worthwhile that might make a difference in this country. 

Mrs. DAVIS OF CALIFORNIA. Yes. I appreciate that. Thank you. 

We have tried to think of ways of making—I know you have addressed the FASFA as well and whether even in the tax form people should automatically be told that they qualify and they may 

have to answer some additional questions. 

But at least the financial questions are essentially done. And 

people don’t have to go back and go into a fetal position, as you 

mentioned earlier, in order to, you know, have so much anxiety 

around this. And I think that that is one of the concerns that we 

have. 

One of the pieces of information that perhaps you don’t have to 

go into great detail right now, but trying to clarify for people: What 

do these private, or so-called unregulated, loans look like? What 

greater impact in terms of the debt that students will incur as a 

result of that? How the comparison is, just so people have, I think, 

that understanding would be helpful. 

And the other thing is just, do you have a sense of what breaks 

down—students take out these loans. But they also use credit 

cards. Do you know what percentage of what the debt that they actually incur comes from credit card debt that they feel that they 

need to incur? And everybody encourages them to do that, of 

course. Is that a very large percentage of it? Or is it a smaller percentage really and not a significant? 

Mr. MARTIN. It is a growing percentage of people that are using 

credit cards to help finance this. And, yes, there have been some 

studies, and I will be happy to make certain that we can get you 

that information. You know, it is a serious concern in terms of this. 

I also would say on the market, I think the other thing that is 

amazing to me—and you talked about the private loans and they 

are not as favorable. It is amazing to me how many cases we have 

uncovered of people taking out private loans without going first 

and exhausting their eligibility for the federal programs. 

And I think a lot of that is due to the aggressive marketing that 

goes directly from some of these providers of these loans directly 

to families and such. And they are giving them this because of slick 

marketing material. They are not making it clear that, in fact, families are eligible for other kinds of loans and so on. 

And I hope that that is something in the regulations that we deal 

with here soon that we can address, so that families are at least 

aware of those options. 

Mr. SWARTHOUT. And if I might follow up on the point about private loans, I think one of the things that we have seen in the stories over the last month is the proliferation of misinformation 

around private loans. And these are loans that are determined, unlike federally guaranteed loans, based on your credit score, whether 

you have a credit-worthy co-signer. 

Frequently they are advertised by ‘‘rates as low as.’’ ‘‘Rates as 

low as’’ is not a particularly instructive way of educating a consumer. If 1 percent of students get the ‘‘as low as’’ rate but the bulk 

of—you know, and that might be 7 percent—but there are a whole 

56

bunch of students up at 15 percent, we are doing students as consumers and families a disservice by failing to force greater clarity 

in this process, not the least of which so that they can be compared 

across to federal loans, where, as Dallas mentioned, there are still 

a disturbingly large number of students who do not max out on 

their Stafford loans before taking out private loans. 

Mr. BOYLE. And part of it is the timing issue. Today, May 1st, 

is the day when students, you know, across the country have to inform a school that they are planning to attend. And they have only 

received those acceptances in the last 30 days, for the most part. 

And so, the family, if they haven’t focused on how to meet the cost 

of college, suddenly has this time crunch, and that is when these 

direct mail pieces are hitting them. 

They are looking for a way, ‘‘How do I find the money? My goodness, it is going to cost X amount.’’ And they are responding to that 

need. It is almost like, you know, you are coming toward your 

mortgage closing date and, you know, you are scrambling to put together the finances. 

Closing date for going to school is really today, and it puts a tremendous amount of pressure on families to make a decision quickly. 

Mr. PRESSNELL. But the private label loans are, you know, having an increasing role in higher education finance largely because 

federal and state financial aid programs have not kept pace. 

And we just have had a slight increase in the Pell. The increase 

in the loan limits has been a long time coming. And the freshman 

loan amount is still significantly low, 26, 25, and has been there 

for many, many, many years. 

And so, as these programs remain stagnant, there are other solutions that come in to fill the gap. 

Mrs. DAVIS OF CALIFORNIA. Right, and that don’t necessarily represent the true cost to the students as well. 

Mr. PRESSNELL. True. 

Mrs. DAVIS OF CALIFORNIA. Yes. 

Thank you, Mr. Chairman. 

Chairman HINOJOSA. I want to make some closing remarks and 

say that last week I had six students from my congressional district in south Texas come visit Washington and visited me in my 

office. All six of them were Hispanic. Five were young women and 

one was a young man, all graduating seniors who had scored over 

1,250 on their SAT scores and were helped to come to the Northeast to visit about six or seven colleges and universities and see if 

they could select one to attend. 

And after spending a couple of hours with them over lunch and 

in my office, I asked each one of them to tell me what was the key 

to the success that they had experienced in scoring so high and 

being able to have an opportunity to select a college to attend. And 

one by one answered, ‘‘It was my mother who was very involved 

with me in elementary school and all the way through high school.’’ 

The second one, it was the mother. The third one said, ‘‘It was my 

mother and father.’’ The answers were the same for all six. 

And it leads me, then, to what Buck McKeon’s group, which included me, went to China to visit some of the universities with the 

greatest number of engineering graduates in that country. And we 

57

asked over and over at each university some of the students, ‘‘Why 

do you think that you all have been so successful in international 

competition and scored first or second almost every one of the last 

10 years?’’ And again, their response was that they had parents 

and grandparents who had spent a lot of time with them to get 

them to the point that they are at those universities. 

So I conclude by saying that parental involvement, together with 

Judy Biggert’s recommendation on savings, is definitely a start. 

And when we look at the groups that are shown in Dr. 

Pressnell’s report and testimony, the academic barriers, the low-income and moderate-income group are the ones that I believe Congress is and should be looking at finding ways to get that parental 

involvement, rewards for starting a savings account, like they do 

in China, which is 5 percent of every check or salary that is paid 

to their family, and then to follow that with incentives that would 

hopefully get those individuals, those young men and women and, 

in some cases, adults, as was presented by one of the questions 

that was asked by one of the members on the Democratic side. 

And that is that there has to be Ways and Means Committee involvement helping us reach that affordability answer to the puzzle, 

and that there will have to be ways in which we can possibly give 

subsidized housing to those who qualify for the Pell grants or are 

listed in the low-income and moderate-income so that they can live 

on campus in subsidized housing, rental housing, apartments or 

dormitories, so that we can shorten the number of years for graduation, instead of 6 to 10, as I asked earlier, and reduce it to 4 to 

5, and thus have less debt than the way that we are doing it now. 

So having said that, I want to thank each of the presenters, the 

witnesses, and say that it was very helpful. And we will make all 

of your remarks and questions and answers part of the record. 

As previously ordered, members will have 14 days to submit additional materials for the hearing record. Any member who wishes 

to submit follow-up questions in writing to the witnesses should coordinate with majority staff within the requisite time. 

Without objection, this hearing is adjourned. 

[The prepared statement of Mr. Altmire folows:]

Prepared Statement of Hon. Jason Altmire, a Representative in Congress 

From the State of Pennsylvania 

Thank you, Mr. Chairman, for holding this important hearing on the financial 

barriers that students and their families confront trying to pay for a college education. 

In the current global economy earning a bachelors degree is becoming a prerequisite for being able to find stable and rewarding employment. However, just as 

earning a bachelors degree has become more important than ever, going to college 

has become more expensive than ever. 

The rising cost of attending college is forcing millions of students to graduate with 

massive amounts of debt and many more are deciding to forego college altogether. 

The average student graduating from college this year will have accumulated 

$19,000 in debt by graduation day. I find this to be unacceptable. 

The 110th Congress has already taken several important steps to make college 

more affordable. This includes raising the maximum Pell Grant award for the first 

time in four years and passing the College Student Relief Act (H.R. 5) to reduce the 

interest rate on subsidized student loans from 6.8% to 3.4% over the next five years. 

These were critical first steps and I look forward to hearing more about the next 

steps Congress can take to increase college affordability for all students and their 

families. 

58

Thank you again, Mr. Chairman, for holding this important hearing. I yield back 

the balance of my time. 

[Whereupon, at 3:15 p.m., the subcommittee was adjourned.]

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