```

[Senate Hearing 114-565]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-565

 RECALIBRATING REGULATION OF COLLEGES AND UNIVERSITIES: A REPORT FROM 
      THE TASK FORCE ON GOVERNMENT REGULATION OF HIGHER EDUCATION

=======================================================================

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                                   ON

   EXAMINING RECALIBRATING REGULATION OF COLLEGES AND UNIVERSITIES, 
 FOCUSING ON A REPORT FROM THE TASK FORCE ON GOVERNMENT REGULATION OF 
                            HIGHER EDUCATION

                               __________

                           FEBRUARY 24, 2015

                               __________

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

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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

                       U.S. GOVERNMENT PUBLISHING OFFICE 

93-616 PDF                     WASHINGTON : 2017 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Publishing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                  LAMAR ALEXANDER, Tennessee, Chairman

MICHAEL B. ENZI, Wyoming            PATTY MURRAY, Washington
RICHARD BURR, North Carolina        BARBARA A. MIKULSKI, Maryland
JOHNNY ISAKSON, Georgia             BERNARD SANDERS (I), Vermont
RAND PAUL, Kentucky                 ROBERT P. CASEY, JR., Pennsylvania
SUSAN COLLINS, Maine                AL FRANKEN, Minnesota
LISA MURKOWSKI, Alaska              MICHAEL F. BENNET, Colorado
MARK KIRK, Illinois                 SHELDON WHITEHOUSE, Rhode Island
TIM SCOTT, South Carolina           TAMMY BALDWIN, Wisconsin
ORRIN G. HATCH, Utah                CHRISTOPHER S. MURPHY, Connecticut
PAT ROBERTS, Kansas                 ELIZABETH WARREN, Massachusetts
BILL CASSIDY, M.D., Louisiana

               David P. Cleary, Republican Staff Director
                  Evan Schatz, Minority Staff Director
              John Righter, Minority Deputy Staff Director

                                  (ii)

  

                            C O N T E N T S

                               __________

                               STATEMENTS

                       TUESDAY, FEBRUARY 24, 2015

                                                                   Page

                           Committee Members

Alexander, Hon. Lamar, Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Murray, Hon. Patty, a U.S. Senator from the State of Washington, 
  opening statement..............................................     4
Mikulski, Hon. Barbara A., a U.S. Senator from the State of 
  Maryland.......................................................     6
Burr, Hon. Richard, a U.S. Senator from the State of North 
  Carolina.......................................................    24
Bennet, Hon. Michael F., a U.S. Senator from the State of 
  Colorado.......................................................    26
Warren, Hon. Elizabeth, a U.S. Senator from the State of 
  Massachusetts..................................................    28

                               Witnesses

Kirwan, William E. ``Brit'', Chancellor, University System of 
  Maryland, Adelphi, MD..........................................     8
    Prepared statement...........................................    11
Zeppos, Nicholas S., Chancellor, Vanderbilt University, 
  Nashville, TN..................................................    13
    Prepared statement...........................................    16

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    National Task Force on Violence Against Women................    36
    Response by William E. Kirwan to questions of Senators:
        Senator Enzi.............................................    37
        Senator Franken..........................................    37
    Response to Questions of Senator Enzi by Nichloas S. Zeppos..    38

                                 (iii)

  

 
 RECALIBRATING REGULATION OF COLLEGES AND UNIVERSITIES: A REPORT FROM 
      THE TASK FORCE ON GOVERNMENT REGULATION OF HIGHER EDUCATION

                              ----------                              

                       TUESDAY, FEBRUARY 24, 2015

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:02 a.m., in 
room 430, Dirksen Senate Office Building, Hon. Lamar Alexander, 
chairman of the committee, presiding.
    Present: Senators Alexander, Burr, Murray, Mikulski, 
Bennet, and Warren.

                 Opening Statement of Senator Alexander

    The Chairman. The Senate Committee on Health, Education, 
Labor, and Pensions will please come to order.
    This morning we're having our first hearing in this 
Congress of the reauthorization of the Higher Education Act 
which will focus on the final report of the Task Force on 
Government Regulation of Higher Education.
    Senator Murray and I will each have an opening statement, 
then we'll introduce our panel of witnesses. Senator Mikulski 
will introduce one of the witnesses and at that time make 
whatever comments she would like to make because she has to 
leave at about 10:30 for another hearing. After our witness 
testimony, Senators will have 5 minutes of questions.
    Sometimes it's best to approach a subject with examples, so 
let me use three. More than a year ago, Vanderbilt University 
had the Boston Consulting Group determine how much it cost the 
University to comply with Federal rules and regulations on 
higher education. The answer: $150 million, or 11 percent of 
the University's total non-hospital expenditures last year. Let 
me repeat that. In 1 year, $150 million, or 11 percent of the 
University's total non-
hospital expenditures.
    Vanderbilt Chancellor Nick Zeppos, who will testify today, 
says that this adds about $11,000 in additional tuition per 
year for each of the University's 12,757 students. I met a 
parent this morning, Chancellor Zeppos, who said he's sending 
his $11,000 already.
    The second example. Each year, 20 million American families 
fill out a complicated, 108-question form called the FAFSA, 
Free Application for Federal Student Aid, to obtain a grant or 
loan to help pay for college. Experts who testified before this 
committee last year, a hearing Senator Harkin presided over, 
said that answering just two questions would tell the 
Department of Education 95 percent of what it needs to know to 
determine a student's eligibility for a grant or a loan: one, 
what is your family size; and two, what is your family income.
    In January, a bipartisan group of six Senators introduced 
legislation to simplify the student aid application and 
process, including reducing the 108-question FAFSA form to just 
two questions. If our legislation becomes law, then families, 
guidance counselors and admissions officers would save millions 
of hours. Most importantly, according to financial aid expert 
Mark Kantrowitz, the complicated 108-question form discourages 
up to 2 million Americans each year from applying for aid. Last 
fall, the president of Southwest Tennessee Community College in 
Memphis told me that the complex form turns away from his 
campus 1,500 students a semester.
    Tennessee has become the first State to make community 
college tuition free for qualifying students, but first each 
student must fill out the FAFSA. Now that tuition is free, the 
principal obstacle for qualified Tennessee students to obtain 2 
years of education after high school is not money. It's this 
unnecessarily complicated Federal form.
    And finally, 10 years ago--the third example--then 3 years 
ago, surveys by the National Academy of Sciences found that 
principal investigators spend 42 percent of their time 
associated with Federal research projects on administrative 
tasks instead of research. I then asked the head of the 
National Academy what a reasonable percent of time would be for 
a researcher to spend on administrative tasks. He replied 
perhaps 10 percent, or even less.
    How many billions could we save if we reduced that 
administrative burden? Taxpayers spend more than $30 billion a 
year on research and development at colleges and universities. 
This year the average annual cost of a National Institutes of 
Health research project is $480,000. If we reduce spending on 
unnecessary red tape by just $1 billion, the NIH could 
potentially fund more than a thousand new multi-year grants.
    These examples should not be excused as normal, run-of-the-
mill problems of government. These examples and others like 
them represent sloppy, inefficient governing that wastes money, 
hurts students, discourages productivity, and impedes research. 
Such waste should be an embarrassment to all of us in the 
Federal Government, and let me make it clear, let's just not 
blame President Obama or Secretary Duncan. They have 
contributed to the problem, but so has every president and 
every education secretary, and that includes me, since 1965 
when the first Higher Education Act was enacted; and the list 
of those embarrassed should also include the Congress of the 
United States for year after year adding to and tolerating a 
pile of conflicting, confusing regulations.
    The Higher Education Act totals nearly 1,000 pages. There 
are over 1,000 pages in the official Code of Federal 
Regulations devoted to higher education and, on average, every 
work day the Department of Education issues one new sub-
regulatory guidance, directive or clarification. No one is 
taking time to weed the garden.
    The result of this piling up of regulations is that one of 
the greatest obstacles to innovation and cost-consciousness in 
higher education has become us, the Federal Government. Since 
all of us created the mess, then it's up to all of us to fix 
it. That's why more than a year ago four members of this 
committee, two Democrats, two Republicans, asked a group of 
distinguished educators to examine the current state of Federal 
rules and regulations on colleges and universities. We asked 
them not just to tell us the problem but to give us specific 
solutions.
    They have done so in a remarkable document entitled 
``Recalibrating Regulation of Colleges and Universities'' in 
which they outline 59 specific regulations, requirements and 
areas for Congress and the Department of Education to consider, 
listing 10 especially problematic regulations. I thank 
Vanderbilt Chancellor Nick Zeppos and Maryland Chancellor Brit 
Kirwan for leading the effort.
    It's a remarkably good report. You did exactly what we 
asked. Instead of sermons, it was very specific. It was written 
in plain English. Perhaps we should get whomever wrote your 
report to write the regulations of the Federal Government. It 
reminds me of the ``Rising Above the Gathering Storm'' report 
of 10 years ago that gave us 10, really 20 things we should do 
to increase American competitiveness, and because they were 
specific--and both Senator Murray and Senator Mikulski were 
involved in this--they eventually got adopted.
    This is a blueprint for the future. The report makes clear 
that colleges and taxpayers expect appropriate regulation, but 
neither taxpayers nor colleges are well served by the jungle 
that exists today. Consumer information that is too complicated 
to understand is worthless. Colleges must report, for example, 
the amount of foreign gifts they receive, disclose the number 
of fire drills that occurred. Gainful employment disclosures 
require 30 different pieces of information for each academic 
program subject to the regulation. When a student withdraws 
from college before a certain time, a student's Federal money 
must be returned by the government. That's a simple concept. 
Yet the regulation governing this is 200 paragraphs of 
regulatory text accompanied by 200 pages in the Federal Student 
Aid Handbook.
    The University of Colorado reports they have two full-time 
staff devoted to this issue, one to do the calculation, the 
other to re-check the other one's work. Institutions offering 
distance education are subject to an additional set of 
bureaucracy that can result in additional cost of a half-
million to a million dollars for compliance.
    All of these are examples of colleges and universities 
spending time and money on compliance with Federal rules and 
not on students. Senator Murray and I will discuss how to 
develop a bipartisan process to take full advantage of the 
recommendations in this report and to include many of them in 
the reauthorization of the Higher Education Act, which we plan 
to do this year. We'll schedule additional hearings to gather 
comment on the report from institutions who are not directly 
involved with the report, and we'll hear from consumers of 
higher education, including parents, students, and taxpayers.
    Some of the recommendations require change in the law. Many 
can be fixed by the Department itself. I've talked with 
Secretary Duncan several times about this, most recently on 
Friday. He's eager to do his part. I look forward to working 
with him and President Obama on eliminating unnecessary red 
tape, saving students money, and removing unnecessary 
regulatory obstacles to innovation in the best system of higher 
education in the world.
    This is not a new subject for me. One of the first things I 
did as a U.S. Senator in 2003 was to try to simplify student 
aid, and I'm told the net result of my efforts was the 
reduction of approximately seven questions on the Federal 
Student Aid form. Those have been replaced by many more now.
    I authored a provision in the bill of the Higher Education 
Act of 2008 that required the Secretary of Education to publish 
a compliance calendar so schools could see all of their 
deadlines month-by- month, day-by-day. Unfortunately, 7 years 
later, the Department of Education has been unable to produce 
such a calendar. With bipartisan support and this 
groundbreaking report, the one we have today, I'm counting on 
this effort to get a lot farther than the one 10 years ago.
    Now we'll go to Senator Murray for her comments, and then 
to Senator Mikulski to introduce a witness and to make 
comments.
    Senator Murray.

                  Opening Statement of Senator Murray

    Senator Murray. Well, thank you very much, Mr. Chairman. 
This is, of course, our first hearing on higher education, and 
I'm really glad that we're beginning our conversations on this 
topic.
    Higher education and job training is really critical to 
making sure we have the economic strength of our middle class, 
and I personally know this is true because I saw it with my own 
family growing up. My dad was diagnosed with multiple sclerosis 
when I was a teenager. It wasn't long before he couldn't work, 
and without warning my own family had fallen on hard times. But 
because of strong Federal investments, my brothers and sisters 
and I got a good public education and we were able to afford to 
go to college with the help of Pell Grants and other Federal 
aid programs.
    Higher education and training was critical for my family to 
succeed and ensure we had a foothold into the middle class. I 
continue to believe it is a crucial part of building an economy 
that works for all families, not just the wealthiest few.
    In my new role here on this committee as Ranking Member, 
I'm going to continue to focus on making sure that students 
have access to a college education and safe learning 
environments. I'll be looking for ways to make college more 
affordable. I'll be working to reduce the crushing burden of 
student debt that limits so many families across the country 
today.
    Today, we are going to be talking about the recent report 
from the Task Force on Federal Regulation of Higher Education. 
I, too, want to really thank Senators Alexander and Burr, 
Mikulski and Bennet for spearheading the creation of this Task 
Force. I'm also glad the two co-chairs of the Task Force could 
join us today to discuss their findings and recommendations.
    I'm also looking forward to our next hearing that will 
bring in the voices of students and more diverse types of 
institutions that provide postsecondary opportunities.
    At colleges and universities, we need to make sure that 
students and families have accurate consumer information, that 
students have a safe learning environment, and that the $150 
billion in Federal taxpayer dollars we invest in these 
institutions each year are well spent.
    Of course, it is important to make sure colleges and 
universities can work efficiently and effectively, and I am 
open to ways to improve our rulemaking process. At the same 
time, it would be a mistake to roll back important protections 
for faculty, students, and families.
    We should also be improving our current protections. Right 
now, families and students aren't able to access basic, but 
essential, consumer information on their college or university, 
like useful graduation and transfer rates, average student 
debt, or expected earnings.
    When students are deciding where to attend, they should 
have the tools to find out if their college or university will 
give them a good return on their investment and hard work. They 
have a right to know before they go. I was glad to see the 
report shine a light on the need to improve the Federal data 
systems that we have.
    Today, more and more students and families are dealing with 
the crushing burden of student debt. Colleges and universities 
should be accountable for high-quality outcomes that don't 
leave students with debt they struggle to repay.
    The report highlights the need to focus our rules of the 
road on risky institutions, and I welcome our witnesses' 
suggestions in this area.
    And finally, as I mentioned, I'm very focused on making 
sure students have a safe learning environment, especially when 
it comes to preventing violence and sexual assault on campus. 
Both the Clery Act and title 9 work to build safer campuses and 
protect students. Last year, important strides were made 
through the Violence Against Women Act that will help prevent 
crimes like stalking and domestic violence and dating violence 
on campus. We shouldn't move in the wrong direction by 
unraveling these core protections that provide our students 
with a safe learning environment. In fact, we need to build on 
our work because all students have the right to further their 
education without the fear of sexual assault.
    Here on this committee, I'm looking forward to working with 
Chairman Alexander and our committee members over the next 
several months to reauthorize the Higher Education Act in a 
bipartisan way so we can make sure that hard-working Americans, 
regardless of where they live or where they went to school, or 
where and if their parents went to college, or how much money 
they make, can continue to have access to the opportunities 
that my family did.
    I look forward to hearing from our witnesses today. Again, 
I thank all of you for your tremendous work on this important 
issue.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Murray.
    During the last Congress, we had a number of very good 
hearings on higher education, and this is our first one in this 
Congress, as Senator Murray said and as I said. It will 
probably be April before we can get to another one, and between 
now and then Senator Murray and I will talk about how to 
develop the bipartisan process that we both hope to create.
    I will introduce Chancellor Zeppos and then turn to Senator 
Mikulski to introduce her witness and to make whatever comments 
she would like to make at that time since she may have to leave 
a little early.
    Nick Zeppos was born in Milwaukee, WI. He's Chancellor of 
Vanderbilt University in Nashville, TN. He's held that position 
since 2008. He was well prepared for it, having been at 
Vanderbilt for 28 years prior to that, starting as an assistant 
professor in the law school. He later was provost, and now he 
is the chancellor.
    I want to express my appreciation to Chancellor Zeppos, as 
well as Chancellor Kirwan, for giving so much of their valuable 
time to leading this report.
    Senator Mikulski.

                     Statement of Senator Mikulski

    Senator Mikulski. Thank you very much, Mr. Chairman, for 
your leadership on this, and also the leadership of Senator 
Murray.
    This morning, the Judiciary Committee is also holding a 
hearing on human trafficking, and all the women of the Senate 
on a bipartisan basis have joined together to work with our 
colleagues on really very important legislative steps. I'll be 
joining Senator Collins to testify and might have to leave 
here.
    This is going to be a great hearing and a wonderful report. 
When you, Senator Alexander, and I were working on the 
reauthorization of Higher Education in 2009, we looked at the 
issue of two things: how can we make sure young people got a 
very good education when they went to college, to make college 
more available and make it more affordable; we have focused 
also on student aid, reforming student aid, improving student 
aid for the students.
    What we also looked at was how can colleges and 
universities, public and private, control their costs. What 
emerged in our discussion, and I know in subsequent meetings I 
had in my own State, the issue of regulation and the regulatory 
aspects of some regulations that are either outdated or get in 
the way of each other increased the cost but did not improve 
either outcome in terms of graduation rates, didn't necessarily 
improve outcome in terms of quality or innovation, or make sure 
that our schools were opportunity-driven like title 9, and also 
the safety concerns that many of us have.
    This is where this task force came from, how could we take 
a look at the regulations and identify the 10 most serious ones 
that impact the administration of these. These recommendations, 
just reading them very briefly, really offer a road map on how 
we can improve quality, improve innovation, what you get when 
you come to the classroom, make sure that the whole student aid 
process really works on behalf of the student and that it does 
lead to jobs, but not necessarily more jobs at the Department 
of Education to write more regulations requiring job training 
so that you can get a better job and come to work at the 
Department of Education so you too can write more regs.
    This is no laughing matter. We look forward to hearing this 
testimony, and I would like to thank both Drs. Kirwan and 
Zeppos, all the members of the task force, for their hard work 
on this. They have done this on their own time. They have put 
considerable effort, thought, and expertise into this, and I 
mean to value it.
    I'd like to bring to the committee's attention my 
Chancellor from the University of Maryland, Dr. Kirwan. Dr. 
Kirwan has been a member of the University of Maryland faculty 
and administration for 24 years. He's been a distinguished 
chancellor for 13 years. Before that, Ohio State also was able 
to claim him.
    When you look at all of the wonderful work that the 
University of Maryland does in educating students here and 
around the world, because we have something called University 
College which has served our military since the end of World 
War II and is now the largest online university run by a land-
grant college, it is stunning what has been done.
    I would say this to the committee: We would not have Google 
in the United States of America without Dr. Kirwan. Now, 
Barbara, where does this come from?
    [Laughter.]
    Dr. Kirwan, in addition to being such an able chancellor, 
really is a gifted mathematician. In his work as a 
mathematician, he went to global conferences or international 
conferences. There, there was a man named Dr. Brin. Though he 
could not leave the Soviet Union, he was allowed to attend 
international mathematical conferences. During the Jimmy Carter 
era and while we were working on legislation called Jackson-
Vanik and the window opened and some people could get out, Dr. 
Brin knew Dr. Kirwan and said do you think you can help me?
    Dr. Kirwan responded. The Board of Regents responded. Not 
only could Dr. Brin get out of Russia, but he could come to the 
University of Maryland.
    He had a little boy named Sergey. Sergey was really 
brilliant, a little difficult. He had a unique ability to get 
out of college by the time he was 17. Then finally, he went 
through our public schools, goes to the University of Maryland, 
graduates, goes off to Stanford to work in one of those garages 
we all hear about.
    Well, the rest is history. Sergey Brin, of course, is 
Google. Had it not been for Chancellor Kirwan meeting Dr. Brin, 
us doing Jackson-Vanik, the University of Maryland providing a 
home for Dr. Brin, we would not have Google. That's a fabulous 
story which shows what good immigration policy can do----
    [Laughter.]
    Senator Mikulski [continuing]. Also, what a gifted, 
talented, dedicated humanitarian can do. That's Dr. Kirwan.
    The Chairman. Well, that was--thank you, Senator Mikulski.
    [Laughter.]
    I'll have to give Chancellor Zeppos an even better 
introduction a little later.
    [Laughter.]
    We have several Senators who are here who also joined in 
commissioning the report--Senator Burr and Senator Bennet. If 
you're going to be able to stay, you'll have a chance. Would 
you like to make comments just before we start?
    Senator Bennet. No. I'd like to hear the witnesses. I want 
to thank you, Mr. Chairman, and Senators Murray and Mikulski, 
for your leadership, putting the commission together. For once, 
we have a committee that actually works in order. We put the 
commission together, we're having hearings, and then hopefully 
we're going to pass a bipartisan bill. Thank you very much for 
that work.
    The Chairman. Senator Burr, do you want to make any 
comments?
    Senator Burr. Mr. Chairman, only that I felt that Senator 
Mikulski was going to highlight the entrepreneurial spirit of 
Google being created with Dr. Kirwan. I welcome our witnesses. 
I thank the Chair.
    The Chairman. Thank you.
    Usually we ask our witnesses to summarize their remarks in 
5 minutes, but since there are just two of you, and since you 
led the report and we're anxious to hear from you, why don't 
you take up to 10, if you would, please, and then that will 
give us a chance to ask questions.
    Let's start with Dr. Kirwan.

STATEMENT OF WILLIAM E. ``BRIT'' KIRWAN, CHANCELLOR, UNIVERSITY 
                SYSTEM OF MARYLAND, ADELPHI, MD

    Mr. Kirwan. Thank you very much, Chairman Alexander. And 
thank you, Senator Mikulski, for that very nice introduction.
    Unfortunately, I didn't get any stock in the Google 
Corporation as part of that recruitment effort.
    In any case, we want to thank Chairman Alexander and 
Ranking Member Patty Murray for the opportunity to come and 
make some comments on the report today, and thank the four of 
you for your vision and leadership in creating this task force.
    As Chairman Alexander noted, the task force was charged 
with studying and recommending ways to reduce Federal 
regulatory burden on higher education, but--and this is a very 
critical point which Senator Murray just emphasized--to do so 
in a way that ensures students, families, and taxpayers all 
have relevant protections, and ensures Congress that funds are 
being spent for their intended purpose.
    In sum, we were asked to determine smarter regulations and 
a streamlined process while maintaining a high level of 
transparency and accountability.
    In just a moment my co-chair, Nick Zeppos, will, of course, 
make some comments, but we agreed that I would lead off.
    The task force consisted of 16 presidents and chancellors 
representing all sectors of higher education. In addition, as 
part of our work, we visited and interviewed campus officials 
at 60 different institutions. I also want to acknowledge at the 
outset the excellent staff support that we received from the 
American Council for Education. Molly Broad is here, who is 
president of that task force; and Terry Hartle, who was a key 
member of the staff that worked with us on this report.
    Through the task force's efforts, we've learned that many 
regulations are well-conceived, address critically important 
issues for parents, students, and the general public, and 
provide appropriate means of timely and transparent 
accountability.
    On the other hand, we also discovered that too many 
regulations are overly complex, confusing to both students and 
institutions, and result in costly compliance efforts that are 
really not helpful to the public or to Congress.
    What has happened over the years, in effect, is that 
measures, regulations, and interpretations have been layered on 
existing measures and rules, creating a maze of sometimes 
confusing if not conflicting reporting requirements.
    One way to illustrate this fact is that the Higher 
Education Act is now 1,000 pages long. The regulations 
supporting this act are another 1,000 pages, and on average the 
U.S. Department of Education sends one ``dear colleague'' or 
other guidance document to higher education institutions, on 
average, every working day throughout the year.
    The substance of our report is really contained in sections 
2, 3, and 4. Section 2 addresses the challenges that higher 
education faces in the current regulatory environment. Section 
3 is the list of 10 most problematic regulations, with 
recommendations for how they could be improved. The final 
section is recommendations for improvement to the overall 
process, although it doesn't do much if we correct 10 
regulations but leave a process that could regenerate more 
problematic regulations in the future. That's what the final 
section is about.
    I offer just brief comments on Section 3. That's the list 
of 10 most problematic regulations, and mention two or three of 
them, and then Nick Zeppos will comment on the other two 
sections.
    The first regulation I want to speak to is the FAFSA, the 
form that Chairman Alexander held up just a few moments ago 
that parents and students must fill out. There's been, of 
course, considerable discussion about simplifying this form, 
which, if possible, would be a great benefit to students and 
their families, not to mention our higher education 
institutions. There is a particular requirement with the FAFSA 
that causes families and institutions enormous problems. Let me 
explain.
    A student currently seeking aid, let's say for next fall, 
must provide tax data for calendar year 2014. They're going to 
school in the fall of 2015; they have to supply the tax data 
for calendar year 2014. This creates a significant timing 
problem because the IRS due date for receiving tax information 
is not until April 15, a date after the financial aid deadline 
has passed.
    This leads to enormous frustration on the part of students 
and their parents, and to errors by institutions in rushing to 
verify tax data. The task force offers what we think is a 
simple fix to this problem: allow the student in this example 
to submit 2013 tax information. In other words, not the prior 
year tax information but the prior-prior year tax information.
    The second of the 10 most problematic regulations I'll 
mention is one that stifles innovation in higher education 
delivery, and this is particularly relevant for my institutions 
in the University of Maryland System because, as Senator 
Mikulski noted, it includes University of Maryland University 
College, which is the largest not-for-profit online education 
institution in the United States.
    Now historically, the State requirements for State 
authorization of distance education were limited to the State 
where the institution was physically located. In our case, the 
University of Maryland University College needed State 
authorization in Maryland.
    However, a few years ago the Department of Education 
fundamentally altered the authorization rules. It now requires 
that institutions get authorization in every State where a 
student lives, even if it's only one student in that State. You 
can imagine the cost and time required for an institution to 
send lawyers and other staff to each State where one of its 
online programs enrolls students and go through the timely 
process of getting authorized in that State.
    The task force recommends that Congress re-codify the long-
term practice of requiring authorization by the State where the 
institution exists, not where students reside.
    One final recommendation in our top 10 list that I'll just 
briefly cite, and this is the issue, again one that Chairman 
Alexander mentioned, and this is the return of title 4 funds, 
and there is a very sound regulation requirement that says if a 
student who is getting title 4 funds leaves the institution 
before the semester is over in which they got the support, they 
are only entitled to funds for the portion of the semester in 
which they were enrolled, a very sensible requirement and 
regulation.
    The difficulty arises if a student leaves the institution 
and there is no record of that student leaving the institution. 
If the student on departure from the institution actually goes 
through the process of de-enrolling, withdrawing, then there is 
a clear record of when the student left and a precise formula 
about what proportion of the funds that student is entitled to. 
For many students who leave an institution, they don't formally 
withdraw. As a result, it becomes very difficult to determine 
how the funds should be recaptured.
    It's a complicated issue and, as Senator Alexander 
mentioned, there are hundreds of paragraphs describing the 
process to make this determination, and we think that we need 
to take out a clean sheet of paper and go back and revisit this 
regulation, and we have some suggestions and thoughts about how 
that might occur.
    Before turning to my colleague, Chancellor Zeppos, let me 
return to a very important point. Higher education recognizes, 
with deep appreciation, the enormous investment the Federal 
Government makes in higher education through Federal financial 
aid programs and to our universities' research enterprise. I 
want to offer special words of appreciation to Senator Mikulski 
and all of you who have worked so hard to ensure ample research 
and financial aid funding during these fiscally challenging 
times.
    Federal funds are public funds, and the task force strongly 
and unanimously supports a rigorous, efficient, and transparent 
system of accountability to ensure Congress, parents, students, 
and the general public that these funds are being spent 
appropriately and to accomplish their intended purpose. Our 
Nation deserves nothing less.
    The task force has endeavored, in effect, to separate the 
wheat from the chaff through recommendations and processes that 
can both strengthen and streamline higher education's 
accountability obligation. Thank you very much for letting me 
make these comments.
    Before I turn to Nick, I just want to recognize Michael 
Locke from Rasmussen College who is here, and he is a member of 
our task force, and we appreciate your being here, Michael.
    Mr. Chairman, this completes my initial comments.
    [The prepared statement of Dr. Kirwan follows:]
            Prepared Statement of William E. ``Brit'' Kirwan
                                summary
    Chairman Alexander, Senator Murray and committee members, this Task 
Force was charged to recommend ways to streamline and refocus the 
Federal regulations impacting higher education. We were asked to 
identify smarter regulations and improved processes. The task force was 
comprised of leaders from all sectors of higher education, and 
conducted visits and interviews with campus officials from more than 60 
different institutions.
    We in higher education fully understand--and support--the important 
role that Federal regulations play. Students, colleges, and 
universities across this country benefit from the strong Federal 
investment in higher education, including significant funding for 
student aid programs such as Federal loans, Pell Grants for low-income 
students, the Federal Work-Study program, TRIO programs, funding 
targeted to historically black colleges, not to mention Federal funding 
and grants for university-based research and development.
    Many regulations are well-intentioned to address critically 
important issues. Many regulations are poorly framed, confusing, overly 
complex, ill-conceived, or poorly executed. Some are even wholly 
unrelated to the mission of higher education. Requirements have been 
layered upon requirements resulting in a tangle of regulations that too 
often has a harmful effect on higher education's ability to serve 
students. And, the costs associated with compliance are one of the 
factors driving rising tuitions and harming affordability. For the past 
several years, our Nation has been engaged in a conversation on college 
affordability. All universities and colleges--public and private--need 
to tighten their belts, reduce costs wherever possible, and emphasize 
efficiency in their operations.
    This report contains broad process reforms ideas as well as 
recommendations to address 10 specific regulatory areas that have 
proved particularly challenging. The much-maligned Free Application for 
Federal Student Aid, or FAFSA. Many students and parents have 
repeatedly pointed out, their complete tax information isn't available 
until after the financial aid application deadline has passed. We 
recommend that FAFSA be revised to allow applicants to submit tax 
information from 2 years prior rather than the previous year.
    The impact of inappropriate regulations often stifle innovations in 
distance education. The Department altered that landscape by requiring 
institutions to meet the State authorization laws of every State in 
which a student--even just a single student--was physically located. As 
the ability of online education to cast aside geographical boundaries 
increases, it is counterproductive to erect walls of regulation. 
Congress should clarify a return to the long-standing interpretation of 
State authorization so that the resources that now go to attorneys, 
compliance officers, and tuition surety bonds to get authorization in 
State after State can be redirected to target access, affordability, 
and educational innovations.
    The next is the inordinate amount of information and data that 
colleges and universities are required to collect and disseminate. Some 
of this information is, of course, very useful for students and 
families to consider; but some of it is not. For example, higher ed 
institutions must report on the number of supervised fire drills they 
hold in a given year. They have to produce more than 30 ``gainful 
employment disclosures'' for each covered program offered. They are 
required to counsel departing student borrowers on every one of the 
seven different Federal loan repayment programs applicable even though 
the vast majority use either the standard 10-year or the extended 30-
year program. We recommend that Congress and the Department of 
Education work together to winnow this list down to require only the 
information most useful to students.
    Many requirements are placed upon higher education that have 
nothing to do with our mission. These include enforcing Selective 
Service registration, combating peer-to-peer file sharing, distributing 
voter registration forms in a federally specified timeframe and format, 
and other actions that divert time and resources.
    The pending reauthorization of the Higher Education Act (HEA) 
provides a propitious opportunity to not only identify the most costly, 
burdensome, and confusing Federal regulations, but also develop clear 
recommendations on how Congress and the Department of Education can 
streamline and simplify regulatory policies and practices while 
maintaining--even strengthening--accountability. I want to thank the 
committee for this opportunity to testify and for the significant time 
and attention you have given to this important matter.
                                 ______
                                 
    Good morning. I am Brit Kirwan, Chancellor of the University System 
of Maryland (USM). I want to thank Chairman Lamar Alexander and Ranking 
Member Patty Murray for the opportunity to speak to this committee 
about the need to streamline and refocus the Federal regulations 
impacting higher education in America today.
    As you know, just over a year ago a bipartisan group of U.S. 
Senators--including Chairman Alexander and HELP Committee members 
Senator Michael Bennet, Senator Richard Burr, and Senator Barbara 
Mikulski--charged a task force with studying and recommending ways to 
reduce the Federal regulatory burden, while still maintaining important 
protections for students, families, and taxpayers. In short, we were 
asked to identify smarter regulations and improved processes. The task 
force was comprised of presidents and chancellors from across all 
sectors of higher education, and conducted visits and interviews with 
campus officials from more than 60 different institutions.
    I am joined today by my task force co-chair, Vanderbilt University 
Chancellor Nicholas Zeppos. I would also like to acknowledge the 
excellent support that the American Council on Education (ACE) provided 
to our efforts.
    My co-chair has asked me to lead off our joint testimony.
    By way of background, the University System of Maryland comprises 
12 institutions, including research I institutions, comprehensives, 
historically black institutions, one totally on-line university, and a 
specialized research institute. We are, in many ways, a microcosm of 
public higher education and--as such--have first-hand experience with 
the ramifications of the extensive variety and volume of Federal 
regulations.
    Let me begin my testimony by making a very important point: We in 
higher education fully understand--and support--the important role that 
Federal regulations play. Students, colleges, and universities across 
this country benefit from the strong Federal investment in higher 
education, including significant funding for student aid programs such 
as Federal loans, Pell Grants for low-income students, the Federal 
Work-Study program, TRIO programs, funding targeted to historically 
black colleges, not to mention Federal funding and grants for 
university-based research and development. I can't let this point pass 
without thanking my senior Senator from Maryland, Senator Mikulski, for 
her exceptional efforts with regard to these funding issues. We in 
higher education recognize with gratitude the extraordinary fiscal 
commitment the Federal Government makes to our enterprise. Therefore, 
we recognize and embrace our obligation to be transparent, responsible, 
and accountable stewards of taxpayer money.
    Through the task force's work, we have learned that many 
regulations are well developed, address critically important issues, 
and provide appropriate means of institutional accountability. On the 
other hand, we have also discovered that too many regulations are 
poorly framed, confusing, overly complex, ill-conceived, or poorly 
executed. Some are even wholly unrelated to the mission of higher 
education. In addition, over time, requirements have been layered upon 
requirements resulting in a tangle of regulations that too often has a 
harmful effect on higher education's ability to serve students. Some 
regulations even restrict rather than contribute to student access to 
higher education, limit our ability to focus resources on student 
success, impede organizational efficiencies, and constrain innovation. 
And, quite frankly, the costs associated with compliance are one of the 
factors driving rising tuitions and harming affordability efforts.
    This last point is very important. For the past several years, our 
Nation has been engaged in a conversation on college affordability. 
Clearly, all universities and colleges--public and private--need to 
tighten their belts, reduce costs wherever possible, and emphasize 
efficiency in their operations. And this is precisely what has been 
happening at institutions across the country.
    But, when it comes to costs associated with Federal regulations, we 
are largely powerless. The increasing volume and velocity of Federal 
regulation are captured by one simple metric: The U.S. Department of 
Education issues more than one document per workday providing official 
guidance to amend or clarify existing rules.
    This is why this task force is so important and why I, once again, 
want to thank the Senators for creating it and supporting it. The 
pending reauthorization of the Higher Education Act (HEA) provides a 
propitious opportunity to not only identify the most costly, 
burdensome, and confusing Federal regulations, but also develop clear 
recommendations on how Congress and the Department of Education can 
streamline and simplify regulatory policies and practices while 
maintaining--even strengthening--accountability.
    The task force report contains broad process reforms ideas as well 
as recommendations to address 10 specific regulations that have proved 
particularly challenging. I will outline some of those specific 
recommendations and Nick will followup with others.
    The first I want to speak to is the much-maligned Free Application 
for Federal Student Aid, or FAFSA. Under existing FAFSA regulations, 
students are required to enter tax data from the previous year. But as 
many students and parents have repeatedly pointed out, their complete 
tax information isn't available until after the financial aid 
application deadline has passed. To address this problem, we recommend 
that FAFSA be revised to allow applicants to submit tax information 
from 2 years prior rather than the previous year. Moving to a so-called 
``prior-prior year'' system would drastically simplify the current 
Federal rules regarding verification of information, which happens to 
be one of the common compliance mistakes made by institutions. Prior-
prior year would also help students and families, who can be frustrated 
and confused by the additional requests for information that come with 
the verification process.
    The second recommendation I will highlight looks at the impact of 
inappropriate regulations that stifle innovations in distance 
education. Historically, Federal requirements for State authorization 
of distance education programs were limited to the State where the 
institution was physically located. However, a few years ago, the 
Department of Education fundamentally altered that landscape by 
requiring institutions to meet the State authorization laws of every 
State in which a student--even just a single student--was physically 
located. As the ability of online education to cast aside geographical 
boundaries increases, it is counterproductive to erect walls of 
regulation. Congress should clarify a return to the long-standing 
interpretation of State authorization so that the resources that now go 
to attorneys, compliance officers, and tuition surety bonds to get 
authorization in State after State can be redirected to target access, 
affordability, and educational innovations. Institutions can and should 
be responsible for complying with State laws, certainly. But there is 
no need for the Federal Government to be involved with these matters.
    The next item I want to highlight is the inordinate amount of 
information and data that colleges and universities are required to 
collect and disseminate. Some of this information is, of course, very 
useful for students and families to consider; but some of it is not. 
For example, higher ed institutions must report on the number of 
supervised fire drills they hold in a given year. They have to produce 
more than 30 ``gainful employment disclosures'' for each covered 
program offered. They are required to counsel departing student 
borrowers on every one of the seven different Federal loan repayment 
programs applicable even though the vast majority use either the 
standard 10-year or the extended 30-year program. Providing all this 
data makes it difficult to separate the wheat from the chaff. To 
prevent an overload of information, we recommend that Congress and the 
Department of Education work together to winnow this list down to 
require only the information most useful to students and their 
families.
    The final issue I will highlight before turning things over to Nick 
is the number of requirements placed upon higher education that have 
nothing to do with our mission. These include enforcing Selective 
Service registration, combating peer-to-peer file sharing, distributing 
voter registration forms in a federally specified timeframe and format, 
and other actions that divert time and resources. These may all be 
worthy goals, but using colleges and universities as the mechanism to 
achieve them is costly and inefficient. It is our task force's hope 
that Congress will use the upcoming HEA reauthorization as an 
opportunity to review all of the Act's provisions, identify the Federal 
purpose behind their inclusion, and strike requirements that are not 
clearly related to the core mission and responsibilities of higher 
education.
    Chancellor Zeppos will now share with the committee his experiences 
and perspectives and provide additional information on the Task Force 
Report. So, let me close by once again thanking the committee for this 
opportunity to testify and for the significant time and attention you 
have given to this important matter.

    The Chairman. Thanks, Dr. Kirwan.
    Chancellor Zeppos, if you could summarize your comments in 
about 10 minutes, we'll then go to the Senators for questions 
and comments.

    STATEMENT OF NICHOLAS S. ZEPPOS, CHANCELLOR, VANDERBILT 
                   UNIVERSITY, NASHVILLE, TN

    Mr. Zeppos. Thank you, Chairman Alexander, Ranking Member 
Murray, and members of the committee. Thank you for inviting me 
to testify before you today in my capacity as co-chair of the 
Task Force on Federal Regulation of Higher Education.
    It's been my privilege to serve in this capacity, and I'm 
honored to be here with my co-chair and esteemed colleague, 
Brit Kirwan, to discuss ways that we might improve the 
regulatory structure for colleges and universities.
    The underlying premise of our work is the belief that 
smart, better regulations protect students and families, keep 
them safe, and hold colleges and universities accountable for 
the considerable public dollars we receive. Taxpayers and the 
government, I want to stress, have the right to know that these 
funds are being spent wisely. Thus, we embrace the need for 
Federal regulations.
    We are not here in any way to ask for any deregulation of 
higher education. Rather, at your invitation, we wanted to 
bring to you and bring to your attention the fact that over 
time, we believe oversight of higher education has expanded in 
many ways that undermines the ability of our institutions to 
best serve students, accomplish our missions, and innovate in 
this dynamic economy.
    Many of the Department's regulations are well-intended but 
unnecessarily voluminous, too often ambiguous, and the cost of 
compliance has become unreasonable. It is having a real impact 
on costs of college and tuition. Even more troublesome, we are 
very concerned that these regulations stand as a barrier for 
students' access to college education.
    For years, I'm sure you know, colleges and universities 
have complained to policymakers about the burdensome nature of 
Federal regulations. We've gotten quite good at it, and I would 
put myself in that category, which is why I accepted this 
assignment. We have often found sympathetic ears on Capitol 
Hill, but the higher education community has not, I believe, 
been as transparent as we are in presenting the data in support 
of this position and to really work closely with you for 
proposed solutions.
    This report, as Brit discussed, offers concrete suggestions 
for reform. I will say as a cautionary comment, Senator 
Alexander did not mention it but I was a lawyer in Washington, 
DC, practicing administrative law, representing probably every 
government agency before I joined the Vanderbilt Law School 
faculty. I know that simply revising regulations is really not 
the way to address some of the underlying problems with the 
process by which the Department promulgates these regulations. 
We believe changes are needed in how the Department develops, 
implements, and enforces regulations, working closely with 
colleges and universities. Our report offers recommendations to 
improve each phase of the regulatory process.
    For example, the negotiated rulemaking process is very well 
intended, but we believe it has to be reformed to make sure it 
achieves its purpose. Unrelated issues are often bundled 
together in a complex process. Facilitators are really not 
permitted to serve as arbiters in reaching a consensus on good, 
smart regulations from a group of informed citizens.
    The Department should provide clear regulatory safe harbors 
to help institutions that abide by their standards meet their 
compliance obligations. Such safe harbors exist in other areas 
of the law that pertain to universities. As Chairman Alexander 
mentioned, Congress required the Department in 2008 to produce 
an annual compliance calendar. We believe that that would be a 
great step forward if they were to do so.
    The Department should also recognize when institutions are 
acting in good faith according to the guidelines set forth by 
the Department that are clearly stated. There should be some 
sort of statute of limitations for enforcement of Department 
regulations. We've given examples where it's taken more than 10 
years to complete a program review and issue fines. If we are 
going to have an effective system where universities are held 
accountable through a return of funds, through a system of 
fines, we simply have to have a better timeline to make sure 
that the message is heard.
    Finally, we suggest Congress consider developing and 
implementing, as Senator Murray mentioned, risk-informed 
regulatory approaches, where appropriate.
    Let me discuss the issue of cost that was brought up by 
Chairman Alexander. We've heard many numbers knocked around 
over the decades, literally. What is the real number?
    Over the course of the last 6 months, we at Vanderbilt 
conducted an in-depth analysis to look at the cost of Federal 
regulatory compliance, excluding those related to our very 
large clinical health care mission. To give you a sense of 
size, that left about $1.36 billion in the university's budget 
by excluding the clinical enterprise.
    We wanted to know not only the total cost but we actually 
tried to identify what are the areas that we could look at to 
reduce our own cost of spending. We found regulatory compliance 
and costs, interestingly, that are centralized in many parts of 
the university but, not surprisingly, particularly for the 
larger universities, are spread across all lines of activities 
in the university.
    We found that Vanderbilt spends approximately $146 million 
annually on Federal compliance. As Chairman Alexander noted, 
that represents about 11 percent of our non-clinical expenses. 
Put another way, this equals $11,000 in additional tuition per 
year for our 12,757 students.
    As a major research institution with nearly $500 million in 
federally supported research, I want to emphasize that a 
significant share of this cost is in complying with research 
regulations, and I commend the committee for looking at that 
area as well.
    We also calculated that we spent approximately $14 million 
annually in compliance with higher education-related 
regulations such as accreditation and Federal financial aid. 
One of the things we believe is happening is we're not asking 
for all the costs, but as a large institution we're able to 
spread a number of the costs over a pretty large base of 
activities. We hear a lot from some of our smaller institutions 
and colleagues that they just don't have that chance.
    Again, I want to thank you for this opportunity to co-chair 
this task force and to present what I believe is the first step 
in moving forward with our collective recommendations.
    Regulatory reform represents an area where we can remove 
red tape, hopefully reduce some costs while we continue our 
prudent stewardship of tax dollars and provide a safe and 
welcoming environment for all of our students, faculty and 
staff. We also believe it's incredibly important for students 
and faculty to receive the information they need to make the 
informed choices before they enroll in a school and accept the 
financial obligations associated with that.
    I think you will agree that the recommendations report 
includes some fairly clearly written, commonsense proposals 
that will hopefully benefit the greater society at large. 
Historically, universities and colleges have served as drivers 
of the general national interest. They promote education, they 
promote discovery, and they provide solutions to face the 
challenges that we all face.
    We talk about the American Dream on our campus, and we 
believe it happens every day as we see young people coming to 
attend our university.
    We all benefit from Federal funding, and it is spent for 
the national interest. We want to be good stewards, but we'd 
also like to see that money reinvested more in core missions of 
aiding and advancing society.
    I look forward to your questions, and I look forward to 
further participation in advancing our recommendations. Thank 
you very much.
    [The prepared statement of Dr. Zeppos follows:]
                Prepared Statement of Nicholas S. Zeppos
                                summary
    Key Points in Chancellor Zeppos' testimony:

     Our underlying premise is the belief that smart 
regulations protect students and families and hold colleges and 
universities accountable for the considerable public dollars they 
receive. Tax payers and the government have the right to know that 
these funds are being spent wisely. We are not here to ask you to de-
regulate higher education.
     Over time, oversight of higher education has expanded in 
ways that undermine the ability of our institutions to serve students 
and accomplish our missions. Many of the Department's regulations are 
unnecessarily voluminous and too often ambiguous, and the cost of 
compliance has become so unreasonable that it is having a real impact 
on college costs. Even more troublesome, some regulations are a barrier 
for students' access to a college education.
     Change is needed to address how the Department develops, 
implements and enforces regulations. Our report offers recommendations 
to improve each phase of the regulatory process. For example:

          The negotiated rulemaking process should be reformed 
        to ensure it achieves its purpose. Unrelated issues should not 
        be bundled together. Facilitators should be permitted to serve 
        as arbiters in reaching consensus.
          The Department should provide clear regulatory safe 
        harbors to help institutions that abide by certain standards to 
        meet their compliance obligations. Such safe harbors exist in 
        other areas of law that pertain to universities.
          Congress required the Department in 2008 to produce 
        an annual compliance calendar. They have yet to do so.
          The Department should recognize when institutions are 
        acting in good faith.
          There should be a statute of limitations for 
        enforcement of Department regulations. Taking over 10 years to 
        complete a program review and issue fines should be 
        unacceptable.
          Congress should consider developing and implementing 
        ``risk-informed'' regulatory approaches where appropriate.

     Following an in-depth look at the cost of Federal 
regulatory compliance, excluding those related to our healthcare 
mission, we determined that we spend approximately $146 million 
annually on Federal compliance, representing about 11 percent of our 
non-clinical expenses. While a significant share of this is in 
complying with research-related regulations, we spend approximately $14 
million annually in compliance with higher education-related 
regulations such as accreditation and Federal financial aid.

     We are now working with a number of other institutions 
across the country to measure and compare our findings. We will have 
conclusive data from these studies this spring.
     Regulatory reform represents an area where we can remove 
red tape and reduce costs while we continue our prudent stewardship of 
tax dollars and provide students and families the information they need 
to make informed choices. The recommendations in our report are common 
sense proposals that will benefit the greater good and society at-
large.
                                 ______
                                 
    Chairman Alexander, Ranking Member Murray, members of the 
committee, thank you for inviting me to testify before you today in my 
capacity as the co-chair of the Task Force on Federal Regulation of 
Higher Education. It has been my privilege to serve in this capacity, 
and I am honored to be here with my co-chair and esteemed colleague, 
Chancellor Kirwan, to discuss ways we might improve the regulatory 
structure for colleges and universities.
    Let me echo what Chancellor Kirwan stated in his remarks. The 
underlying premise of our work is the belief that smart regulations 
protect students and families and hold colleges and universities 
accountable for the considerable public dollars they receive. Tax 
payers and the government have the right to know these funds are being 
spent appropriately, thus we embrace the need for Federal regulations. 
We are not here to ask you to de-regulate higher ed. Rather, we want to 
bring attention to the fact that, over time, oversight of higher 
education has expanded in ways that undermine the ability of our 
institutions to serve students and accomplish our missions. As we 
conclude in our report, many of the Department's regulations are 
unnecessarily voluminous and too often ambiguous, and the cost of 
compliance has become so unreasonable that it is having a real impact 
on college costs and tuition. Even more troublesome, some regulations 
are a barrier for students' access to a college education.
    For years, colleges and universities have complained to 
policymakers about the burdensome nature of Federal regulations--we've 
gotten quite good at it. And we have often found sympathetic ears on 
Capitol Hill. But the higher education community has not been as 
transparent--until now--in presenting data in support of our position 
and proposed solutions. This report provides concrete suggestions for 
reform.
           recommended improvements in the regulatory process
    As an administrative lawyer, I know that simply revising existing 
regulations is not sufficient to address the underlying problems with 
the process by which the Department promulgates regulations. Change is 
needed to address how the Department develops, implements and enforces 
regulations. Our report offers recommendations to improve each phase of 
the regulatory process; some of those recommendations follow.

     The negotiated rulemaking process should be reformed to 
ensure it achieves its purpose. Unrelated issues should not be bundled 
together. Facilitators should be permitted to serve as arbiters in 
reaching consensus.

    The ``bundling'' of unrelated issues for consideration during a 
single negotiated rulemaking has become a serious problem. More 
specifically, the Department has too often grouped a host of unrelated 
issues into a single panel, choosing negotiators on a disparate set of 
issues and thus creating situations in which only a small number of 
negotiators are knowledgeable enough to engage on any given issue. In 
such cases, a very small number of negotiators may determine the 
outcome of rules with broad public policy implications.
    The February-May 2014 negotiated rulemaking on ``Program 
Integrity'' illustrates this point. A single negotiating committee was 
tasked with reaching consensus on, among other issues, ``cash 
management'' of title IV funds; State authorization of distance 
education programs; State authorization of institutions with foreign 
locations; ``clock-to-credit-hour'' conversion; the definition of 
``adverse credit'' for borrowers in the PLUS Loan Program; and the 
retaking of courses. Given the range of individuals needed for such a 
panel, it was not surprising that most negotiators were knowledgeable 
about a limited number of these issues. It was even less surprising 
that no consensus was reached on the regulatory package.
    Another serious obstacle to successful negotiated rulemaking panels 
in recent years has to do with the panels' facilitators. As the 
individuals charged with running the negotiating sessions, facilitators 
should serve as guardians of the process. Unfortunately, that is not 
the case. In recent years, the Department has given facilitators a 
limited role, with little authority to resolve differences that arise. 
This part of negotiated rulemaking should also return to its original 
purpose, which involved facilitators who served as arbiters of fairness 
and who use their skills to help achieve consensus not by encouraging a 
particular substantive outcome, but by being more active in exploring 
areas of agreement.
    The result of these practices is that the Department exercises an 
extremely high degree of control over the entire process, not only 
selecting all the committee members and limiting the role of the 
facilitators, but also doing all the drafting and taking a very strict 
view of what constitutes a consensus. These and additional concerns 
about the Department's process for negotiated rulemaking and other ways 
to improve the process are explored further in the report, including in 
an appended white paper.

     The Department should provide clear regulatory safe 
harbors to help institutions that abide by certain standards to meet 
their compliance obligations. Such safe harbors exist in other areas of 
law that pertain to universities.

    The Department's requirements are so complicated in many areas that 
it is impossible for colleges and universities to be certain they are 
in compliance, even when they take carefully considered steps they 
believe are necessary. Clear safe harbors--provisions in the law that 
will protect institutions from liability as long as certain conditions 
have been met--should be established to help institutions meet their 
compliance obligations.\1\
---------------------------------------------------------------------------
    \1\ Definition adapted from Black's Law Dictionary Free Online 
Legal Dictionary, 2d ed., available at: http://thelawdictionary.org/
safe-harbor/.
---------------------------------------------------------------------------
    Safe harbors currently exist in other areas of law that apply to 
institutions of higher education. For example, colleges and 
universities hiring foreign nationals through the H-1B visa program 
must pay those individuals wages that are equal to or higher than the 
prevailing wage in the occupations for which they were hired. If an 
institution uses Department of Labor-determined prevailing wage levels, 
it has a safe harbor against challenges to its prevailing wages. The 
Federal ``deemed export'' rules prohibit certain individuals from 
receiving controlled information and/or controlled technologies without 
the required license(s), exception, or exemption, even if those 
individuals are otherwise authorized to work within the United States. 
However, the ``fundamental research exclusion'' creates a safe harbor 
from such requirements.\2\ In addition, under the terms of a 
governmentwide policy, entities that receive Federal funds above a 
certain amount must undertake an independent audit annually. This 
process, commonly referred to as an A-133 audit, was designed as a safe 
harbor against excessive audits by Federal agencies.
---------------------------------------------------------------------------
    \2\ Fundamental research means basic and applied research in 
science and engineering, the results of which ordinarily are published 
and shared broadly within the scientific community, as distinguished 
from proprietary research and from industrial development, design, 
production, and product utilization, the results of which ordinarily 
are restricted for proprietary or national security reasons. See: 
http://www.ucop.edu/ethics-compliance-audit-services/compliance/
international-compliance/on-campus-research-with-foreign-
nationals.html.
---------------------------------------------------------------------------
    Congress should instruct the Department to make use of safe harbors 
whenever possible.

     The Department should not make significant changes in 
policy without following the Administrative Procedure Act's (APA) 
notice and comment procedures.

    The APA's notice and comment procedures are a valuable, time-tested 
tool for developing good regulations.\3\ Soliciting public comments and 
incorporating this feedback ensures that the agency has considered a 
wide range of viewpoints and allows for the opportunity to address 
unanticipated consequences before the regulation is finalized. When 
developing formal regulations, the Department is usually careful to 
follow the APA's requirements. However, as it increasingly turns to 
sub-regulatory guidance to pursue its policy goals, the agency often 
imposes significant new requirements without the benefits afforded by 
the notice and comment process. The Department should always use the 
notice and comment process. If, in rare circumstances, it determines it 
cannot, it should articulate a reasonable basis for dispensing with it.
---------------------------------------------------------------------------
    \3\ The ``notice and comment'' process has been adopted by a number 
of other countries, including China. Jeffrey S. Lubbers, ``Notice-and-
Comment Rulemaking Comes to China,'' Administrative and Regulatory Law 
News 32(1): 5-6, fall 2006, available at: http://www.law.yale.edu/
documents/pdf/Intellectual_Life/ch_Lubbers-Administrative_comment.pdf.
---------------------------------------------------------------------------
    The Department's policies would be better informed and more 
effective with the benefit of formal comments from all interested 
parties. In addition, when there is a full and public vetting of policy 
choices, the chances of good policy being upheld in any future 
litigation will be greatly increased. Therefore, it is critical that 
Congress ensure that agencies follow the procedures set forth in the 
APA so that the public is given a meaningful opportunity to comment 
before new mandates are imposed.

     Congress required the Department in 2008 to produce an 
annual compliance calendar. They have yet to do so.

    Institutions of higher education have an obligation to comply with 
regulations that the Department of Education is obligated to enforce. 
Compliance is enhanced and the need for audits and fines is greatly 
reduced if institutions are made clearly aware of the requirements they 
face. That was the rationale behind the compliance calendar created by 
Congress in the 2008 HEA reauthorization legislation.
    Under that legislation, Congress mandated that the Department of 
Education publish an annual ``compliance calendar'' that lists all 
compliance requirements and their corresponding deadlines. The goal is 
straightforward: Institutions should receive a clear checklist of 
regulatory and information collection deadlines that documents their 
regulatory obligations. Armed with this information, institutions--
especially small, thinly staffed ones--will be in a much better 
position to comply than they are at present. Given that regulations and 
requirements continue to grow, the compliance calendar should be 
updated annually and made easily available to institutions. This will 
allow institutions to know what is expected of them instead of playing 
catch up and defense.

     The Department should recognize when institutions are 
acting in good faith.

    Very few violations of Federal regulations are deliberate or 
reflect negligence by institutions. Nor are all violations equally 
serious. At present, minor and technical violations are not 
acknowledged as such by the Department. We believe that the Department 
ought to recognize when institutions have clearly acted in good faith.
    In the summer of 2014, for example, the University of Nebraska at 
Kearney was fined $10,000 for mistakenly misclassifying a 2009 incident 
involving the theft of $45 worth of goods from an unlocked custodian's 
closet as a larceny rather than a burglary.\4\ Because the Clery Act 
does not require the reporting of larceny,\5\ the university did not 
report the incident on its Annual Security Report. In an audit, the 
Department ruled that the incident was a burglary and fined the 
institution for failing to report it. We believe that this is an 
example of an institution being overly penalized for a relatively minor 
technical violation. In such cases, the size of the sanctions imposed 
by the Department does not appropriately reflect the weight of the 
infraction involved. Fines that fail to distinguish the important from 
the trivial undermine the Department's credibility.
---------------------------------------------------------------------------
    \4\ According to one article, the stolen items were a bag of potato 
chips, Little Debbie Nutty Bars, and a set of walkie-talkies. Ben 
Miller, Roll Call, August 25, 2014, available at: http://
www.rollcall.com/news/
how_unnecessary_data_reporting_requirements_turned_a_44_
theft_into_a_10000-235831-1.html?pg=1&dczone=emailalert.
    \5\ To be precise, larceny is only reported under Clery when it 
occurs in connection with a hate crime.
---------------------------------------------------------------------------
    Some agencies, including the Internal Revenue Service and 
Securities and Exchange Commission, utilize voluntary correction 
programs. Under those programs, regulated entities identify instances 
of non-compliance and report them to the agency. The agency then 
reviews the self-report, collects evidence of correction, and issues a 
confirming letter. Congress and the Department should consider the 
benefits of developing a similar voluntary program in appropriate 
circumstances--for example, in cases involving technical violations 
where an institution was acting in good faith.

     There should be a statute of limitations for enforcement 
of Department regulations. Taking over 10 years to complete a program 
review and issue fines should be unacceptable.

    Under the Higher Education Act, colleges and universities are 
required to submit documents and other records requested by the 
Department within a prescribed amount of time. While institutions are 
required to adhere to strict time lines in terms of responding to the 
agency's requests, there are no time limits imposed on the Department 
in terms of issuing a final determination after a program review.\6\ By 
way of example, in May 2013, Yale University was ordered to repay 
financial aid funds based on a Department of Education audit undertaken 
in 1996. The University of Colorado received a similar demand based on 
a 1997 audit. Even though the universities appealed in a timely 
fashion, it took 17 and 16 years, respectively, for the Department to 
take action.
---------------------------------------------------------------------------
    \6\ Federal Student Aid Programs, Program Review Guide for 
Institutions, 2009, available at: http://www.ifap.ed.gov/program-
revguide/attachments/2009ProgramReviewGuide.pdf.

     Finally, we suggest Congress consider developing and 
implementing ``risk-informed'' regulatory approaches where appropriate.
    All colleges and universities are regulated in the same manner, 
regardless of the level of risk involved. This forces the Department to 
expend energy on institutions that should command relatively little 
attention, while simultaneously skimping on those where more oversight 
is warranted. Painting all institutions with the same broad brush does 
not serve anyone well.
    A white paper the task force commissioned to look at this issue in 
greater detail is appended to our report. It includes the suggestion 
that a risk-informed regulatory approach could be applied to 
requirements for financial aid reporting; accreditation; and program 
reviews by the Federal Student Aid office.
    While a risk-informed regulatory system is not appropriate for 
every issue, there is growing consensus that institutions with greater 
levels of risk to students and taxpayers should be regulated by the 
Department more closely. After extensive consultations with the higher 
education community, Congress should require the Department to develop 
and implement risk-informed regulatory systems wherever appropriate. A 
more risk-informed approach--rather than a one-size-fits-all--would 
represent a smarter way of regulating.
                 compliance with regulations is costly
    While government regulation can confer significant benefits and 
protections, the costs associated with heavy-handed and poorly designed 
regulations can be enormous. Unfortunately, calculating the precise 
benefits and costs of regulation is both difficult and time-consuming. 
One reason for this is that duties and functions associated with a new 
regulation are usually absorbed by staff who already perform other 
duties, simply adding to their workload. Similarly, estimates of the 
cost of complying with a new regulation may fail to take into account 
the complicated interplay between new and existing requirements. 
Regulations do not exist independently of each other, and the interplay 
of multiple requirements can add exponentially to the cost of 
compliance. For these and other reasons, attempts to systematically 
quantify these costs have been few and far between.
    Over the course of 6 months last year, Vanderbilt conducted an in-
depth analysis to look at the cost of Federal regulatory compliance, 
excluding those related to our healthcare mission. We wanted to know 
not only the total cost but to identify areas where we could reduce our 
own internal costs. What we found is that regulatory compliance and 
costs are spread across the University.
    We found that Vanderbilt spends approximately $146 million annually 
on Federal compliance. That represents about 11 percent of our non-
clinical expenses. Put another way, this equates to approximately 
$11,000 in additional tuition per year for each of our 12,757 students. 
As a major research institution with nearly $500 million annually in 
federally supported research, a significant share of this cost is in 
complying with research-related regulations. But we also calculated 
that we spend approximately $14 million annually in compliance with 
higher education-related regulations such as accreditation and Federal 
financial aid.
    We are now working with a number of other institutions across the 
country--from all sectors of higher ed--to measure and compare our 
findings. We will have conclusive data from these studies this spring. 
We are hopeful that our efforts will help inform the committee's work 
in reforming regulations and the regulatory process.
                               conclusion
    Effective oversight can help colleges and universities keep costs 
down, keep students safe, focus on educating students, and be good 
stewards of Federal funds. In that spirit, the Task Force developed the 
following guiding principles to help govern the development, 
implementation, and enforcement of regulations by the Department:

     Regulations should be related to education, student 
safety, and stewardship of Federal funds.
     Regulations should be clear and comprehensible.
     Regulations should not stray from clearly stated 
legislative intent.
     Costs and burdens of regulations should be accurately 
estimated.
     Clear safe harbors should be created.
     The Department should recognize good faith efforts by 
institutions.
     The Department should complete program reviews and 
investigations in a timely manner.
     Penalties should be imposed at a level appropriate to the 
violation.
     Disclosure requirements should focus on issues of 
widespread interest.
     All substantive policies should be subject to the 
``notice-and-comment'' requirements of the Administrative Procedure 
Act.
     Regulations that consistently create compliance challenges 
should be revised.
     The Department should take all necessary steps to 
facilitate compliance by institutions.

    Apart from our interest in seeing that regulations are coherent and 
fair, these principles also reflect our belief that all stakeholders--
students and taxpayers, as well as colleges and universities--reap the 
benefit of well-designed regulation. We want to keep costs down, keep 
students safe, focus on educating students, and be good stewards of 
Federal funds. These principles will help us do that. Mr. Chairman, 
under your leadership we hope this committee will also adopt these 
principles as you move forward with reauthorizing the Higher Education 
Act.
    Again, thank you for the opportunity to co-chair this Task Force 
and to present our collective recommendations to you today. Regulatory 
reform seems to be an area where we can remove red tape and reduce 
costs while we continue our prudent stewardship of public dollars and 
provide students and families the information they need to make 
informed choices. I think you will agree that the recommendations in 
our report are common sense proposals that will benefit the greater 
good and society at-large. Historically, universities and colleges have 
served as drivers of the general national interest by promoting 
education and discovery that provides solutions to the challenges that 
face humanity. As a Nation, we all benefit when Federal funding is 
spent to further this national interest, when universities are good 
stewards, and more money is reinvested in our core mission of aiding 
and advancing society. Relief from some of the most burdensome or ill-
founded regulations and a better process for developing new ones would 
help higher education advance these important goals. I look forward to 
your questions and to working with the committee to implement our 
recommendations in the upcoming reauthorization of the Higher Education 
Act.

    The Chairman. Thanks, Chancellor Zeppos.
    Let me go to your last point first and ask both of you. 
I've only got 5 minutes, so if you could give me short answers, 
I'd appreciate it, and we'll talk more later.
    How can we make this a continuing conversation? For 
example, would you be willing if he asked you, which I expect 
he might, to sit down with Secretary Duncan and talk about the 
recommendations you have that the Department by itself could 
take care of?
    Mr. Zeppos. Absolutely. I'm sure Nick would agree with me. 
We're invested in this process now.
    The Chairman. How many of the recommendations, the 59 or 
the 10, roughly, could the Department itself deal with and 
wouldn't require a congressional action?
    Mr. Zeppos. Let me ask Terry.
    Could you estimate that number?
    I was going to say 10 to 12. Terry just said 12, a dozen 
recommendations could probably be done directly by the 
Department.
    The Chairman. Maybe a quarter----
    Mr. Zeppos. Right, exactly.
    The Chairman [continuing]. A quarter of the recommendations 
Duncan could deal with.
    Mr. Zeppos. Congress could do.
    Nick, I'm sure you would be pleased to join me.
    Mr. Zeppos. I would be pleased. I mentioned in one of our 
committees that after the terrible attacks of 9/11, I would say 
that the friction between universities--research universities 
and some of the law enforcement agencies and the intelligence 
agencies--it got pretty intense. What I thought was wonderful 
was that the director of the FBI stepped forward and said we 
have export-import regulations, there are a bunch of 
immigration issues that are coming up; we seem to always be in 
tension. Why don't I have 15 of you meet with me twice a year 
and go over----
    The Chairman. If I may, I'd like to focus. Do you agree 
that about a quarter of them----
    Mr. Zeppos. Yes.
    The Chairman. You would agree that you'd be willing to sit 
down with Secretary Duncan?
    Mr. Kirwan. Absolutely.
    The Chairman. If he'd like to do it.
    Chancellor Zeppos, as I listened to you, Vanderbilt has 
about a half-billion dollars in Federal research funds, right?
    Mr. Zeppos. Yes, about $500 million, about $620 total.
    The Chairman. The total costs of regulation were about $150 
million. I think you said that $14 million of that was not 
related to research.
    Mr. Zeppos. Right, right.
    The Chairman. That means it sounds like about $130 million 
or so is related to research. And if my math is even roughly 
right, about a quarter of all your research dollars seem to go 
to keeping up with rules and regulations. The head of the 
National Academy of Sciences told me that their studies twice 
showed that 42 percent of the time was spent on research.
    Both of you represent universities that do a lot of 
government-sponsored research, and all of us, every one of us 
sitting at this table would like to see a thousand more multi-
year grants at NIH or the various Federal agencies.
    What do you think of the idea that 42 percent of the time 
is spent on administrative work by investigators, or that maybe 
as much as 20 or 25 percent of the money is spent on that? Is 
that excessive? If it is excessive, how should we go about 
trying to reduce it? Because that might be the first place to 
get another billion dollars and another thousand multi-year 
grants for government-sponsored research.
    Mr. Kirwan. Chairman Alexander, you're so right to focus on 
this issue. It is an enormous frustration for our researchers 
and our universities. It's my understanding that the National 
Academy of Sciences has been charged with looking at a cost 
analysis of the research enterprise, sort of in parallel to 
what we have done focusing on the Department of Education. I 
believe they're expected to issue a report on what you're----
    The Chairman. The dollar figures and the time figures, do 
they sound about right based on your experience? That's an 
astonishing amount of time and money, to me.
    Mr. Zeppos. I would agree with those numbers.
    Mr. Kirwan. My colleague just handed me a note that we do 
within the system about $1.3 billion of research, and $225 
million was spent on administrative work, much of it having to 
do with compliance.
    The Chairman. If the head of the Academy's estimate was 
right that maybe 10 percent would be more appropriate than 42 
percent----
    Mr. Kirwan. That's a lot of money.
    The Chairman [continuing]. That's a lot of money.
    Mr. Kirwan. A lot of research grants.
    Mr. Zeppos. A lot of innovation, a lot of potential cures.
    The Chairman. Your subject was the Department of Education, 
not this. That's a very good point. That's something that we 
could consider.
    Why don't I go to Senator Murray? My time is up.
    Senator Murray. Thank you, Mr. Chairman.
    Dr. Kirwan, let me start with you. The task force suggested 
that students need better information when choosing a college 
to attend, and it says,

          ``And I agree that currently available consumer 
        information on higher education can be challenging for 
        institutions to report and doesn't always give us an 
        accurate picture of key data points like graduation and 
        transfer rates.''

    In your view, can you share with us how we could change the 
current Federal data system to provide better information for 
prospective students and their families?
    Mr. Kirwan. Well, It would require some further partnership 
or collaboration between the Department of Education and 
representatives from higher education, in consultation with 
parents and students, to try to understand what are the really 
key elements of information that students and families need.
    In the spirit of good will, we could sit down, informed by 
a conversation with the people we serve, the students and their 
parents, and develop a list of the most important pieces of 
information and have some uniform expectation that every 
institution would make that information available.
    Senator Murray. What do you think that system should tell 
us?
    Mr. Kirwan. Well, it should certainly tell us, completion 
rates for students, default rates, employment rates, gainful 
employment--did I say default rates?--availability of financial 
aid, and average time to a degree would be some of the elements 
that would be very relevant for students and their families.
    Senator Murray. OK, I appreciate that. Any further thoughts 
you have on that, if you could give them to us, we will work 
through this.
    Let me ask both of you. Students, I think we all believe, 
should be able to earn their degree without fear of violence. 
The reality, as we know, is that domestic and sexual assault 
continue to be problems on our campuses across the country. 
Both of you have been dealing with this directly, I know.
    Sexual assault turns students? lives upside-down, and I 
believe we have to do a lot more to prevent it at our Nation's 
schools. I hope that this committee can actually have a real 
conversation with higher education leaders like you about what 
we can do to stop this crisis and ensure Americans that 
colleges and universities are doing everything to keep their 
students safe. This is a top priority for families and students 
across the country. It is for me. It is for many of us.
    Your report seems to suggest that universities need so-
called safe harbors to protect them from regulations and 
liability in these cases in order to address this crisis. What 
other efforts do you think this committee should be focused on? 
I assume you're not suggesting that we should be focused on 
protecting universities' legal liability rather than focused on 
protecting students from campus sexual violence. What do you 
think this committee should be focused on?
    Mr. Zeppos. The safe harbors, what we were talking about is 
we really didn't put them in the context of this specific area. 
Let me emphasize that there's a lot of work to be done in this 
area, and we would be more than pleased to be part of coming up 
with the best solutions to address this problem, Senator 
Murray.
    The safe harbors we talked about were really in the areas 
of some of the financial areas, maybe in terms of the Clery Act 
notices where we're actually issuing the notices sometimes 
after a crime occurs because we're concerned that we just 
learned about it but we have to notify people anyway, just 
getting some direction in that area, and then in the financial 
areas we believe.
    Senator Murray. The safe harbors that you were recommending 
in this don't apply to the issues that we're talking about in 
terms of sexual violence?
    Mr. Zeppos. I don't think that's in the scope of our 
report. I would say that there has been guidance from the 
Department in this area that we and other universities are 
following. We don't see that as an issue. We feel like we've 
gotten guidance from the Department. We would welcome your kind 
of full conversation with the Department and with others on how 
we really crack this problem. It's a very serious problem.
    Senator Murray. I know both of you have been dealing with 
this on your campuses, and I really hope that we can hear from 
you, as well as other commission members actually, on what 
you're doing to protect students from rape and sexual assault 
and what other efforts should be embraced nationwide to protect 
safety. It's really important for us to hear from you and for 
us to focus on this.
    Mr. Chairman, I would like to, for the record, submit a 
statement from the National Task Force To End Sexual and 
Domestic Violence Against Women. It's important that we hear 
that.
    The Chairman. Thank you, Senator Murray. That will be a 
part of the record.
    [The information referred to may be found in Additional 
Material.]
    Senator Burr, and then Senator Bennet.

                       Statement of Senator Burr

    Senator Burr. Thank you, Mr. Chairman. I, as you have 
already eloquently done, thank all of the members of the 
committee for their tireless work. I would also like to 
highlight for my colleagues the great work of President Molly 
Broad, who is a dear friend and who represented the University 
System in North Carolina, as well as Chancellors Harold Martin 
and the current president of the University System, Tom Ross, 
who were also part of this product, this report.
    Gentlemen, today I'm going to introduce legislation that's 
similar to that that was just introduced by Congresswoman Foxx 
in the House that would repeal regulations around defining 
credit hours, State authorization, gainful employment, and 
teacher preparation.
    In your report you recommend repealing, at least in part, 
all of these. Can you talk any further about these specific 
regulations and what they mean for innovation and compliance 
burdens on campus?
    Mr. Kirwan. I spoke a moment ago about the State 
authorization, and we certainly applaud that part of your bill 
to eliminate the requirement of getting authorized in every 
State where there is a student.
    With regard to gainful employment, we in the report 
acknowledged that there could be some value in having gainful 
employment, but our concern was that the regulations have been 
built up so that it is now required that something like 30 
gainful employment reports for each program that a student 
takes, and that just seems so excessive and a tremendous burden 
to our institutions to make that kind of reporting effort on 
gainful employment for programs.
    Do you want to add to that?
    Mr. Zeppos. Yes. I would say that our reputation as 
universities is that we're usually pretty slow and sclerotic, 
but I think there's much more dynamism, particularly in 
distance education, flip classrooms. We have a joint class 
taught with the University of Maryland in engineering, and I 
think that when we see someone putting out a MOOC that's a free 
course and the State says, ``Well, maybe you didn't register,'' 
maybe this could be a revenue collection opportunity, we kind 
of feel like we're giving this away for free, we're trying to 
innovate, we're trying to educate more people.
    I had an experience just the other day. I'm always happy to 
answer questions, but I had one come up to me where I had a 
State regulatory agency ask for all my internal audit document 
reports on my whole medical center, the whole place, before I 
did a distance nursing program. Again, we're happy to be 
cooperating, but the State authorization, this is an area where 
we have a shortage of health care workers. The future of health 
care is going to be teamwork. We do see the State authorization 
as really limiting.
    On the teacher preparation--and we talk about this in the 
report, and we've been in discussions with OMB--the cost 
estimates that come out of the Department, we're not two ships 
passing in the night, we're two universes passing in the 
multiverse. They'll get a $40 million number, and then we'll 
hear from California $300 million to implement, with a $200 
million computer system to implement it. All we want to do is 
say, ``Where did you get these numbers from, and could we sit 
down and figure it out?'' This is much, much more expensive.
    We believe in these regulations, but when we see these cost 
estimates coming out that seem immaterial and our numbers are 
exponentially higher, we think something is fundamentally 
wrong.
    Mr. Kirwan. Senator Burr, if I might add, the credit hour 
rule is one that I think my colleagues on the task force would 
feel is increasingly problematic in this day and age where 
we're moving to an era where we have competency-based credit, 
credit for prior learning, and that rule is just out of sync 
with the realities of the direction education is taking.
    Senator Burr. Well, again, I thank you for the very in-
depth look that the panel has taken.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Burr.
    Senator Bennet.

                      Statement of Senator Bennet

    Senator Bennet. Thank you, Mr. Chairman, and thank you for 
all of your work. I also want to thank Bruce Benson from the 
University of Colorado and Bill Armstrong, a predecessor of 
mine here, the president of Colorado Christian University, for 
their help on this report. I hope that we are using it to 
inform our work going forward.
    Mr. Chairman, I want to thank you for your leadership of my 
favorite forum, and with your indulgence I'm going to use it, I 
think I heard you say, for demonstrative purposes, once on the 
floor.
    Just some questions we think it's important to ask our 
students before we can actually give them financial aid in this 
country.
    What is your and your spouse's adjusted gross income for 
2014? Adjusted gross income is on IRS Form 1040, line 137, 
1040A, line 21, or 1040EZ, line 4.
    Another question: How much did you earn from working in 
2014? How much did your spouse earn from working in 2014?
    As of today, what is your total current balance of cash, 
savings and checking accounts? Don't include student financial 
aid.
    As of today, what is the net worth of your and your 
spouse's investments, including real estate? Don't include the 
home you live in. Net worth means current value minus debt.
    As of today, what is the net worth of your and your 
spouse's current businesses and/or investments? Don't include 
family farm or family business with 100 or fewer full-time or 
full-time-equivalent employees.
    Combat pay or special combat pay. Only enter the amount 
that was taxable and included in your adjusted gross income. 
Don't include untaxed combat pay.
    Tax-exempt interest income from IRS Form 1040, untaxed 
portions of IRS distribution, IRS Form 1040.
    We had to hire people in the Denver Public Schools to 
actually fill out these forms for people.
    If people think this is trivial, there are millions of 
students across the country that aren't getting financial aid 
today because of this form. That makes no sense.
    The testimony in front of this committee was that with just 
two questions--and this is the bill that we have together, Mr. 
Chairman--with just two questions we could answer this for 96 
percent of families.
    This is cruel to put people through this when we don't need 
to put people through this, and I hope we will make these 
changes and many of the other ones that we're all working on 
together because students are dealing with this in real time, 
not sometime later.
    Having said all that and having gotten it off my chest, I 
now have a question. I was reading some stuff on the weekend, 
really interesting new reports out of the University of 
Pennsylvania about student aid and cost of college, and 
admittedly 1976 was the peak year, but I think in that year the 
Pell Grants covered roughly 75 percent of the average cost of 
attending college. Today, Pell Grants cover roughly 22 percent 
of what it costs to attend college. That's largely because 
college costs have been out of control, but it's also because 
we haven't kept pace in terms of financial aid.
    In Colorado, the cost of many 4-year colleges has almost 
doubled in the last 10 years, and I suspect some of this is 
because we have a compliance-driven regulatory system, not a 
system that is incentivizing universities to reduce cost. I see 
some examples in Colorado where colleges have done that, but I 
don't think we're giving them a push toward that. I don't think 
we have a structure where we are incentivizing quality, either.
    I wonder whether you guys have some thoughts on what we can 
do as we think about this regulatory structure. With respect to 
title 4, it allows us to focus more on outcomes, more on 
quality, more on affordability. What changes should we make to 
the accreditation process to improve quality and create better 
incentives? If you were writing on a clean slate when it comes 
to outcomes and quality and accreditation, what would you 
write?
    Mr. Kirwan. Senator Bennet, just a sidebar comment. You 
were mentioning the FAFSA form. It actually asks the people 
filling it out three times what State they live in. On three 
different occasions in the form, they have to say what State 
they live in.
    Senator Bennet. The prices don't include your home State.
    [Laughter.]
    Mr. Kirwan. You ask a very, very good question about the 
cost.
    Senator Bennet. A State of misery is the State.
    [Laughter.]
    Mr. Kirwan. Cost and affordability. My perspective is from 
the public sector. Nick can speak from the private sector.
    What's very interesting is that if you actually look at the 
per-
student expenditure in the public sector of higher education 
today, we are spending less dollars per student than we were 10 
years ago. Now, how can that be? Because costs are out of 
control, as is commonly said.
    Well, what's happened over this period is that public 
funds, State investment covered 75 percent of the cost 10 years 
ago, and parents or students covered 25 percent. Today it's 
roughly 50/50. There's been a disinvestment on the part of the 
States, and, of course, what's happened is that parents and 
students have had to pick up that cost.
    Having said that, our institutions have an obligation to do 
whatever they can to control the cost of delivering an 
education, and we need to be more innovative. We need to be 
ensuring that there's a smoother transition for students who 
are transferring from one institution to another.
    Believe it or not, more of the students in the University 
of Maryland in any 1 year have had an experience at another 
institution that are coming into the system, have had an 
experience at another institution than are first-time freshmen. 
There are more transfer students every year than there are new 
students, and we need in higher education to work to make that 
transition from one institution to another more seamless.
    Obviously, the recommendations in this report streamlining 
the regulatory process, as Nick's study from Vanderbilt has 
shown, can help us reduce the cost of education. We need to 
work in partnership with Congress to both share responsibility 
for holding down the growth in cost, but also work with you to 
ensure that there is adequate need-based financial aid for the 
students that we should be serving.
    Mr. Zeppos. Yes. I would just add to that, you know, I work 
at a private university. As I said, I'm K through law school 
public education in the great State of Wisconsin. The erosion 
of State investments in the great State flagship universities 
is a major national crisis. I work at a private university, and 
I love that, but the access that I had as a high school student 
to go to the University of Wisconsin at a very low cost is just 
not there anymore. That's just not there. You're seeing very 
high tuition increases at State universities, and to me, sadly, 
a lot of States are taking a lot of out-of-State students to 
make up for that loss of revenue. I think that has affected 
things.
    In my looking at kind of the cost drivers, I would say that 
administrative costs grow very fast in universities. We have 
our own bureaucracies that we need to tame. The second thing 
that's grown significantly that the revenue just can't keep up 
with are health care costs. You put in administrative costs and 
health care costs, those are growing faster than your revenue. 
That's not a really good financial model to look at.
    You've got to look at the whole institution. This report 
does a really good job of looking at our administrative 
structures and where we can be better, and maybe we can work 
with you and the Department to be better.
    On outcomes, it has to be very institution-specific. One 
school may say I want every kid to have a job. Another school 
may say I expect a third of my students to go on to Ph.D.'s. 
Pushing schools to say where do you fit in this beautiful 
mosaic of American higher education, and then what do you 
really think you are producing and delivering, and having a 
recognition of that heterogeneity is important.
    Senator Bennet. I'm way over time. Thank you, Mr. Chairman.
    The Chairman. No, thank you. It's very interesting.
    Senator Warren.

                      Statement of Senator Warren

    Senator Warren. Thank you, Mr. Chairman. I actually just 
want to add my voice to yours about the importance of 
supporting public education. I grew up in a family where there 
was no money for college, and I graduated from a commuter 
college that cost $50 per semester, and it opened a million 
doors for me and for kids like me.
    It cost $50 per semester because America was investing in 
education. It was investing in the future of our children, and 
we have lost our way on that. We have got to get back to 
investing in our kids so they get a chance to get a decent 
education without being crushed by student loan debt.
    Thank you, thank you very much for that.
    I just want to say also, thank you, Dr. Kirwan and Dr. 
Zeppos, and the other members of the task force, for your 
report and your attention to the money that's being spent on 
administrative costs. You know, college has taken more than 
$160 billion a year in taxpayer money, and strong oversight of 
that investment is powerfully important.
    One of the key purposes of Federal investments in higher 
education is to make college more affordable for people who 
can't afford to spend tens of thousands of dollars every year 
to get an education. When our colleges say that compliance with 
Federal regulations is too costly, then I think we should make 
some changes.
    Chancellor Zeppos, in your testimony you state that 
Vanderbilt would save about $14 million if Congress and the 
Department of Education eliminated its higher education-related 
regulations, right? That was in your testimony. I did the math. 
That's about $1,100 per student at Vanderbilt. If we were to 
follow the recommendations in the report and repeal those 
regulations this year, would Vanderbilt commit to reduce its 
tuition by $1,100 per student?
    Mr. Zeppos. Here's my answer. I answer the question this 
way. The first thing is I tried to personally and 
institutionally address the rise in the cost of education in a 
number of ways.
    Senator Warren. God bless, but I just want to stick to this 
point. If we reduce our end of the cost, that is the cost of 
regulation, and you say that would save you $14 million, I just 
want to know if that $14 million is going to be used to reduce 
Vanderbilt tuitions by $1,100 per student.
    Mr. Zeppos. Well, I don't think we asked for all the 
regulations to be eliminated, so I don't know that----
    Senator Warren. I can do the math. Do you want to do $650 
for half the regulations?
    Mr. Zeppos. I would go back to the Chairman's comments. 
There are areas in universities that are being woefully 
underinvested, and I'd look at my struggling research 
scientists and future engineers and Ph.D.'s, and they can't get 
a training grant. Young investigators are waiting until age 40 
to 45, and universities ought to have some flexibility to say, 
``OK, we brought these costs down, is there a way to 
reinvest?'' I have many students who can't afford to travel in 
a summer abroad program.
    I understand the temptation to say I will promise to cut, 
but I do think we should have the freedom to say this is an 
area of underinvestment and show that to you.
    Senator Warren. Fair enough, Dr. Zeppos. The point is 
you've come in here--and this has been exactly what we talked 
about. The cost is too high. Part of the reason the cost is too 
high, you're telling us, is because of regulations imposed by 
the Federal Government, and I just think if we're going to talk 
about reducing those regulations, this is one place where the 
Federal Government could use its leverage to say if we're going 
to do this, let's estimate the cost and let's bring down those 
costs for students. It's not like you'd have any less money, at 
least by your own calculations. You'd have the same money. We'd 
just like to know that the savings is going to be passed along 
to the students.
    Dr. Kirwan, maybe I should ask you the same question. Can 
you estimate the savings to the University of Maryland?
    Mr. Kirwan. We haven't done the same cost study that Nick 
Zeppos has done at Vanderbilt, so I don't have that sharp of a 
figure.
    Senator Warren. OK. Well, let me ask it another way. Would 
you commit if we reduce these regulations to giving a cost 
estimate and to passing those savings on along to our students?
    Mr. Kirwan. Well, I would respond somewhat the same way 
that Nick did. There are areas at the institution that are not 
getting adequately invested in because of lack of funds, let's 
say need-based financial aid. We would take some of the 
savings, undoubtedly, and move it into the need-based financial 
aid. We might take some of the savings and increase enrollment 
in some of the critical degree programs. We have lots of things 
we're trying to do as an institution, and to tie this 
particular dollar to a dollar reduction in tuition might not be 
in the best interest of the students.
    Senator Warren. Well, Dr. Kirwan, all I can say, with 
respect, is that you're in here asking for a reduction in your 
expenses, and I'm saying that makes a lot of sense to me. At 
some point we've got to use our Federal leverage to say that 
has to be passed on to savings for the students. In other 
words, if you want some changes, there has to be some 
accountability on the other side. For me right now, what's 
right at the center of the target is that we need to bring down 
the cost of college across the board for our students.
    I remember that commuter college that cost $50 a semester. 
It opened doors. It opened real doors for kids who otherwise 
would have had no chance at all to get a college education. 
It's up to us to take the first steps back in that direction.
    Thank you, Mr. Chairman.
    Mr. Kirwan. Senator Warren, if I could just add, we've 
taken this issue of the cost to students very seriously in the 
University System of Maryland, and let me just illustrate. Over 
the last 8 years, tuition has gone up for in-State students a 
cumulative 12 percent in 8 years. That's how seriously we have 
taken the cost of tuition for our students.
    Senator Warren. Dr. Kirwan, I just want to say, I'm not 
saying you're not taking it seriously, either one of you. I'm 
not saying that universities aren't taking it seriously. What 
I'm really addressing is the question of Federal leverage. 
We're putting $160 billion into universities all across this 
country. The universities tell us there's a way to cut costs 
for them, and I'm just saying if we're going to make changes at 
the Federal level, then we should ask for something from our 
colleges across the board. This isn't targeted at Vanderbilt or 
at Maryland. The real point is to say we want to see something 
on the other side. If it's going to save you money, we want to 
see where it's going to result in a lower cost college 
education for our kids.
    Mr. Kirwan. I would advocate need-based financial aid.
    Senator Warren. Thank you.
    The Chairman. Thank you, Senator Warren.
    We'll have time for another round of questions. That's an 
interesting debate I'd be glad to have with Senator Warren 
sometime.
    Let me just express, on State support for public 
institutions, I have a little--I've been around long enough to 
have a strong opinion about that. The reason why State aid has 
gone down to public universities, the principal reason is 
because of us, the Federal Government and its rising health 
care costs and its imposition of mandatory Medicaid rules and a 
requirement that States maintain their level of spending on 
Medicaid during a time like 2008 through 2013 when revenues 
were going down.
    Rather than, in the 1980s when Tennessee was paying 70 
percent of the cost of its students' education, Medicaid 
spending in Tennessee was 8 percent. Today it's 30 percent, and 
the dollars have come right out of the University of Tennessee 
and the other public institutions.
    It's our fault that State support is down because we don't 
give States enough flexibility, but that's a different debate.
    Who wrote this report? If you don't mind me telling you, I 
was reading a little bit about the Constitution the other day, 
and after they had their debates they would appoint a committee 
on style to put it in plain English, and I think we would agree 
they did a pretty good job with the U.S. Constitution.
    This is in plain English, declarative sentences, can 
actually be understood. It reminds me of ``A Nation At Risk,'' 
when one of the Nobel Prize winners, I forget who it was, from 
the University of California actually took the report home and 
rewrote it and made it a compelling document. Do you mind----
    Mr. Kirwan. Not at all. The task force members had many 
opportunities to add their own rhetorical skills to the report, 
but it was the staff at ACE, led by Terry Hartle, here to my 
right, who did the bulk of the drafting of the report, subject 
to the edits of the task force members.
    The Chairman. Thank you. Thank you very much.
    Dr. Kirwan, both of you represent large campuses, big 
research universities, but you also were president of a system-
wide institution. Let's call it simplifying regulations. Is 
this unnecessary burden of regulations which costs more and 
suppresses innovation limited just to big universities, or is 
it a problem for your smaller campuses?
    Mr. Kirwan. Absolutely not. In fact, the University System 
of Maryland is in many ways a microcosm of higher education in 
America. We have three HBUs. We have five comprehensive 
institutions, three research universities, and an online 
university. We have it all, in a real sense.
    The regulatory burden has--different regulations have a 
different impact on different institutions. The overall 
excessive burden is felt by all of the institutions in the 
system. It affects the smaller institutions as well as the 
larger ones.
    The Chairman. Chancellor Zeppos, you were an administrative 
lawyer at one point before you went to Vanderbilt. One of the 
things that startles me is that there is, every workday on 
average, one new ``dear colleague'' sub-regulatory guidance 
letter or admonition from the U.S. Department of Education to 
our 6,000 colleges and universities about something else they 
should do.
    We had testimony from one witness here from the Department 
of Education who said--and I questioned everybody specifically 
about this--that the guidance that she provides to universities 
is a matter of law. I asked her, who elected you to anything? 
Because we make the law. I don't remember my administrative law 
course too well, but a guidance, a letter ought to be to 
interpret the law and wouldn't have the force of law.
    I notice in your report that you recommend that if there is 
to be a guidance, that there be a public comment period, to go 
through the same process that we have with a regulation.
    Would you comment on the appropriate way for the Department 
to issue regulations and to issue guidances or other letters 
that would appear to suddenly be having the force of law and 
all of the implications that large and small universities that 
might have?
    Mr. Zeppos. Yes. It's oftentimes welcome. It's useful to 
get guidance from administrative agencies. The SEC, the IRS is 
giving private letter rulings, no action letters. Those things 
are useful to educate the regulated community, but those do not 
have the force and effect of law. They're guidance, and if the 
agency really expects to have substantive obligations that 
carry the force and effect of law, they really ought to elevate 
it more to a formal regulation without getting too technical, 
and maybe one interpretation off the regulation as opposed to 
one, two, and a thousand.
    I won't get into the constitutional law part because that's 
the first 5 weeks of the semester, but John Locke said 
legislators can create legislation, but they can't create 
legislators. We have to recognize that this body is going to 
adopt the law, they're going to adopt regulations, and then 
when we get to the question of guidance, I would say useful but 
not binding.
    The Chairman. Thanks very much.
    Senator Murray.
    Senator Murray. Well, thank you, Mr. Chairman. Before I ask 
my questions, just a counterpoint on the fact of why colleges 
have lost so much State funding. If we all remember, the 
economy collapsed about 6 years ago, and revenue to States 
collapsed with that as a result of what happened on Wall 
Street. Because the revenue to our States dropped so much, a 
lot of our States did cut back our education funding, which 
created a real problem for universities, and students now are 
having to make up more of their costs. Just a little 
counterpoint for you.
    The Chairman. That's fair enough.
    Senator Murray. Dr. Kirwan, I know that Maryland has been 
doing some innovative work in allowing students to take some 
courses online and structure their schedules flexibly. Both of 
you sort of mentioned this in your remarks. If the State 
authorization rules that the report talks about haven't hit the 
right mark, how do you think we should make sure that our 
students are guaranteed high-quality programs in this digital 
era?
    Mr. Kirwan. Well, I think that any institution offering 
distance education has to be authorized within the State where 
it operates.
    Senator Murray. Right, you mentioned that in your opening 
remarks.
    Mr. Kirwan. Right. That, to me, that's the obligation of 
that State to ensure that the institution is providing sound 
and appropriate education that can be shared with students in 
other States.
    Senator Murray. Mr. Zeppos.
    Mr. Zeppos. Yes. The question of States putting up barriers 
to entrants from other States is not a new one in America. If 
we can get a system that a university is authorized in a State 
and there are standards set in that State, or that universities 
are already recruiting students from that State, which we all 
are, maybe that creates a presumption or a kind of you're 
already here recruiting our students, we believe you enough 
that you can continue to offer education in some form.
    The second thing is you could come up with--the Department 
could have come up with some sort of effort if it wanted to go 
this way to create--like they do maybe in some of the 
interstate trucking industries where you've got a sticker in 
one State, it covers you in another State or something, a 
reciprocity program, Senator.
    Senator Murray. How would you have sort of oversight of 
that, so that there would be some sort of standard that we all 
knew existed?
    Mr. Zeppos. Well, first of all, I would look at the 
standards set in each State and recognize that those standards 
are already being accepted.
    Senator Murray. In some States, but some States could set 
really low standards. How would you make sure that you had some 
kind of quality outcome?
    Mr. Zeppos. There would be a threshold that they would have 
to meet to get title 4 funding to be authorized in some way to 
do business as a college.
    Senator Murray. We would have to set that at the Federal 
level.
    Mr. Zeppos. That's the trick now, that they're taking that 
authorization that we get in general and taking it around the 
country and saying now you have to do it in every State. A 
minimum Federal standard is already there, are you authorized. 
If you are, then you're eligible for the funding. We would ask 
why isn't that good enough to do business in this national 
economy if you're already authorizing us to do business under 
the program?
    Senator Murray. All right. Let me ask one other question in 
my last minute, and I'll ask you, Mr. Zeppos. As you know, most 
Federal student aid is provided directly to students through 
colleges and universities, and the task force supports an 
accountable use of taxpayer dollars, but it also raises some 
questions about how much it costs your institutions to verify 
those Federal student aid funds are actually flowing to the 
right recipients.
    How can the Federal Government make sure that the students 
who need the most help are actually getting it?
    Mr. Zeppos. This whole question of verification of funding 
that the students who participate in it would kind of start 
with kind of a basic blank slate to say we are providing this 
aid, who is getting this aid, for what purpose are we getting 
this aid. Currently, the verification is kind of a roundabout 
where the Department asks us to get information from the 
parents. Sometimes the parents aren't even involved.
    What we're kind of suggesting is--and this may be asking 
too much, but isn't there a way to sync some of the IRS 
materials, and you'd basically disintermediate us and you'd 
deal directly--the Department would deal directly with the 
student and say we're going to get information from the IRS. We 
can verify this information as accurate tax information, and 
could we just connect you together, rather than we feel like 
we're the ones collecting the information that a lot of times 
is IRS information. Maybe that could be more directly put into 
the system, Senator.
    Senator Murray. All right. I have several other questions, 
but I'll submit them for the record.
    The Chairman. Do you want to go ahead?
    Senator Murray. No, that's all right. It's fine.
    The Chairman. Just to clarify, isn't it true that if we 
adopted the recommendation that you go back 2 years to find 
out--let's say a student who is in her junior year would fill 
out the FAFSA form and however many questions end up on it and 
would find out that year how much grant or loans she might be 
eligible for, which has a lot of benefit in and of itself, so 
you can go shopping knowing what you've got. You then wouldn't 
have most of these verification problems because you would ask 
the family for permission to use the IRS figures for their 
income from 2 years ago, and you're suggesting that would be 
the evidence that the family was eligible for a certain level 
of aid. Am I correct?
    Mr. Zeppos. Exactly, Chairman.
    The Chairman. That seemed to me, in listening, that we've 
got some work to do. We want to make sure that the money--it's 
a lot of money--goes to the right people.
    Mr. Zeppos. Right, exactly.
    The Chairman. The testimony we had before our committee was 
that we could get most of that with a couple of questions.
    Unless Senator Murray had other comments or questions?
    Senator Murray. No. I really thank you for this hearing. It 
was really excellent, and I know we have a lot more work to do. 
I appreciate the bipartisan effort you're moving forward with.
    We've got to make sure, however, that our families get 
accurate consumer information. College has to be more 
affordable. We all agree on that. We need to make sure our 
students have a safe learning environment and we have good 
accountability, no small task in front of us, but it's 
important that we take this on.
    The Chairman. That's a good summary upon which I think we 
can agree.
    When we started out with this, what I had hoped--you've 
done a better job than even I had hoped might be done here, 
because my hope was that this would not be seen as any sort of 
partisan or axe-to-grind sort of investigation. It's just human 
nature that if you reauthorize the Higher Education Act eight 
times since 1965, then well-meaning Senators and Congressmen 
and well-meaning secretaries--I was a well-meaning secretary--
and well-meaning assistants add their good ideas over that 
period of time and nobody weeds the garden, it just gets to be 
a big mess. That is what we have, in many ways.
    It's just good governing to say let's take some things and 
start from scratch and just come up with a plain, simple, clean 
way to deal with the question of a student who withdraws from 
college without costing a lot of money that could otherwise be 
used to reduce tuition, add to financial aid, or pay a faculty 
member more. The fact that you've come up with 59 specific 
proposals is a huge help.
    I'm delighted with the bipartisan support for this. I'm 
delighted with Secretary Duncan's attitude toward it, because 
the Department itself can do something. I look forward to 
working with you in terms of how we make this a continuous 
process, and Senator Murray and I will sit down in a few weeks 
and we'll talk about how do we take this advice and incorporate 
it into a bipartisan process as we begin to work toward the 
reauthorization of the Higher Education Act.
    Our thanks to you for your volunteer time and your effort 
and a terrific report.
    The hearing record will remain open for 10 days to submit 
additional comments and any questions for the record Senators 
may have.
    The next HELP hearing on medical and public health 
preparedness and response, ``Are We Ready for Future Threats?'' 
will occur on Thursday at 10 a.m. in Dirksen 430.
    Thank you for being here.
    The committee will stand adjourned.
    (Additional Material follows.]

                          ADDITIONAL MATERIAL

Prepared Statement of the National Task Force on Violence Against Women
    The National Task Force to End Sexual and Domestic Violence Against 
Women (NTF) represents a large and diverse group of national, tribal, 
State, territorial, and local organizations, as well as individuals, 
committed to securing an end to violence against women. Included are 
civil rights organizations, labor unions, advocates for children and 
youth, anti--poverty groups, immigrant and refugee rights 
organizations, women's rights leaders, education groups, and others 
focusing on a wide range of social, economic, and racial justice 
issues.
    The National Task Force on Violence Against Women commends the Task 
Force on Federal Regulation of Higher Education (``the Task Force'') 
for its review of Federal regulations affecting post secondary 
education. We are alarmed, however, that the Task Force's report 
suggests that current Federal regulations and policies governing the 
response of IHEs to crimes predominately affecting women students are 
too burdensome or complex.
    First, we cannot stress enough that now is not the time to lessen 
Federal oversight designed to protect students from violence. Recent 
efforts by Congress, the White House, and the Department of Education 
to address sexual assault are beginning to show results. Many schools 
are working to improve their prevention and response programs.
    These Federal efforts are a response to crimes that are pervasive 
on college campuses: one study of students at two large public 
universities found that 1 in 5 had been sexually assaulted by their 
senior year in college. This data is sadly consistent with other 
studies over a 20-year period. Dating violence is common among young 
people between the ages of 18-24, and young women ages 18-19 face the 
highest rates of stalking in the Nation. These violent acts and the 
associated trauma can negatively affect on the ability of young women 
and male survivors to complete their college education.
    We also strongly oppose the Task Force recommendation to change the 
definitions used by schools to collect data on domestic violence, 
dating violence, and stalking. These definitions are not new, but 
instead were included in the Violence Against Women Act as reauthorized 
by Congress in 2013. To our knowledge, the Task Force did not consult 
with VAWA experts before recommending that these important definitions 
be abandoned.
    Additionally, the report criticizes the 2011 Dear Colleague Letter 
and subsequent guidance clarifying the responsibility of IHEs to 
respond to and prevent sexual assault as being too complex for schools 
to understand. Yet, students who have experienced sexual assault and 
advocates working on college campuses have noted the effectiveness of 
these policies in improving the response of IHEs to sexual assault, 
including the provision of remedies that make campuses and students 
safer, and make it possible for students to pursue their higher 
education goals in an atmosphere that is free of harassment and/or 
violence.
    We concur with the Task Force that steps can be taken to streamline 
overlapping Federal laws and requirements, but such recommendations 
must be informed by a commitment to both student safety and gender 
equity in education.
                                 ______
                                 
                     University System of Maryland,
                                  Office of the Chancellor,
                                         Adelphi, MD 20783.
                                                    March 30, 2015.

Hon. Lamar Alexander, Chairman,
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
428 Dirksen Senate Office Building,
Washington, DC 20510.

    Dear Chairman Alexander: Thank you again for the opportunity to 
testify with Vanderbilt University Chancellor Nick Zeppos before the 
Senate Health, Education, Labor, and Pensions Committee on February 24, 
2015 to discuss the recommendations of the Task Force on Government 
Regulation of Higher Education. It was a privilege and an honor to 
share with you and the committee our task force's recommendations on 
ways to improve the regulatory environment, ensure transparency and 
accountability of public dollars and provide students and families with 
the information they need to make informed decisions about 
postsecondary education.
    I am pleased to offer the responses below to the additional 
questions posed to me by Senator Michael Enzi and Senator Al Franken on 
March 16, 2015.
    If you have any additional questions or need anything further, 
please do not hesitate to contact me or Patrick Hogan, USM Vice 
Chancellor for Government Relations at [email protected] or (301) 445-
1927.
            Sincerely yours,
                                         William E. Kirwan,
                                                        Chancellor.
                                 ______
                                 
      Response by William E. Kirwan to Questions of Senator Enzi 
                          and Senator Franken
                              senator enzi
    The Report of the Task Force on Federal Regulation of Higher 
Education provides important and useful information about the burden on 
colleges and universities of specific regulations promulgated by the 
Department of Education, and it cites several pertinent studies 
addressing aspects of that cost burden.
    Question 1. Did the Task Force attempt to obtain a reasonably 
accurate estimate of the global compliance burden of all Federal 
regulations (and sub-regulatory guidance) on the college and university 
community? If so, please describe what efforts the Task Force 
undertook, and the specific findings.
    Answer 1. Our charge and responsibility was to look at Federal 
statutory provisions and Department of Education Regulations that 
impacted and hindered the effective and efficient delivery of higher 
education. The Task Force conducted a thorough environmental scan of 
all available research looking for estimates or useful methodologies 
for determining the compliance burden of all Federal regulations across 
all colleges and universities. Despite these efforts, we were unable to 
find any study that quantified institutional compliance costs across 
all Federal agencies and across all institutions. The Task Force report 
cites efforts to quantify the costs of Federal regulation for three 
specific institutions: Stanford University, Hartwick College and 
Vanderbilt University. In addition, several Task Force members have 
accepted Chancellor Zeppos' offer to have BCG visit their campus to 
perform ``shallow dive'' estimates of the regulatory costs on their 
campuses using the same methodology employed at Vanderbilt. While these 
efforts are ongoing, we expect they will be useful in developing better 
cost estimates going forward.

    Question 2. What followup work would you recommend be done in order 
for the committee to obtain a reasonable estimate of this global 
compliance burden, and the associated expenditure made by colleges and 
universities.
    Answer 2. We are pleased that Congress has funded the National 
Academies of Sciences (NAS) study on the costs of Federal regulation 
contained in HEOA. While the Task Force's effort focused on regulations 
stemming from the Department of Education, the NAS study will take an 
in-depth look at the costs associated research-related regulations. We 
believe this study will provide crucial additional information for 
lawmakers about the costs of Federal regulation related to research. 
The Task Force report also calls on the Department of Education to 
provide better, more accurate estimates of the burden associated with 
its regulations. Greater transparency is needed about the method by 
which the Department makes its estimates. The Department should also be 
required to consult with campus officials representing a broad range of 
institutions in developing these estimates. Compliance costs 
necessarily vary from institution to institution, based on sector, 
size, and mission. For example, a small private institution may not 
have economies of scale or the IT systems of a large public institution 
when implementing a given regulation.
                            senator franken
    Chancellor Kirwan, many students and families do not have a clear 
picture of how much college is going to cost them. Some schools' 
financial aid letters do not distinguish between loans and grants. I 
have a bipartisan bill that would require universities to use a uniform 
financial aid award letter so that students and their families will 
know exactly how much college will cost them.
    The Department of Education has created a standardized financial 
aid award letter template, and approximately 2,000 institutions have 
voluntarily adopted it, including 5 of your University of Maryland 
campuses.
    Question 1. Do you think a uniform award letter makes it easier for 
parents and students to fully understand the cost of college?
    Answer 1. The University System of Maryland (USM) Institutions have 
adopted the voluntary standardized financial aid award letter, which is 
also required under Maryland law. Our institutions have also 
implemented the Net Price Calculator on our institutions' Web sites. I 
feel that we are very transparent and clear about the true cost of 
education for our students. Our institutions have also significantly 
increased their institutional need-based financial aid awards while at 
the same time over the last 8 years having the lowest tuition increases 
in the Nation amounting to a cumulative 12 percent. We have gone to 
great lengths in Maryland to increase affordability and accessibility 
for our students, being recognized with five universities ranked as 
best values in the Nation. One of the major difficulties for students, 
parents and institutions is that students most often apply for 
admission by November1st in their senior year in high school while 
FAFSA forms are due by March 1 and until a determination is made 
regarding their Federal and State financial aid packages it is not 
known what institutional aid they are eligible for.

    Question 2. Yet your Task Force has been critical of the 
standardized award letter. Why?
    Answer 2. The Task Force did not make any recommendations regarding 
the Standardized Award Letter, which was outside its scope for a number 
of reasons, including, most importantly, the fact that there is not 
Federal statute or regulation mandating its use. The report does 
mention the Shopping Sheet as an example of one of the many pieces of 
information and consumer disclosures that institutions are required to 
provide to students.
    As a general matter, the Task Force members strongly support 
efforts to ensure that students and their families have the information 
they need to make good college decisions. At the same time, providing 
too much or the wrong information, or providing it in a confusing 
manner, can undermine these efforts. The Task Force strongly supported 
increased use of focus group testing to make sure that required 
consumer disclosures are providing the type of information that 
students and families want and need, and in a manner that is easy to 
understand.
    It is our understanding that ED intends to continue to refine its 
model award letter in an effort to address the concerns that exist for 
some institutions. A model financial aid award notification letter--
with standardized terminology, required elements, etc.--can be a 
helpful tool for parents and students comparing aid awards. However, 
some feel that the current model could be improved and made more 
flexible so as to provide better, clearer information to students and 
families.

                             Vanderbilt University,
                          Office of the Chancellor,
                                        Nashville, TN 27240
                                                    March 30, 2015.
Hon. Lamar Alexander, Chairman,
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
428 Dirksen Senate Office Building,
Washington, DC 20510.
    Dear Chairman Alexander: Thank you again for the opportunity to 
testify with Chancellor Brit Kirwan before the Senate Health, 
Education, Labor, and Pensions Committee on February 24 to discuss the 
recommendations of the Task Force on Government Regulation of Higher 
Education. It was a privilege and an honor to share with you and the 
committee our Task Force's recommendations on ways to improve the 
regulatory environment, ensure transparency and accountability of 
public dollars and provide students and families with the information 
they need to make informed decisions about postsecondary education.
    I am pleased to offer the responses below to the additional 
questions posed to me by Senator Michael Enzi.
    If you have any additional questions or need anything further, 
please do not hesitate to contact me or Christina West, Assistant Vice 
Chancellor for Federal Relations ([email protected] or 
202-216-4370).
            Sincerely,
                                        Nicholas S. Zeppos,
                                                        Chancellor.
                                 ______
                                 
      Response to Questions of Senator Enzi by Nicholas S. Zeppos
    The Report of the Task Force on Federal Regulation of Higher 
Education provides important and useful information about the burden on 
colleges and universities of specific regulations promulgated by the 
Department of Education, and it cites several pertinent studies 
addressing aspects of that cost burden.
    Question 1. Did the Task Force attempt to obtain a reasonably 
accurate estimate of the global compliance burden of all Federal 
regulations (and sub-regulatory guidance) on the college and university 
community? If so, please describe what efforts the Task Force 
undertook, and the specific findings.
    Answer 1. The Task Force conducted a thorough environmental scan of 
all available research looking for estimates or useful methodologies 
for determining the compliance burden of all Federal regulations across 
all colleges and universities. Despite these efforts, we were unable to 
find any study that quantified institutional compliance costs across 
all Federal agencies and across all institutions. The Task Force report 
cites efforts to quantify the costs of Federal regulation for three 
specific institutions: Stanford University, Hartwick College and 
Vanderbilt University.
    At Vanderbilt, we also did our own analysis to try and obtain an 
accurate rendering of the Federal regulatory compliance burden for a 
sample university. We commissioned the Boston Consulting Group (BCG), a 
leading global management consulting firm, to conduct a deep-dive to 
estimate the cost of Federal regulatory compliance at Vanderbilt, 
excluding our Medical Center. The company performed a thorough review, 
gathering cost data via surveys, interviews, and payroll and headcount 
data to estimate that Vanderbilt spent about $146 million, or 11 
percent of the non-clinical budget, on Federal compliance in fiscal 
year 2014. Of that total, approximately $14 million was spent on Dept. 
of Education-related compliance.
    BCG has continued work in this area by leveraging the methodology 
developed at Vanderbilt and is in process of estimating the compliance 
burden at approximately 10 additional institutions that reflect the 
diversity of the sector (e.g., large State flagships, a private for-
profit school, small private institutions, a community college, etc.). 
This effort is ongoing at this time, and we hope to have additional 
findings to share later this spring. Our hope is that these efforts 
will be useful in developing better cost estimates going forward and 
will be helpful as the committee works through reauthorization of the 
Higher Education Act.

    Question 2. What followup work would you recommend be done in order 
for the committee to obtain a reasonable estimate of this global 
compliance burden, and the associated expenditure made by colleges and 
universities.
    Answer 2. As the leader of a major research university and academic 
medical center, I know first-hand that the global compliance burden 
extends far beyond the scope of this Task Force. As our work with BCG 
demonstrated, our largest Federal compliance burden stems primarily 
from our research activities and engagement with Federal research 
agencies such as the National Institutes of Health and National Science 
Foundation.
    To that end, I am pleased that Congress funded the National 
Academies of Science (NAS) study on the costs of Federal regulation to 
colleges and universities. Although funding for this study was included 
in the fiscal year 2014 Omnibus Appropriations Act, it was originally 
called for by this committee in the 2008 Higher Education Opportunity 
Act. While the Task Force's effort focused on regulations stemming from 
the Department of Education, the NAS study will take an in-depth look 
at the costs associated with research-related regulations. I believe 
this study will provide crucial additional information for lawmakers 
about the costs of Federal regulation related to research.
    Beyond the NAS, there are a number of analysts and organizations 
attempting to estimate this global compliance burden, and the committee 
would do well to draw on their expertise. A year ago, the National 
Science Board of the National Science Foundation released a report, 
Reducing Investigators' Administrative Workload for Federally Funded 
Research. This report,

        ``describes a number of policy actions aimed at modifying and 
        streamlining inefficient requirements while retaining necessary 
        oversight of federally funded research.''

    Most recently, a joint effort launched by the Association of 
American Universities, Council on Governmental Relations and the 
Association of Public and Land-grant Universities is gathering inputs 
from a variety of institutions in the areas of research-related 
compliance. This effort, currently underway, is seeking to assess 
research regulatory burden among member institutions and to recommend 
specific changes to reduce compliance effort and expense.
    Beyond that, the effort we are currently undertaking with the 
Boston Consulting Group to look at the Federal regulatory compliance 
costs at approximately 10 additional institutions may serve as a useful 
barometer for the compliance costs and expenditures at a range of 
different institution types. Again, we expect to have findings from 
that effort available later this spring.
    The Task Force report also calls on the Department of Education to 
provide better, more accurate estimates of the burden associated with 
its regulations. Greater transparency is needed about the method by 
which the Department makes its estimates. The Department should also be 
required to consult with campus officials representing a broad range of 
institutions in developing these estimates. Compliance costs 
necessarily vary from institution to institution, based on sector, 
size, and mission. For example, a small private institution may not 
have economies of scale or the IT systems of a large public institution 
when implementing a given regulation.

    [Whereupon, at 11:36 a.m., the hearing was adjourned.]

                                   [all]
```