U.S. DEPARTMENT OF EDUCATION 

OFFICE OF POSTSECONDARY EDUCATION 

PUBLIC REGIONAL HEARING ON 

NEGOTIATED RULEMAKING 

Wednesday, October 15, 2008 

9:00 a.m. – 3:02 p.m. 

Cuyahoga Community College 

Corporate College 

East 4400 Richmond Road 

Warrensville Heights, Ohio 
 

P R O C E E D I N G S 

MR. MADZELAN: Good morning, everyone. Welcome to this sixth and final 

hearing that we have scheduled and we have had here at the Department of 

Education here to get information from the community, you people, about what 

we need to do in terms of regulatory activity, a regulatory agenda, to 

implement the reauthorization of the Higher Education Opportunity Act. 

The first thing I want to do, though, is thank Claire Rosacco and her 

team here at Cuyahoga for agreeing to host this event and providing us with 

what I'd have to say is kind of an "ace-one" meeting space here. As I 

mentioned, this is the sixth in our series of hearings. We published a notice 

back in the first part of September in the Federal Register announcing these 

meetings, indicating the requirements, essentially, that we have under the 

Higher Education Act which is to engage in a process of rulemaking by 

negotiation for the programs authorized by Title IV of the Higher Ed Act, 

which are the student financial assistance programs. 

Part of our charge--as part of this negotiated rulemaking process is to 

gather information from affected parties, interested parties, regulated 

parties, which, of course, for us in this area are students, colleges, 

universities, other postsecondary education providers, lenders, banks, 

guarantee agencies, servicers for the loan program, et cetera. And again, 

that is the purpose of these hearings, is to gather that kind of information, 

and what the affected community thinks the Department ought to pursue in a 

rulemaking process. When--as I mentioned, this is the last of our series over 

the next few weeks. We have already begun to assemble that which we have 

heard, at the staff level. We will develop a series of recommendations for 

consideration by our policy officials. That's going to take us another couple 

of weeks, and that's going to take us into the first part of November. 

Our plan--you're looking at a couple of people up here that are career 

employees. You know, we're going to continue doing this, irrespective of our 

leadership. The question is, at what time will we do that? Again, we have a 

plan to move forward with this process this fall and winter. But that could 

change within the next couple of weeks. We have, again--those that you see 

before you today, we've been through a number of these transition periods, 

and sometimes they are pretty smooth, and for us, in the Education 

Department, and sometimes a little bit less so. 

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So, at any rate, we have a process in mind, and--which we will pursue, 

unless our political officers ask us to hold off for a while. If we hold off 

for a while, basically, it means a two-month delay in the process, and we are 

still nonetheless faced with other statutory deadlines around promulgating 

final rules, a master calendar, and that sort of thing. Joining me here today 

from the Department, my colleague Gail McLarnon, from the Office of 

Postsecondary Education. And also helping out now standing at attention in 

the back of the room is Marty Guthrie, also from the Office of Postsecondary 

Education. So, these--I guess the last thing--well, next to last thing that I 

want to mention, is that this--our hearing today is being webcast live by the 

college here. So, I hope that does not mean that some people who have signed 

up to speak will now choose not to speak. But again, just so you are aware of 

that fact. 

We do have, as you know, the sign-up sheet in the back of the room. We 

will go in the order that you have signed up. You should be aware that, even 

though we have these ten-minute intervals, it has been our experience that 

not everyone uses the full ten minutes. So, we'll--the morning may sort of 

speed up a little bit. We do have a break scheduled at 10:30, I believe, and 

then break for lunch at noon. Again, those are not hard and fast. We're going 

to try and be as flexible as we can, because we are primarily interested in 

what you people, the community, has to say. We are really not here to answer 

questions. That doesn't mean we won't answer questions, but primarily we are 

in listening mode here. We want to hear what you have to say, what you think 

is important, and what you think we need to do over the next several months 

in terms of producing a--beginning a regulatory process with an eye towards 

publishing a final rule next November 1st--next, next November 1st, November 

1, 2009. So, with that, I will ask my colleague Gail if she has anything to 

add or... 

MS. McLARNON: Just another big thank you to Claire Rosacco and Cuyahoga 

Community College staff for such lovely accommodations. We're not really used 

to this high-tech setting and we're very appreciative. We're very, also, 

appreciative of the turnout here today. We're almost approaching what looks 

like a full schedule, and that's wonderful because, as Danny said, it's very 

important for us to hear what the community has to say. It informs our 

rulemaking process to a great degree, and Danny and I have been through lots 

of rulemakings together. 

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And so, again, I would like to welcome all of you. Thank you for coming 

and thank the Cuyahoga Community College staff for putting together such a 

wonderful facility for us. 

MR. MADZELAN: So, we will start this morning with Nancy Hoover. And 

Nancy, if you and others who follow you can, when you get to the podium, 

again, state your name for the record and where you're from, who you 

represent. And also, it will be inevitable that we will butcher someone's 

name. I'm a little bit used to that, but please correct us when you come to 

the podium. 

MS. HOOVER: Thank you. I'm Nancy Hoover. I'm the Director of Financial 

Aid at Denison University, a private liberal arts college here in Ohio. 

I'm also representing the National Direct Student Loan Coalition, which 

is, as I indicated in my statement--is a grassroots organization that 

supports the Direct Loan Program. First of all, I want to express my 

appreciation to the Secretary for the opportunity to present comments to the 

Department of Education on several points of concern with the Higher 

Education Opportunity Act. 

It is crucial that practicing financial aid professionals be allowed to 

provide input on legislation that can both provide or hinder our students 

from having access to a college degree. As I indicated in my opening 

statement, I am the Director of Financial Aid at Denison University. And 

today, though, I will be speaking on behalf of the National Direct Student 

Loan Coalition. This is a grassroots organization that represents over 1,300 

schools throughout the Nation that participate in the Federal Direct Loan 

Program. The mission of the Coalition is to ensure the success of the Federal 

Direct Student Loan Program by promoting its benefits for students, families, 

taxpayers, and institutions. The National Direct Loan Student Coalition is 

comprised of practicing financial aid administrators from all types of 

colleges and universities. Therefore, this testimony will address several 

areas of concern in the Higher Education Opportunity Act that are beyond the 

student loan area. It is crucial that you hear thoughtful commentary from 

administrators at all types of schools who can offer recommendations for 

crafting of the final rules that ensure program integrity without preventing 

access for students to all sources of funding for their college education. 

The areas of concern that I wish to address: 

Point one, in the Federal Direct Student Loan Program, the new 

provisions introduced by HEOA that require DL schools and the DL servicer to 

comply with each requirement listed under Section 433 of the HEA that apply 

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to the FFELP lender. The Coalition clearly supports all of the disclosures 

that are required for student loans in both the DL Program and FFEL Program. 

The Coalition encourages the Department to adhere to the conferees' intent 

that loan servicers can maintain their current organizational structure of 

providing to students the disclosures that are in compliance with these new 

requirements. 

Point two, new institutional disclosures on cost of tuition and fees. 

The model that the Department creates for schools to provide transparencies 

of cost in net price must be based on thoughtful consideration of comments 

from college administrators from all areas of institutions who are involved 

in developing the institution's pricing structure for tuition and fees. Any 

instrument developed to calculate the net price of college cost must 

incorporate the fact that universities do not utilize any uniform methodology 

or policy to award their respective institutional, need-based, and merit 

award aid in addition to the federal and state sources of aid. 

Point three, additional new disclosures required by schools to current 

and prospective students. To effectively and efficiently collect all of the 

required disclosures, current and new, from schools the Department needs to 

develop a standard data collection instrument with an industry-standard file 

format that is compatible with the respective administrative computer systems 

currently used by colleges. The disclosure requirements could be created from 

data within the school's respective systems, and exported from the schools to 

a data warehouse, similar to the common origination and disbursement system 

that is used by all schools that process federal aid. If the required 

disclosure information was collected in a standardized format, it could be 

programmed to update more efficiently the websites to provide public consumer 

information about colleges and universities. This project should have at 

least three years to be developed to streamline and standardize this massive 

data collection for both the Department of Education and the universities. 

Point four, private student loans. Thorough negotiation is crucial to 

develop for students of private loan disclosure process that is not confusing 

and cumbersome. The final rules must provide schools flexibility in 

generating and providing the new disclosure form to students who are applying 

for private loans. The intent of this process must always focus on informing 

students about their eligibility for other aid rather than become an obstacle 

in the application process because of possible processing delays. 

Thank you again for the opportunity to provide comments on the Higher 

Education Opportunity Act at today's hearing at Cuyahoga Community College on 

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behalf of the National Direct Student Loan Coalition. Our organization is 

committed to helping students have access to affordable college degrees. The 

Coalition looks forward to working with the Department to finalize the best 

rules and regulations for all of the federal financial aid programs so that 

students will not be thwarted in their efforts to achieve their dream of a 

college degree. 

Thank you. 

MS. McLARNON: Thank you. 

MR. MADZELAN: Thank you, Nancy. 

Just to follow up one moment on my initial remarks, I should also 

mention, since Nancy has indicated her organization's willingness to help us 

out here, we think that we will have in this negotiated rulemaking process 

probably four separate committees, and that means we need a lot of nonfederal negotiators to help us out. So, again, at some point this fall, we 

will publish another Federal Register Notice laying out sort of a more formal 

approach or a better structure of what we're thinking in terms of process, as 

well as solicitation of nominations for non-federal negotiators. So again, I 

hope that you and all of your friends and colleagues will give some thought 

to helping us out and volunteer to be non-federal negotiators. 

Our next speaker is Greg Shields. 

MR. SHIELDS: Good morning, ladies and gentlemen. My name is Greg 

Shields, Regional Director of Operations for National College, based in 

Roanoke, Virginia. On behalf of our approximately 10,000 students enrolled in 

24 campuses located in central southeastern United States, including four 

campuses located here in Ohio, it is my pleasure to have this opportunity to 

speak to you this morning. We applaud the Department's efforts, under 

Secretary Spelling's leadership to advance the Higher Education Act to bring 

meaningful reform to higher education in our country. This morning, I would 

like to briefly discuss two very important issues that are currently facing 

the career college sector: 90/10 and proposed revisions to the method in 

which cohort default rates are calculated. These are just two of the many 

very important issues currently facing our sector that are included in the 

Higher Education Act. 

Today, approximately 2.8 million college students are at risk unless 

immediate reforms to the 90/10 rules are enacted. This is a very difficult 

time for our students given the current economic climate and the continuing 

credit crisis that, in some instances, has brought the availability of credit 

to a grinding halt. 

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The elimination of numerous sources of private loans has created 

additional hardship for a number of our students who no longer have access to 

these lending sources. Many of our students must work to support their 

families while pursuing their dream of a college education. The reduction in 

access to these private loan sources has made it even more difficult for our 

sector to serve this population and placed greater pressure on our ability to 

meet the federal government's 90/10 tuition requirements. In the past, career 

colleges have been limited in the non-Title IV program's revenue that they 

can include in the 10 percent calculation. The HEA reform allows revenue from 

non-Title IV programs that have been approved by the state or an accrediting 

agency. Our programs offered here at our campuses in the State of Ohio do not 

require approval for each individual program, but rather these approvals are 

part of an overall institutional approval. We would prefer the Department 

adopt a rule that allows program revenues to be included, so long as such 

programs are considered part of an overall accreditation, or the programs do 

not otherwise require a specific state approval. 

The HEA allows institutions to include the net present value of loans 

they themselves make to students between July 1, 2008 and June 30, 2012 in 

the 10 percent calculation. The Department needs to realize that career 

colleges initiate multiple class starts throughout the year. For instance, 

National College has eight class starts during our academic year. If the 

Department were to require that our member schools disburse funds on a class 

start basis, this would create unnecessary delays and frustration for our 

students, not to mention higher costs for administering this regulation. We 

would recommend that our institutions be allowed to provide a single loan at 

the beginning of the students' academic year, with the loan itself spread out 

over the institution's fiscal year. Should institutions be allowed payment 

deferments until after graduation, such deferments should likewise be 

allowed. 

The second topic of importance that I would like to address today is 

the proposed revisions to the method in which cohort default rates are 

calculated. Career colleges, such as National College, provide an important 

role in educating a segment of our population that is underserved by 

traditional higher education. Many of our students tend to be firstgeneration college students. They work full-time to support their family and 

face numerous obstacles on a daily basis just to attend classes. 

Given time, I could share with you numerous stories of students that 

were able to overcome these obstacles in order to graduate with their degree 

7
and go on to start a successful career, not just another job. The law 

provides that, beginning with the Fiscal Year 2009 cohort default rates, the 

rates will be calculated for a three-year period, but it also provides that 

no sanctions may be imposed on an institution until three years of the threeyear cohort default rates have been published. In the interim, the Department 

will have to publish both two-year and three-year rates for the Fiscal Year 

2009 and Fiscal Year 2010. It will be important for institutions to be able 

to have access to the full range of appeals and corrections for both the twoyear and three-year rates for both of these years. I appreciate the 

opportunity to share my comments with you today. Thank you. 

MR. MADZELAN: Thank you, Greg. 

Jill Noble. 

MS. NOBLE: Good morning, and thank you for having me and giving me this 

opportunity to speak to you this morning. 

We had two previous speakers who spoke of financial information and the 

need based on our economy and other things, but I'm here today as a 

representative from the American Council of the Blind, which is a consumer 

organization in this country for blind and visually-impaired individuals, and 

this relates to accessibility of educational materials. So, what I wanted to 

say is, is that the financial part is important, but also another part of the 

Higher Education Opportunity Act is accessible textbook materials--or 

instructional materials, I should say. 

The American Council of the Blind would like to serve on the study 

commission as a member in order to provide their expertise in working with 

the language that should go into--become part of the legislation for 

accessible textbooks. They were very involved with the K-12 portion, which 

became a part of IDEA in 2004. They worked tirelessly with other blindness 

organizations and also with textbook publishers to come up with a 

standardized file format and repository for accessible textbooks and 

materials. And we would like to do this on the postsecondary education level. 

We have people who are very well versed in public policy as well as the 

technological background to provide their expertise on this commission. And 

we also have a great resource in our national affiliate, which is in the 

National Alliance of Blind Students. It's an affiliate of the American 

Council of the Blind, the national organization. And they also being 

primarily a group of college students could really assist with this part of 

the Higher Education Opportunity Act. 

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So, not only is there the financial part of this but there's also the 

part of actually having accessibility to educational materials. And it's--

like I said, it's a very important issue. 

So, thank you very much for your time. 

MR. MADZELAN: Thank you. One question, Jill. Since we're--the folks 

here from the Department, we're college, university, postsecondary education 

types, and we know a little bit about IDEA because there's-- 

MS. NOBLE: Right. 

MR. MADZELAN: From time to time, the Higher Education Act and 

individuals in the IDEA touch each other. But I'm hearing from your testimony 

that, because of the work that you've done previously on the K-12 level, you 

think that a lot of that work would easily translate into--for discussion by, 

what I'm guessing, for you, would be a new audience here in postsecondary 

education. 

MS. NOBLE: Yes, definitely. Well, and I--I mean, just from my own 

personal experience, there's a lot of differences in K-12 materials. We all 

know--a lot of us who have gone to college or are in college actually have--

know the expense of textbooks and how quickly they change, and the publishers 

come out with a new edition, things like that. It's a little bit different 

than the K through 12 portion, because the books, once they're produced or 

whatever, in a certain format--let's say, for example, a Braille book in 

elementary school can be used for several years before a new edition or a 

change comes about. In college, it's a lot different, and in college, there's 

a lot of subject material that is difficult to put in certain formats. But I 

think the whole idea of the file format being consistent and also the 

repository would really apply to this particular--to postsecondary education. 

And there are a lot of materials, and especially with college textbooks 

because they're quite large, the materials would be--for example, a Braille 

chemistry book in college would be very difficult produce, but supplementary 

materials and other things like that would be a possibility. But 

standardization--I heard Nancy speak about that as far as providing 

information to students, websites being updated and a repository. And so, 

here, once again, we're repeating that in standardization of formats and a 

repository for accessible instructional materials as well. 

MR. MADZELAN: Thank you. 

MS. NOBLE: Thank you. 

MR. MADZELAN: Our next speaker is Galen Graham. 

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MR. GRAHAM: Good morning. My name is Galen Graham, and I am a Regional 

Vice President and Columbus Metro President for DeVry University. Today, I 

come wearing many hats, representing, as I do, DeVry Incorporated, its 

schools, and all of its 80,000 students. On behalf of the university and its 

Keller Graduate School of Management, Chamberlain College of Nursing, Brost 

University, Apollo College, and the Western Career College, thanks for this 

opportunity to speak today. 

DeVry is focused on creating value for students, for its employees, and 

for society at large. This means addressing the unmet needs of society by 

providing high-quality student-centered, career-oriented opportunities to 

thousands of students every year. We have a long and proud history of 

producing graduates who are prepared, highly skilled, and ready to hit the 

ground running with careers that meet today's workforce needs. So, creating 

value, especially for our students and our graduates is intrinsic to our 

culture and certainly guides everything that we do. So, it is with a great 

honor that I represent our institutions today. We applaud the United States 

Congress for reauthorizing the Higher Education Act through the passage of 

the Higher Education Opportunity Act. 

DeVry is greatly encouraged by provisions that, among other things, 

enable dual enrollment at high school and college, that increase the maximum 

Pell Grant award while simultaneously providing for year-round Pell Grant 

eligibility, that expand professional judgment for financial aid 

administrators, that increased the annual and aggregate Perkins Loans limits, 

that reduce the number of payments required for rehabilitation of defaulted 

Perkins Loans, and that preserve Title IV eligibility for quality foreign 

medical schools, and expanded eligibility for market-funded foreign nursing 

schools. There's a good deal for us to be excited about, and we are an 

engaged participant in the negotiated rulemaking process. Our institutions at 

DeVry are diverse, much like higher education as a whole. We believe that 

this diversity is one of American higher education's great strengths. With 

this in mind, we encourage the Department to develop and refine regulations 

through community-wide involvement. We respectfully request the broad and 

diverse group of institutional representatives actively participate in the 

rulemaking process to discourage a one-size-fits-all approach. 

Given some of the complex issues that are involved in the negotiated 

rulemaking, like balancing the absolute need for transparency and full 

disclosure while being mindful of the demands of institutional day-to-day 

operations, we believe that diverse institutional participation is essential. 

10
I will be brief today since DeVry and its divisions have also submitted 

written testimony to the Department. I'd like to highlight just a few areas 

that are of special importance to us, namely year-round Pell, institutional 

loans, preferred lender lists, recourse loans, and retention rate 

disclosures. With respect to year-round Pell Grant, eligibility is essential 

for student access and affordability and positively impacting time to degree. 

We request that the Department give institutions the necessary flexibility to 

determine on a student-by-student basis which award year to use for crossover 

payment periods. Broad interpretation will provide the maximum benefit for 

these students. We are relieved by new provisions that treat select Stafford 

Loan distributions in excess of loan limits as non-Title IV revenue. However, 

because loans are divided into multiple disbursements across award years and 

vary according to academic progressions and other outside resources, many 

institutions are left in a quandary and unable to determine how to attribute 

the extra loan amounts. It's critical that schools be permitted flexibility 

to allocate funds on a student-by-student basis. 

With respect to preferred lender lists, many provisions in the Higher 

Education Opportunity Act require institutions to have at least three 

unaffiliated lenders on an institution's preferred lender list. However, some 

institutions may be unable to find three unaffiliated lenders or may have a 

preferred lender cease making loans. We submit that the Secretary 

specifically address this issue in future regulations. We also ask that 

forthcoming regulations identify what constitutes a preferred lender list, 

allow for institutions to add a third lender should one cease making loans, 

and enable an institution to provide lender information unassociated with 

their preferred lender list. With respect to recourse loans, new provisions 

in the bill prohibit select interactions between private lenders and 

institutions. The manager's statement noted that legislative intent was not 

to prohibit recourse loans so long as institutions do not provide improper 

quid pro quo to a lender. We urge the regulatory language not place any 

further restrictions on recourse loans, as these loans are pivotal in 

affording educational access to so many students across higher education. 

With respect to retention rate disclosures, public disclosures of 

first-time, first-generation student retention rates requires detailed 

attention concerning how the rates are calculated. Students who withdraw for 

reasons outside of an institution's control, including active military 

service, serious illness, or leave of absence, should be excluded form this 

calculation. 

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So, in conclusion, let me say that DeVry is looking forward to 

continuing to be a participant in this process. And on behalf our students 

and our institutions, I'd like to thank you for the opportunity to speak 

today. Thank you. 

MR. MADZELAN: Thank you. 

MS. McLARNON: Thanks. 

MR. MADZELAN: Ralonda Ellis-Hill and Louis Milo [sic.]. 

MR. NIRO: Good morning. I'm also delighted to be here this morning and 

I also have multiple hats. 

I am the Director of Educational Opportunity Program here at Cuyahoga 

Community College, but I'm also representing the state association known as 

the TRIO Association, also known as HAEOPP, or Higher Association of 

Educational Opportunity Program Personnel. That's a mouthful. That's why I 

developed an accent, by the way, because rambling all those acronyms--or 

because I've worked with TRIO for 35 years. A small story--I have to tell 

this story because it's interesting and has--I started at Cuyahoga Community 

College some 35 years ago, and within two or three years in the program, I 

received a call from Washington that I took on the program officer by the 

name of Linda Byrd-Johnson--was going to come and pay us a visit to review 

our programs. Well, I was very excited. Linda Byrd-Johnson was--this is the 

office of Cuyahoga Community College. So, I informed our institutions and we 

were prepared for this exciting visit. 

To our surprise, this talented, intelligent, young professionallylooking African-American lady comes to our door and Linda Byrd-Johnson--but 

the story is, the same Linda Byrd-Johnson today, that Linda Byrd-Johnson, 

happens to head the national TRIO programs. It's one of the largest 

discretionary programs within the Department of Education. So, we are 

delighted that she's heading this program and I had the opportunity to work 

with her. She did find--provide us with some technical assistance, then, and 

she also told us that we were in compliance. So, one of the main--I'm really 

out of this regulatory--by the way, welcome on behalf of the TRIO programs, 

welcome on behalf of Cuyahoga Community College. I'm just going to give you a 

very brief overview. As I've been here for more than 35 years, I think I have 

this somewhat clownish way of presenting things. 

And then my TRIO colleagues here will be presenting some specifics in 

relation to the negotiating rulemaking in relations to the new provisions 

within the regulations. 

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Again, I'm Louis Niro. I'm delighted to be here, and on behalf of the 

six TRIO programs here at Cuyahoga Community College--and we are serving more 

than 4,000 students at these institutions. And on behalf of the state TRIO 

association, I welcome you and thank you for this opportunity. The TRIO 

programs have been serving the Ohio's educational opportunity and throughout 

this country for over 40 years. And here at Cuyahoga Community College, we 

have had TRIO programs almost that long as well. Now, with the new 

legislation, we will be able to extend our services to a wider population. 

The provisions will make TRIO stronger, and we look forward to its 

implementations and to the final rulemaking hearings. 

Some of the specifics that have--in the new provisions--I think are 

very meaningful to us, and I'll be mentioning some of them, and my colleagues 

will be talking more about the specifics later. The--which one of the 

provisions extends the--all TRIO grants from four years to five years. We've 

been really advocating for those for a number of years. It also increases the 

minimum of TRIO grants to $200,000 per grant. It also, for the first time--

it's very important for Cuyahoga Community College, because we have multiple 

branch campuses, as many other institutions throughout this country will have 

an opportunity to apply for TRIO grants for each campus, and we look forward 

to the next competitions of the Student Support Services, which we can apply 

for each of the three campuses. It also allows TRIO grantees to target 

student populations with particular needs--and this has been done in the past 

but this is--gives us a greater emphasis, for example, for students with 

limited English proficiency. Also, with--there's a greater emphasis with 

disabled populations, disabled students. And for the first time, I think, 

this is going to be very challenging for you, but also the TRIO community, 

they have added the homeless and the foster youth to be served by TRIO. So, 

that's going to be a very interesting and challenging format--process. 

It also animates--it's especially important for me because I worked 

with veterans for a number of years. This also allows us to extend 

eligibility for veterans Upward Bound programs to include older veterans, and 

also for veterans who have served as reservists, and those who were called to 

action on or after September 11, 2001. There are many, many other provisions 

which I will not be able to go into, but some of my colleagues will talk to 

some of them. But I think once you go through this process, we hope that this 

will really improve the regulations and for us to implement within our 

applications and our daily activities at our institutions. 

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And this was a large segment of our county, our state, and our national 

community--will have the opportunity to become active, integrated, member of 

our economy. And that's really the ultimate goal, for them to become 

successful in their own lives. The new provisions will enable TRIO to better 

serve in a more comprehensive way our students. So, I wanted to thank you for 

this opportunity. And again, thank you for the time that you take and enjoy 

our campus and our weather that we have had in the past couple of weeks. 

MS. McLARNON: You're welcome. 

MS. ELLIS-HILL: Good morning. My name is Ralonda Ellis-Hill, and I 

currently work as an advisor at Cuyahoga Community College with the 

educational Talent Search Program. 

Currently, our program serves 1,250 students throughout Cleveland, 

Ohio. And today, I am here to make a request that--for two things, in fact. I 

wanted to first request that, looking at the amendments that are included in 

this Higher Education Act, I would like to request that there be a reduction 

in the minimum number of students that a program is required to serve from 

the 600 minimum as it is stated in the HEA. Also, I would like to request an 

increase in the number of students--cost per students in order to meet these 

new mandates, specifically looking at new requirements such as a mandate to 

provide high-quality academic tutoring services to our students. That is 

something difficult to accomplish on a budget of approximately $400 per 

student. 

Currently, we do have other programs that are able to accomplish this, 

such as our Upward Bound Program, but they are working on a budget of about 

$4,000 per student. So, for our program, it is--we are already stressed, 

having been level-funded for these past few years, and we are currently doing 

all we can to ensure that our students are important, but given the new 

mandates, I feel that these two requirements are essential. At this time, I 

have Ms. Amonica Davis, Director of our educational Talent Search Program who 

would like to add, too. 

MS. DAVIS: Thank you. As stated in Section 402(b)1(B)-- 

MR. MADZELAN: Excuse me. Can you just, again, state your name, because 

we have-- 

MS. DAVIS: Okay. I'm sorry. As Ms. Hill stated, my name is Amonica 

Davis, Director of TRIO educational Talent Search at Cuyahoga Community 

College. 

As stated in Section 402(b)1(B), the recommendation is to strike the 

language but to have the ability to complete such programs. It is very 

14
important that that language remain. Talent Search was designed for students 

who possess the potential to succeed, who demonstrated educational talent, 

but due to the fact that they were low-income, first-generation, they did not 

enter postsecondary education because they lacked the motivation and the 

information necessary to access higher education, specifically, the 

availability of financial aid, in addition to the financial aid process, and 

the process of selecting, applying to, and entering college. Presently, our 

staff provides our students with the motivation and the information necessary 

to access, because we work with such a population. If the language changes 

relative to our population, it will become a very, very different program. 

So, we would like for you to take that into consideration. 

 Thank you. 

MS. SZELTNER: Good morning. My name is Julie Szeltner. I am the Manager 

of Talent Search at Cleveland Scholarship Programs. Thank you for the 

opportunity to speak today. 

I just want to add two points to what my colleagues have already 

mentioned. A lot of changes to Talent Search proposed in the Higher Education 

Opportunity Act, two more that would affect us greatly, and it's largely 

because of the number of students that we serve, a minimum of 600, is how 

it's now written, and the funding that we do receive--again, we receive 

approximately $400 per student. By raising the standards to include new 

outcomes such as assuring that our students do complete a rigorous secondary 

school program. One point is the rigorous program is not always available to 

our students through our schools, and two, because of the students we serve, 

as Ms. Davis mentioned, they are not always prepared as we need them to be, 

by striking the issue that she mentioned--sometimes our students are not 

going to go to a four-year college but we need to prepare them for a two-year 

degree or a vocational school. Second point--additional--is that Talent 

Search would now be responsible to see that our students complete a 

postsecondary education. This, in effect, extends our services for at least 

four years beyond what we already have to track. 

Currently, we send our students out after they are enrolled in a 

postsecondary institution, and we are not responsible for tracking them 

beyond that; this is a new provision. 

Please consider all of these points, and I appreciate the time that 

you've given us. 

MS. EAFFORD: Good morning. My name is Felisa Eafford. I am the Director 

of the Upward Bound Program here at Cuyahoga Community College, and came with 

15
this team of individuals representing the Ohio TRIO programs, and I just 

wanted to make about three points regarding the annual performance reports 

and how that would affect our programs with the changes in the legislation. 

Annual performance reports are required for all of the TRIO programs, 

generally about 90 days after the end of the grant. They've been generally 

due in November and December. With the recent changes of the legislation, we 

are basically encouraging the Department to revise the reports as soon as 

possible, and to get them out to the project directors. 

The annual reports--the data included in the annual reports show our 

program effectiveness by evaluating them. And so, with the new changes, our 

programs want to be able to accurately reflect the data that the Department 

is going to look at and then evaluate whether we are able to receive 

continual funding based on the data that we provide. So, with the changes in 

the legislation, they refer to some of the required services that our TRIO 

programs offer and also the permissible services and programs report the 

services that have been provided for the students. Therefore, as soon as the 

Department can make changes to these annual reports and get them out to the 

TRIO community, we will know exactly what data is required and what we are to 

report. 

Just one additional comment I do want to make is that prior experience 

is calculated--is looking at the quality and effectiveness of how we 

administer our TRIO programs. And prior experience is calculated based on 

data that we report in the annual report. And due to the changes, now that 

Congress has defined prior experience as opposed to the Department of 

Education, we want to make sure that the TRIO community again knows how to 

accurately track the data that's being required so that the annual report 

data that we are going to be reporting on an annual basis not only reflects 

the agreed upon objectives of the grant, but also the prior experience 

criteria so that, as we apply for new grants, we are able to get all of the 

points that the projects have earned based on the quality of services they 

have provided for their program. And again, I thank you for giving me the 

opportunity to share with my colleagues regarding the changes in the 

legislation and how it would affect the TRIO programs. 

MS. McLARNON: Thank you. Before we move on to the next speaker, could 

we ask that the three speakers that followed Ms. Ellis-Hill and Mr. Niro to 

please sign in at the front desk so we have your full names. 

 Thank you. 

16
MR. MADZELAN: Yes. Thanks for your comments. Just real briefly. I can't 

remember the last time we actually regulated in the TRIO program. I think it 

was before 1994 or so, but what I do know is that we have not regulated in 

the TRIO program in sort of our negotiated rulemaking era. This will be a 

first time for the TRIO community as well as for us with this--well, I guess 

we have had a round of negotiated rulemaking with Gear Up. I was about to say 

that we've not done much negotiated rulemaking with our discretionary grant 

programs. 

So, again, we appreciate all of your comments, and again look forward 

to the TRIO community's participation in our process as we move forward. 

Karen Sarrasa [sic.]--please help me out. 

MS. SARACUSA: Saracusa. 

MR. MADZELAN: Okay. 

MS. SARACUSA: Thank you. 

Good morning. My name is Karen Saracusa. I'm the Director of the 

Office of Disability Support Services at Mt. Union College in Alliance, Ohio. 

And today, I'm here to speak on behalf of the Association on Higher Education 

and Disability. 

Thank you for allowing me the opportunity to speak with you today. 

First, let me say that AHEAD fully supports the Higher Education Opportunity 

Act Reauthorization, which we believe will support the efforts of 

institutions of higher education and our core constituency to improve 

transition, support, and instructional services--services and instruction for 

all students with disabilities. With 77 percent of students with 

disabilities--I'm sorry, while 77 percent of students with disabilities hope 

to go to college, only 31 percent of students with disabilities actually 

attend. We are hopeful that these new regulations will increase the 

opportunities for all students with disabilities and thereby make higher 

education a reality for all. AHEAD is a professional membership organization 

of individuals involved in the development of policy and in the provision of 

quality services to meet the needs of persons with disabilities involved in 

all areas of higher education. At this time, it boasts more than 2,500 

members throughout the United States and other countries. 

AHEAD is fortunate to have formal partnerships with 30 regional 

affiliates and numerous other professional organizations working to advance 

equity in higher education for people with disabilities. AHEAD dynamically 

addresses current and emerging issues with respect to disability, education, 

and accessibility to achieve universal access. As such, it is actively 

17
involved in all facets of promoting full and equal participation by 

individuals with disabilities in higher education and supporting the systems, 

institutions, professions, and professionals who attend to the fulfillment of 

this important mission. There are five key provisions that AHEAD wishes to 

address, and which impact higher education and disability in transformative 

ways. Point one, preparing general education teachers to more effectively 

educate students with disabilities. AHEAD supports a structured multi-sensory 

approach as outlined in 2000 by the National Reading Panel which highlighted 

the five pillars of literacy that are critical to essential reading skills. 

To that end, AHEAD supports the use of research-based methodologies in 

determining the best approaches to instruction in reading and mathematics. 

The education of teachers traditionally takes place within the context of 

higher education, once philosophical and ideological approaches toward 

instruction disability and accommodation are formed within the context of 

teacher preparation programs and those teachers encountered in other academic 

classes. By modeling appropriate teaching techniques in teacher education 

programs or modeling best practices towards providing accessible educational 

courses in higher education, we can make great strides towards increasing 

consistency and teaching and equality of opportunity in education. 

Also, a long-term benefit of the structured multi-sensory approach is a 

replicable methodology for young professionals to use and model. Point two, 

advisory commission on accessible instructional materials and postsecondary 

education for students with disabilities. AHEAD fully supports all efforts to 

make instructional materials in a timely and usable format accessible for all 

students with disabilities. This is particularly important to those students 

with print disabilities, as was outlined in the Wall Street Journal article 

from September 17, 2008, which chronicled the increasing numbers of students 

with learning disabilities entering postsecondary education and their needs 

for varying levels of alternatives to print. 

AHEAD and its members have been important early leaders in the 

creation, development, and expansion of services to fill the void of 

alternatives to print such as Bookshare.org, and has encouraged recording for 

the blind and dyslexia's--efforts to provide its materials in a digital 

format. AHEAD member institutions have an obligation to ensure nondiscrimination of all persons with disabilities in accordance with the 

language of the Americans with Disabilities Act, and the Rehabilitation Act 

of 1973. 

18
Therefore, AHEAD feels that the current definitions as listed in the 

Higher Education Textbook Access Act of 2007 referring to print disability 

would exclude or not sufficiently encompass all people with disabilities who 

would participate in or benefit from the use of books in electronic format. 

The definition needs to be revised and updated so as not be based on the 

outdated NLSA definition, but on a definition that reflects today's 

scientific realities. As our campuses are beginning to deal with issues 

confronting returning servicemen and women, the need to be broader in our 

ability to understand and address disability-related impacts to reading and 

other academic tasks is essential. 

AHEAD believes that an advisory commission will be able to examine a 

broad spectrum of materials and needs to encourage the common approaches and 

flexibility in format that will allow students to move between and within our 

educational systems. AHEAD stands ready to participate, consult, and assist 

in all such efforts. Point three, e-text clearinghouse model demonstration 

programs to support improved access to postsecondary instructional materials 

for students with print disabilities. Through its e-text initiative, a 

collaborative project involving its members, the students, and institutions 

they serve, publishers and numerous organizations, AHEAD has developed an 

understanding of stakeholder positions and current capacities. AHEAD supports 

the idea of a national clearinghouse for accessible text. AHEAD sees it as a 

necessary and efficient first step in the seamless provision of accessible 

digital text directly to students with print impairment. AHEAD fully supports 

the goal and intention of this legislation to improve timely, usable access 

to printed instructional materials for people with disabilities. 

AHEAD realizes that, while this current section is not the final answer 

to issues of text accessibility, it clearly provides for a critical first 

step in attacking a significant barrier to equality for people with 

disabilities in higher education, including many with learning disabilities, 

physical mobility-related disabilities, and blindness and visual impairment. 

As higher education seeks to more fully include people with disabilities, 

legislation supporting that movement is tremendously important, and we 

applaud the committee's efforts in assisting to build systems that can lead 

to systematic change. The ultimate beneficiaries will be the hundreds of 

thousands of people with a varying array of disabilities who seek full and 

equal access to the benefits of higher education. 

Point four, transition programs for students with intellectual 

disabilities into higher education. With authorization of a new program of 

19
model demonstration projects to promote the successful transition of students 

with intellectual disabilities into higher education, clarification is 

necessary regarding appropriate accommodations institutions are to provide 

within existing courses, and the distinction between self-contained programs 

that may be non-degree granting. AHEAD is glad to be a partner in the 

collaborative discussions between interested groups that include parents, 

students, and secondary educators. A college experience, peer-appropriate 

activities, and preparation for becoming a member of society, the workforce, 

the community are part of a student's transition to independence. 

AHEAD recognizes that these transition programs and grants, open 

enrollment, and the availability of federal financial aid may provide 

opportunities to some students previously unavailable. However, AHEAD 

believes that it is critical to identify educational options and expectations 

prior to assuming financial aid debt. Point five, data collection. Colleges 

will be asked to report the "percentage of undergraduate students enrolled at 

the institution who are formally registered with the office of disability 

services of the institution or the equivalent office as students with 

disabilities." The collection of data on students with disabilities has been 

inconsistent over time and across institutions. The lack of consistent data 

has hindered the evaluation of our progress toward inclusion, our 

identification of best practices, and our ability to predict future resource 

needs. AHEAD sees the simple headcount of students with disabilities seeking 

services or accommodations as an opportunity to develop an infrastructure for 

the collection of more meaningful data and the development of reliable models 

for service delivery and resource planning. We are pleased to see the 

addition of this provision, because students with disabilities, like all 

other minority populations on campuses, deserve to be included and counted. 

Currently, there is no defined system or methodology in place to count 

college students with disabilities. Determining how this task will be 

accomplished is critical. Some of the issues that need to be considered are--

AHEAD recognizes the lack of a universal system in defining disabilities 

categorically. Effective collection of data will require a common 

nomenclature. AHEAD recognizes that the need to register with disability 

services offices varies based on the age and state of the building 

environment. The use of universal design and instruction and curricular 

programs and recency of disability status, such as may be the case with 

wounded veterans accessing benefits under the GI Bill. Based on this, we 

support the development of regulations that encourage a full and accurate 

20
count of students with disabilities by using processes similar to collecting 

data on race, gender, and veteran status. AHEAD recognizes the importance of 

enrollment--numbers of students with disabilities, and supports a process 

that will help identify both students who have self-identified, as well as 

those students who make no formal request for accommodations. 

AHEAD recognizes that a simple headcount of identified students with 

disabilities has limited utility, and encourages the Department to consider 

the long-term utility of tracking categories of disability or clusters of 

accommodation needs when developing regulations that will establish a 

foundation for future data-driven policy decisions. AHEAD feels that further 

clarification is needed in order for the data collection to be effective and 

meaningful. AHEAD would be happy to participate, consult, and assist in this 

discussion. 

Thank you again for the opportunity to speak with you today and to 

share the views of the Association of Higher Education and Disability. We 

have submitted our written comments already. Thank you. 

MR. MADZELAN: Thank you. 

MS. McLARNON: Thank you. 

MR. MADZELAN: Erin Redle. 

DR. REDLE: Good morning. I am Dr. Erin Redle, and I'm a speech language 

pathologist at Cincinnati Children's Hospital Medical Center, and an Adjunct 

Faculty Member at the University of Cincinnati. 

Thank you for the opportunity to share the perspective from speech 

language pathologists and audiologists on the issues of the Higher Education 

Opportunity Act impacting our profession. I'm here today representing the 

American Speech Language Hearing Association, or what we call ASHA. ASHA has 

over 130,000 members who specialize in treating speech, language, swallowing, 

and hearing disorders. There are three main areas this law will impact the 

fields of speech language pathology and audiology, including student loan 

forgiveness, accreditation, and inclusion of speech language pathologists, or 

what we call SLPs, and audiologists in funding for teacher preparation 

programs. There is a significant educational expense in becoming an SLP or an 

audiologist. For SLPs, the master's degree is the entry-level degree. In 

almost every program across the country, this requires six years of higher 

education. 

In audiology, the clinical doctorate is now the entry-level degree, 

requiring seven to eight years of higher education. Unlike many fields where 

one can obtain a bachelor's degree and then seek assistance from an employer 

21
in pursuing the master's degree, SLPs must have that degree to begin their 

professional career. My own personal student loan debt when I completed my 

master's program was over $60,000. And from discussing this with some of my 

colleagues, this was not an abnormally high number. Both the additional 

educational expense and time have contributed to the existing shortage of 

speech pathologists across the country, and more significantly, the predicted 

shortage in the future. 

The Bureau of Labor Statistics estimates that between 2004 and 2014, 

approximately 14,000 additional speech language pathologists and 3,000 

additional audiologists are needed in the United States. Specifically, in 

Ohio, an informal study completed by Nada Calendar, the Director of the Ohio 

Master's Network Initiative Program in June of 2007 found that 116 unfilled 

school-based speech language pathology positions existed in 57 counties 

across this state. Student loan forgiveness programs would provide a 

necessary incentive to recruit SLPs to work in the educational setting. 

Traditionally, there are settings for SLPs with both higher salaries and 

better perks, but as the number of children with speech language and 

swallowing disorders continues to increase, we have a responsibility to 

recruit and retain highly qualified SLPs to ensure these children receive an 

appropriate education. 

The second area I would like to address is accreditation. ASHA supports 

the current statutory requirements related to accreditation, and requests the 

Department of Education not consider accreditation as part of the negotiated 

rulemaking. The determination of student achievement should remain at the 

discretion of the individual institutions. ASHA has worked diligently with 

graduate programs across the country to ensure students acquire the necessary 

knowledge and skills to best serve individuals with speech language, 

swallowing, and hearing disorders. 

And finally, ASHA requests the Department of Education include SLPs and 

audiologists among the service providers who are eligible for funds under 

professional preparation programs in Title II. This would offer another 

source of funding to both recruit and retain SLPs in the schools, as well as 

to offer the same training for all individuals of a student's educational 

team. Allowing states the flexibility to use funds for training SLPs and 

audiologists would benefit children in both regular education and special 

education. 

22
Thank you for your time and consideration. ASHA looks forward to 

working with the Department on these matters. Do you have any questions for 

me? 

MR. MADZELAN: No. 

DR. REDLE: Okay. Thank you. 

MS. McLARNON: Thank you. 

MR. MADZELAN: Thank you. Marty Mehringer. 

MR. MEHRINGER: Good morning. My name is Marty Mehringer. I am the 

Director of Student Financial Services at Indiana Business College, and I'm 

here to represent Indiana Business College this morning. 

I would like to briefly discuss two points that have been briefly 

touched upon this morning, the first one the year-round Pell Grant. 

At Indiana Business College, we operate on a quarterly basis, and we 

have four or five starts a year depending upon the program. In this scenario, 

the student could potentially earn one-and-a-half Pell Grants within a year, 

depending on which award year you attribute the crossover term. We would like 

to request that the Department interpret this provision to allow institutions 

the widest possible flexibility to determine on a student-by-student basis 

which award year to use for a crossover payment period to provide the maximum 

benefit for each individual student. The second point that I would like to 

discuss is the additional $2,000 in unsub that was passed through the ACASLA 

act. The law provides that for loans disbursed from July 1st of 2008 to June 

30th of 2011, an institution can treat as non-Title IV revenue the amount of 

Stafford Loan disbursed to a student that exceed the loan limits that existed 

prior to the ACASLA Act. The intent was to allow funds that otherwise would 

likely have been provided by private lenders but will now be provided under 

the authority of the increase in loan limits to count toward 90/10 

compliance. 

Some implementation opportunities arise. Because loans are divided into 

multiple disbursements, the question arises as to how the institution will 

attribute the extra loan amounts, especially in instances where some 

disbursements will cross over into the next fiscal year. The most sensible 

method for handling this would be to attribute the extra loan amount to each 

payment period in proportion to its relation to the amount of the Stafford 

Loan as it was initially packaged. 

Schools should not be required to go back after the close of fiscal 

year and reattribute the loan to the regular Stafford Loan if the student 

subsequently drops out and does not receive the remaining disbursements. 

23
Similarly, if a student drops out during the fiscal year and the funds are 

subject to the return of Title IV refund calculation, the amount of Stafford 

Loan repaid should proportionately attribute the extra and regular Stafford 

Loans for the purposes of the 90/10 calculation. I would like to thank the 

Secretary for the opportunity to present my views and comments this morning. 

MR. MADZELAN: Thank you. Don Yearwood. 

MR. YEARWOOD: Good morning. My name is Don Yearwood. I'm President of 

Carousel Beauty Colleges and the Spa Institute, and a member of the American 

Association of Cosmetology Schools, AACS, Board of Directors. 

I want to begin by thanking the Department for convening these meetings 

seeking public comment and recommendations in the development of regulations 

implementing the Higher Education Opportunity Act of 2008. I am honored to be 

with you today and provide testimony on behalf of my institution, and also 

the entire AACS membership. I am very proud to announce, also, that Carousel 

Beauty Colleges and the Spa Institute, which was founded in 1959, in 2009, 

we're getting ready to celebrate our 50-year anniversary. So, we're very 

excited and proud of that. I provided at the registration desk a letter 

addressing all of our membership's regulatory priorities and recommendations, 

and I think you've got copies of those at the Panel. 

My testimony will focus on three proprietary, specific areas where AACS 

was actively involved in the development of the legislation, and are looking 

forward to working with the Department as we enter the final critical phase 

of the most recent reauthorization of the Higher Education Act, implementing 

the provisions contained in HEOA. 

The first area, year-round Pell. As the primary advocate on behalf of 

the proprietary institutions of higher education for the new year-round 

Federal Pell Grant Provision, AACS looks forward to working with the 

Department to ensure the regulations provide all students with the 

opportunity to complete their education and training in the shortest amount 

of time possible, enabling them to enter the workforce sooner while receiving 

access to all the Title IV grant funds they are eligible to receive. To this 

end, AACS requests that the Department agree to suspend implementation of 

and/or place a moratorium on the previously promulgated regulations regarding 

the period used to determining the awarding of Federal Pell Grants under the 

definition of prior minor year charges, which were never subjected to federal 

negotiated rulemaking. Specifically, review the effectiveness of requiring 

institutions to award and disburse Federal Pell Grants using payment periods, 

not academic year, in light of the new statute. Finally, include this issue 

24
for deliberations as a specific part of the 2009 HEOA federal negotiated 

rulemaking process. 

The second area, cohort default rates. AACS suggests that the 

Department focus particular attention on the provisions in the statute 

requiring default prevention taskforces, reports to and technical assistance 

from the Department, and the earlier two-year regulatory relief appeal. These 

provisions call for more of a partnership between institutions and the 

Department, which we hope will result in increased understanding of the 

efforts undertaken by institutions to prevent student loan defaults. 

Establish the interaction between the institution's default prevention 

taskforces, and the Department--not simply as a paper-shuffling exercise, but 

as a full and open line of communication, and a way to establish whether an 

institution should be held responsible for default rates exceeding the 

threshold, or if default rates are actually a reflection of external factors, 

such as the economic circumstances of the student population it serves, which 

are truly outside the institution's control. Finally, afford AACS the 

opportunity to negotiate the outcome and resolution of this provision as a 

primary negotiator appointed to the federal negotiating team assigned to 

address this issue. 

The third area, 90/10. In light of the most recent increases in student 

financial aid, we are particularly concerned about how the regulations will 

account for the $2,000 increase in unsubsidized Federal Stafford Loans 

disbursed between July 1, 2008, and June 30, 2011, and how those loans will 

be tracked and counted as non-Title IV revenue. We recognize that the 

attribution of these funds as non-Title IV revenues for the purpose of 90/10 

pose considerable problems as it relates to disbursements, refunds, and the 

appropriate allocation of funds in the calculation. We look forward to 

working with the Department and address these complicated issues both with 

the near-term and throughout the negotiated rulemaking process. AACS also 

requests that the Department follow the statute closely and eliminate or 

modify those regulations in conflict with the statue. This would include the 

treatment of institutional loans through Fiscal Year 2012, tuition discounts 

counting non-Title IV eligible program tuition as revenue, and also including 

Section 529 accounts as revenue. 

AACS is concerned about how institutions with fiscal year ends just 

completed, September 30, those with calendar fiscal year ends soon to be 

completed, and their CPAs are to assess and attest to an institution's 

compliance with a new law which took effect upon enactment, August 14, 2008. 

25
AACS recommends that the Department include a safe harbor provision in 

the soon-to-be published dear colleague letter ensuring the institutions that 

have made good faith effort to comply with the spirit and intent of the law 

are not sanctioned or penalized for inconsistencies in interpretation or 

reporting prior to the development and promulgation of the regulations. 

Provide AACS the opportunity to negotiate outcome and resolution of this 

provision as a primary negotiator, representing the interest of the largest 

block of institutions measuring programs and clock hours appointed to the 

federal negotiating team assigned to address these proprietary, specific 

eligibility issues. 

Thank you for allowing me to present these concerns to you. AACS looks 

forward to submitting nominations to serve on the federal negotiating 

committee assigned to implement the provisions we worked closely with 

Congress to enact. Thank you very much. 

MR. MADZELAN: Thank you. Tom Siu. 

MR. SIU: Ms. McLarnon, Mr. Madzelan, I am Tom Siu, Chief Information 

Security Officer at Case Western Reserve University in Cleveland Ohio. 

Thank you for the opportunity to testify today. I'm going to discuss 

the provisions of HR 4137, which address peer-to-peer file sharing issues. 

By the way of background, I am an information and network security 

professional, with applicable experience in the private sector, the federal 

sector, and in higher education. Case Western Reserve University is a private 

research university, enrolling approximately 10,000 students with 4,000 

undergraduates, 6,000 in graduate and professional students. The majority of 

our undergraduates reside on campus, and our graduate and professional 

students are enrolled in our medical, dental, law, nursing, management, 

social work, engineering, and arts and sciences colleges. Our Fiscal Year 

2008 externally-sponsored research was approximately $375 million. We have 

approximately 20,000 network users. My testimony will address three issues: 

What "effectively combat" means, technology deterrence, the customer 

relationship model in higher education's mission. The first is focused on 

Section 488 of HR 4137, specifically related to the term "effectively 

combat," which is ambiguous and requires some clarification. Based on my 

experience as the Chief Information Security Officer at the university, I 

recommend a simply, five-level approach drawn from the National Institute of 

Standards and Technology security program maturity levels. To define 

effectively combat, these include, level one, written policies in place, 

level two, procedures in place, level three, implementation of procedures, 

26
level four, compliance testing, and level five, integration into university 

operations. 

I would like to provide an example of the ways in which the university 

has been addressing issues related to P2P systems for several years. Our 

effectiveness is, in part, the result of experiences learned from the student 

judicial process. Those experiences have shown us that measures of 

effectiveness should be pertinent to the matter and appropriate to the 

context of the university; for example, residential universities versus nonresidential. Globally, the number of notifications is an ineffective measure 

in this capacity, because locally the universities experienced fully 20 

percent of all the copyright infringement claims that we receive are 

unverifiable and invalid. We suggest a self-reported maturity level as a 

simple, qualitative measure. As a research university, we have a technology 

infrastructure, and a program that pretty much meets level five, but other 

colleges may not be at that same level. 

The second item I will address focuses on Section 488 and 493, which 

both emphasize specific technology-based deterrents, and alternatives to 

illegal file sharing. The legislative language assumes a static picture of 

the issue of copyright violations. In our experience of security risk 

management at the university, the IT role has flattened during the past few 

years. Each measure taken to inhibit one behavior elicits a market response 

with new products that circumvent each measure. This cat-and-mouse game is 

similar to the vulnerability management and antivirus problems that IT uses 

experience daily. These risks are constantly present and, in some cases 

manifest as problems. On the issue of legal alternatives, we advocate a 

marketplace approach, services such as iTunes, to fill a market need. I 

recommend the Department abstain from rulemaking that drives colleges and 

universities to picking a market winner in terms of technical deterrence or 

alternative services. Additionally, I recommend a reporting solution to the 

Department by creating a small council of college and university chief 

information security officers in concert with the American Council of 

Education, the Association of American Universities, and Educause. 

The council would participate in a negotiated rulemaking process and 

develop an annual report to Congress with empirical information on the 

operational status of the P2P networking and copyright infringement issues. 

The third issue I will discuss is the engagement of students through 

the customer service relationship of a university with its students and user 

populations. The university's mission is to provide its customers with an 

27
environment conducive to preeminent research, education, and the advancement 

of creative endeavor. Much of the research conducted at our university 

capitalizes on the efficiencies provided by P2P technology. The fulfillment 

of the educational mission may also include the character development of the 

future leaders of the Nation, and through responsible governance, we have an 

imperative for responsible behavior of individuals. The rules established 

need to resonate with the primary mission of the universities in educating 

and encouraging responsible behavior and avoid creating an adversarial 

relationship with our customer. 

In conclusion, the university fully supports the enforcement of 

copyright law. We believe an effective strategy for addressing the issue is 

through a five-level security measure. The rulemaking on technology and 

alternative services should defer to market forces, and we need the 

flexibility to address responsible governance through our relationships with 

our customers. 

Ms. McLarnon and Ms. Madzelan, thank you for the opportunity to testify 

today on P2P file sharing issues. I'm prepared to answer any questions, if 

you have any. 

MR. MADZELAN: Any questions? Thank you very much. 

MS. McLARNON: Thank you. 

MR. MADZELAN: John Shop [sic.]. 

MR. SCHUPP: Thank you for having me this morning. I appreciate it. My 

name is John Schupp from Cleveland State University--that's okay, the name is 

often mispronounced. I represent the SERV Program at Cleveland State 

University. It stands for Supportive Education for the Returning Veteran. 

I created this program in 2006 to address the needs of the veterans on 

campus. It wasn't started from the top down; I had to work from the bottom 

up. And what I did was I went to the VA (Veterans Administration) and met 

with veterans from the Vietnam, the Persian Gulf I era, and asked them, when 

they were on campus back then, what did they wish they had available to them? 

Why did they drop out? The usage rate of the GI Bill, and I got this from 

different sources--the usage rate, the complete usage rate, is less than 

eight percent, meaning they don't graduate, and there's reasons why they 

don't graduate, and that's what I found out. When I listened to the vets from 

Vietnam and Persian Gulf I they gave me many reasons for it, but the top five 

are the ones that I use to address the SERV Program. 

The first one is that first day on campus. I walk them through the 

registrars, the "bursars," the cashiers, the admissions process--I walk them 

28
through personally, because when they get out of the military, they don't 

know where to go, and they walk on campus and the first thing they see is 

they see someone behind a desk and they say, "I want to go to school," and 

they say, "Oh, you're in the wrong building. You want to go over there, then 

you go over, then back over there, then come back here." Well, they're home 

by that time. So, I address that personal walkthrough. 

The second issue is we have classes set aside just for vets. The Gen Ed 

classes, English 101, Math 101, and so on--and what I have found--we've been 

doing this now since fall of '07--spring of '08 was when it was enacted. What 

I have found is when they are among themselves, they have the camaraderie 

that they had when they were in the military. They are succeeding because of 

that. When I talked to the Vietnam vets they told me that, "John, we're not 

stupid; we just couldn't concentrate. That was our problem." And if you can't 

concentrate, and you can't remember, you can't pass the exam, and then you 

fail the class. So, what I did was is I though, if I can create an 

environment for them that they can relax in and concentrate, perhaps they 

could pass, and this is what has happened. 

When I had my first set of classes--and I teach chemistry there--when I 

had my first set of classes, I had 14 students in it. I gave out the first 

exam and I was concerned about how they were going to react to it. I gave out 

the first exam, it was chemistry, it wasn't easy--it wasn't like "fill in the 

blank and circle this." They took it--they had an hour to take it, they were 

fine, they got up, handed the exam in, didn't have any problems. I graded it 

on a higher average than my civilians. So, then I asked them the question the 

next day. I said, "When you walk into a classroom full of civilians, a 

hundred or so, in a Gen Ed class--a hundred civilians--does this go through 

your mind: 'Okay. I've got civilians in here. I've got people in here I may 

try to protect, people who may try to attack me, I've got to find the exits, 

I've got to see what I have to do, if I hear a noise, what's wrong with that 

noise, why am I thinking this way--what's question one?" 

That's what goes through their mind. They are trained to protect 

civilians and trained to protect themselves, and when they walk into a room 

full of civilians, that's what they have to do. If a civilian walks into a 

classroom for a test, "What's question one?" I went back and talked to the VA 

and talked to the vets, they all said, "Absolutely, that's what we go 

through." Now, put them in a room full of vets. They walk in, it's all 

military. "I don't have to worry about it. I don't have to protect them and 

29
they're not going to try to kill me. What's question one?" That's why it 

works. 

So, what we're doing at CSU and then Section T of the Higher Ed Act, 

which I appropriate the DOE putting together--what we're doing is we're 

creating a comfortable environment for them to learn to concentrate, 

remember, take exams, get confidence, so that, in the next semester--now, we 

offer four classes the first semester--12 credit hours for full-time 

accreditation, full-time benefits, and then the next semester we only offer 

nine so that they have to take another class in civilian world, just so that 

they can get used to going into civilian. The third semester, then, is going 

to be six credits in SERV and six credits in civilian. This way, they take 

baby steps back into civilian world. It helps in the transition. The third 

item that I've implemented is bringing the VA to the campus. These people 

have questions, they have concerns, they have issues that an academic world 

really can't answer, and I don't want to have academics involved in that. 

The VA are the experts. Bring them in. Have an office. They're there 

for them all the time, one day a week, one day a month, whatever. With the 

new GI Bill being implemented August 1, 2009, just to give you some numbers--

if 70 percent--got to make sure I get this right--if 70 percent of the 1.7 

million deployed vets since 9/11 attend community colleges, the cost of 

living allowance, the $950 just to go to school, above and beyond tuition and 

books--the cost of living allowance would be $20.5 billion going into the 

communities and towns of that college. If 40 percent transferred then to 

universities and continued on--these are not big numbers, now. 40 percent 

transferred, you're looking at $16.4 billion going into the towns, just for 

these guys and women to live, buying food, cars, whatever. 

Now, the personal impact of the veteran is tremendous. The transition 

that's occurring right now is remarkable. They will be able to talk about 

their experiences before class starts. They're able to discuss what they saw, 

what they felt, what they heard, and then English starts, and they have 

English. Then they talk about it again for ten minutes and then math starts. 

And what I'm seeing that's occurring is it's easier for them to talk about 

their past experiences when they're immediately focused on their future. 

That's what I see happening right now. And they're also getting used to the 

civilian world slowly while they still have their comfort zone with their 

group in their class. Lastly, I would encourage the Nation's universities and 

community colleges to take advantage of Section T in the Higher Ed Act. It 

provides funding for the same kind of program I have at CSU. When I developed 

30
it--and I worked with Senator Brown to create this Bill--when I developed it, 

I knew that the university would have a tough time trying to come up with the 

money to get this program going. That's why I did it, and that's why I'm so 

pleased that it's in the Higher Ed Act. I'm so excited for these vets when 

they come back because they need to have the universities and community 

colleges at their disposal. I feel that, with the widespread use of Section T 

in the Higher Ed Bill, we can make this generation the next Great Generation. 

Thank you for your time. 

MR. MADZELAN: Thank you. 

MS. McLARNON: Thank you. 

MR. MADZELAN: Well, we will take a break now for about ten minutes, and 

then we will reconvene at about 10:40. Thank you. 

 [Brief Recess.] 

MR. MADZELAN: We're going to reconvene. And our speaker is Dave LaRue. 

MR. LaRUE: My name is Dave LaRue. I represent Akron Institute of 

Herzing College. Akron Institute has been an institution in northeast Ohio 

since 1970. The Herzing College System has been in existence since 1965. 

My personal experience: I've had 29 years in proprietary education, 19 

of those was with ITT, the last 10 years have been with Akron Institute. 

Through these committee hearings, you will here testimony again, later on 

today, throughout the day, as well as in the previous hearings from both 

public, private, and proprietary schools. All three venues have a purpose in 

serving the community of students wanting postsecondary education. The access 

to Title IV funds, the rules and regulations through the Higher Education Act 

apply to all of these institutions, but not necessarily equally. In the 29 

years I've seen regulations been passed and gone away, new ones revised, new 

ones modified, and they don't always equally treat all of the participants in 

the programs. What I would ask in this testimony today is that, through these 

hearings, through the committee work, that all three levels, proprietary, 

private, and public institutions be given the opportunity to not only present 

information, but also be members of the committees as represented earlier 

this morning and allow for participation from all of these organizations. 

Not all students that seek further education, postsecondary education, 

are geared towards traditional schools. Career schools are necessary for 

those people, again, through previous testimony today--those students that 

don't have the desire or the need to go to traditional schools. It is our job 

31
as a career school to provide that opportunity, and we have to have equal 

footing with other institutions to provide that opportunity. In particular, 

all schools should be required to have the same disclosures through 

accrediting agencies that have to be approved periodically through the 

Department of Education. Those accrediting agencies have safeguards to 

prevent violations of those rules and regulations. 

States have their own rules and regulations governing the opportunities 

to education to postsecondary. Those regulations are reviewed, are monitored, 

the accrediting agencies are required to review and monitor the operations of 

the schools. They should be equally responsible at all levels, public, 

private, and proprietary. One of the things that it was asked that we present 

during testimony is in reporting of disclosure of retention rates within a 

school. We have a clientele that--we have allied health programs, primarily--

probably about 85 percent of our student population is female. We have 

students that become pregnant and have to stop their education. They are not 

dropping out, they are stopping their education for a short time. They plan--

we ask them to sign a plan saying that they are intending to come back, 

assuming that all procedures and everything occur as expected. Those students 

do not count to benefit our drop rate. Those students are counted as a drop, 

but they do not readily fall back into place as part of the retention rate. 

Another disclosure, and again, previously stated in testimony, is the 

template or a standard of reporting. Another area of reporting is employment 

rates. Career schools are measured by the employability of their students. As 

a general term associated with it, their outcomes. The outcome of their 

education is, are they doing what they've been trained to do. Education is 

vital. Education is important. But what they do with that education upon 

completion is the most critical item. The last thing I'd like to identify, 

because Herzing College does also have an online campus, and one of the 

discussions in the regulations is the distance education verification. There 

are means in which that can be monitored, but as mentioned previously, just 

like with spyware and viruses, every time somebody comes up with a new plan, 

there's always somebody to come up with a plan to go against that plan. 

No matter what verification, no matter what method is used, there's 

always going to be a way in which someone will be able to abuse, not use, the 

system. I would ask the Department, in consideration of rules and regulations 

concerning distance education verification look at the financial as well as 

the practical aspect of doing the verification. One of the suggestions was 

utilization of a PIN number. The Department of Education currently uses PIN 

32
numbers for the students for financial aid to be able to go in and look at 

their FAFSA, make adjustments to their FAFSA, and so forth. There is no 

verification just because somebody has a four-, five-, or six-digit PIN--

there is no verification that the person actually entering that PIN is the 

one that is looking at that screen. There is also no verification that the 

person entering the PIN, although it may be their PIN and they are actually 

entering it in, there is no verification or clarification that that is the 

individual actually doing the work at the time whether it be through an 

educational course, whether it be filling out forms, or whatever the case may 

be. 

We all hear everyday about identity theft. People may be able to get 

identities of people, use their PINs, use their access, unbeknownst to the 

person, or known to the person for the intent of doing better than what they 

necessarily are qualified to do. Again, I would like to thank the opportunity 

of the Department of Ed to present this testimony. I would also encourage the 

Department to allow proprietary schools equal access to the rulemaking 

process so that we can provide the education that we have provided for so 

many years, an effective education. 

 Thank you. 

MR. MADZELAN: Thank you. Nick York. 

MR. YORK: Good morning. My name is Nick York. I'm a Partner with the 

law firm of Tucker, Ellis, and West, and I'm here today representing the 

Recording Industry Association of America, or RIAA. 

For the past few weeks, you have heard from representatives of both the 

entertainment and education communities, all of whom have provided you with 

examples of effective solutions and arguments for flexible regulations. I 

won't spend time rehashing all the details, but I would like to take this 

opportunity to sum up the importance of the file sharing provisions in the 

HEOA and the ways in which administrators can best follow their guidelines to 

their schools own benefit. 

The requirements of Section 488 of the HEOA highlight the fundamental 

importance of alerting students to the hazards and penalties of illegal file 

sharing. As others have mentioned, most schools by now include at least a 

basic explanation of these issues in their acceptable use policies, but 

again, it is the clarity and the accessibility of these policies that 

determine their effectiveness. Including such policies in orientation 

materials with periodic and thorough reminders is essential. And finally, 

enforcement of such policies must be swift and meaningful. 

33
As policies are only as good as their enforcement, schools should 

implement consequential punishment schemes and impose penalties upon students 

who violate stated policies. Section 493's discussion of adoption of 

legitimate services reflects the widespread understanding of the 

effectiveness of such a step. In fact, according to a new Educause survey, 15 

percent of U.S. schools already offer some type of campus-sponsored music or 

movie download services, and another 17 percent have plans to or are 

considering implementing them. 

For years, the entertainment industry heard individuals, including 

students, excuse online theft because they didn't have an alternative to 

acquire their content online, but today there are countless opportunities for 

people to get their music online, from download services like iTunes and 

Amazon to subscription services like Rhapsody. If universities can wean their 

students off of abusing the schools' networks by adopting and offering a 

legal alternative, it just makes sense to do so, particularly if that service 

is free to both the students and the school. Finally, we have heard much 

about Section 493's requirement that schools develop plans to address this 

illegal activity, including through the use of technology-based deterrents. 

We have heard about the significant cost savings such technology can provide, 

and the security and network integrity offered by adoption of these 

solutions. 

Of course, we've also heard the requests for flexibility in their 

implementation, and we agree with this call for flexibility, as different 

schools have different network sizes and architectures. The fact is that 

technologies that many of us have been discussing including Audible Magic and 

Red Lambda provide administrators with considerable flexibility in their 

configuration. These solutions are not one-size-fits-all. They account for 

schools' unique situation and provide reasonable and appropriate solutions, 

including the limiting of their use to residents--hall networks, where a 

large portion of the infringement occurs. And of course, these businesses 

want to work with schools. The more flexible they are, the more schools will 

be willing to implement them, and we hope that the Department will encourage 

schools to contact these providers and find solutions, truly effective 

solutions, for their own networks. Again, we thank the Department for holding 

these hearings, and allowing us to provide you with information on how 

schools can best perform the provisions outlined in the HEOA. We hope the 

Department will continue to include representatives of the entertainment and 

content industries to provide ongoing assistance in the rulemaking process. 

34
Thank you very much. 

MR. MADZELAN: Thank you. Todd Jones. 

MR. JONES: Good morning. My name is C. Todd Jones, and I'm President 

and General Counsel of the Association of Independent Colleges and 

Universities of Ohio. 

AICUO represents independent, nonprofit colleges and universities in 

our state, ranging in size from 130 students at the Art Academy of 

Cincinnati, to 10,000 at the University of Dayton. 

Our members graduated over one-third of the state's baccalaureate 

degree recipients last year, and award degrees from the associate to doctoral 

levels. Our institutions include dozens of liberal arts colleges and faithbased institutions, a historically Black college, major research 

institutions, professional graduate programs, single-purpose colleges for the 

arts, nursing, and medicine, and institutions with major online presences. 

AICUO thanks the Department for holding these meetings here to gain an 

understanding of the interested public's view about HEOA. AICUO was 

supportive of efforts to reauthorize the Higher Education Act, in part 

because the law has many helpful elements, and because it's been years since 

a reauthorization has moved through the legislative process. At the same 

time, we have serious concerns about the burdens, the provisions the law will 

pose on our member institutions. To that end, our comments will focus on 

three areas: general comments on the law, reporting requirements, and 

regulatory process. 

Through its elective representatives and the President, the people have 

spoken, HEOA represents compromises and consensus on areas of major federal 

interest. The regulatory process that follows should address the practical 

limitation of those issues. While every administration and federal agency 

stands behind the principle that the law is the law, and there are always 

cases of principle being discarded in the breach. "Shall" has been read to 

mean "may." Advisory panels have been stacked to preclude views opposed by 

the current administration, and rulemaking practices have been stretched 

beyond limit to achieve particular ends. 

Our association strongly recommends that the U.S. Department of 

Education reflect on its experiences in rulemaking over the past four 

decades, and reaffirm its interest in being stewards of the will of the 

elected legislature, re-embracing the role of practical--administrator should 

be a paramount concern as the law is implemented. Secondly, on reporting 

requirements. There's no question that Congress has asked the American higher 

35
education institutions to hold themselves publicly accountable through 

government reporting mechanisms. Arguments for other means, both more and 

less burdensome and intrusive were rejected through the interest-balancing 

process of legislative democracy. But now that Congress has spoken, the U.S. 

Department of Education retains the responsibility of implementing what was 

passed in the least burdensome manner that still meets the agency's 

responsibilities under the law. To that end, AICUO offers several principles 

to improve the implementation of Ed's reporting responsibilities. 

First, use existing mechanisms whenever possible. While there are many 

new reporting obligations in HEOA, there is little requiring that new systems 

of collection be developed. We recommend that, whenever possible, Ed use 

existing means of collection. Use IPED's definitions whenever possible. 

Consolidate reporting requirements together. Use existing public reporting 

and dissemination systems, even if they are privately held. To put meaning to 

that last example, when the Department has the choice between collecting and 

publishing information about colleges or simply requiring a college to 

publish information on its own website, the latter option should always be 

viewed as preferable. Not only is it more likely the information will be 

consumed by people interested in that institution, but the cost of doing so 

will be less, and the likelihood of it being revised in a timely manner will 

be increased. Similarly, non-governmental efforts offer ED the opportunities 

to identify best practices. 

For example, the Department is to be commended in turning COOL into 

college navigator, a significantly more appealing design, yet both pale in 

comparison to U-CAN, a simplified effort developed by the National 

Association of Independent Colleges and Universities. U-CAN leverages 

colleges' own websites and creates a more functional repository for 

policymaker information. ED should capitalize on these successful ideas 

instead of offering pale imitations by deferring to such non-federal public 

sector resources whenever possible. 

The concise design of U-CAN itself highlights another core concept: 

less is more. It is simply not possible to underestimate the real impact of 

regulatory burden on small colleges. Most of my 51 members do not have a 

full-time institutional researcher, and any new reporting requirements are 

going to fall on staff who have other existing responsibilities. The concern 

is valid and will result in real increased tuition costs to students. Our 

smallest institution has 130 full-time equivalent head count. Every 

simplified financial aid application, every unduplicated reporting 

36
requirement, every day saved in professional development about how to report 

to the U.S. Department of Ed is meaningful for that institution. For an 

institution of that size, reporting is done by professors themselves, and 

administrators who also teach. Every hour you save means actual educational 

value for students. 

Third, embrace flexibility. Just as institutions and states differ in 

form and function, so too they differ in relevance to policy issues and 

regulatory implementation. At times, ED elevates the need for perfect 

uniformity above flexibility. For example, the Department continues to 

wrestle with efforts to align public and private college accounting data even 

though the professional standards for reporting that data differ 

substantially. ED compounds the error by assuming what has been reported 

actually reflects what is happening at different institutions, when instead 

the need for perfect alignment has created data that no one honestly believes 

is similar. 

In a break from the past, ED should seriously consider with every 

reporting requirement whether the form or content of data reporting should 

vary by institution's size, type, or form, for example, public, independent, 

and for-profit colleges. In nearly every area, ED has the authority to make 

these kinds of distinctions but chooses not to do so because, a, establishing 

an appropriate justification for a distinction is difficult as setting a 

standard for the distinction itself and, b, the desire for uniformity is a 

powerful administrative motivator. AICUO recommends that ED embrace this 

challenge and review every rule for the opportunity to be flexible in the 

implementation of rules across type of institutions. 

Fourth, provide interim guidance. Thoughtful regulation takes time, but 

many of the provisions of this Bill took effect immediately upon President 

Bush's signature. While the Association understands that ED shares the 

college community's burden of implementing the law in this manner, it is only 

the colleges, and ultimately their students through tuition costs and lost 

services, who will be penalized for actions that are only judged in hindsight 

as failures to comply, and for whom errors in guidance lead to higher costs 

and lost opportunities. The interaction between the provisions in Title IV, 

which is subject to negotiated rulemaking and Title I, which is not, are 

murky at best. Ed should offer interim guidance and do so with the greatest 

of care. Though I shudder to think it, negotiated rulemaking and the arrival 

of a new administration could mean these provisions are in place for a long 

37
time. We strongly encourage you to exercise the greatest care in creating 

that guidance. 

Lastly as to the regulatory process. For regulatory process, AICUO 

makes recommendations in two areas. First, speaking as one who has 

significant, high-level, recent experience with the development of advisory 

panels in the U.S. Department of Education, on behalf of AICUO, I most 

strongly recommend that ED attempt to identify negotiators for the rulemaking 

process that represent a consensus of constituent communities about whom 

would be an appropriate negotiator. Nominating individuals that meet 

statutory requirements but who are selected for their personal willingness to 

meet particular policy ends sought by senior officials is not an acceptable 

means of implementing proposed--implementing negotiated rulemaking 

provisions. We recommend that the Department pick negotiators in a manner 

that reflects the will of constituencies, even when that may run counter to 

administration priorities. ED owes this to the people who have entrusted the 

power to them through a democratic process. Whether one agrees with 

negotiated rulemaking as created by Congress, it's the law and should be 

reflected as such. 

Second, in previous departmental forms, many have suggested that 

certain technical panels be made up of interested specialists to address 

narrow policy considerations. To that, AICUO and private colleges dissent. 

File sharing, articulation practices, and other controversial topics that 

have reached compromise through legislation deserve review by special and 

general interests alike. The most impacted of those, and those partially or 

minimally impacted, have differing interests, but equally deserve the right 

to a voice. We encourage the Department whenever possible to ensure that 

subgroups and special panels are kept open to broader input and that their 

recommendations are subject to full review by larger stakeholder interest. 

Thank you very much for your time. 

MS. McLARNON: Thank you. 

MR. MADZELAN: Thank you. Ken McGhee. 

MR. McGHEE: Good morning. My name is Kenneth McGhee, and I work here at 

Cuyahoga Community College as the Executive Director of Financial Aid. 

Good morning. Thank you for selecting our college as one of the few 

locations nationwide to hold this important event. The Higher Education Act 

of 1965 as amended has an interesting history. I hold in my hand a copy of 

the original legislation. The first sentence of this document reads as 

follows: "An Act to strengthen the educational resources for our colleges 

38
and universities, and to provide financial assistance for students in 

postsecondary and higher education." Working as a financial aid professional 

for the past 13 years, I have firsthand knowledge that the federal 

legislation has an important impact upon numerous students and their 

families. Financial aid administrators have four core duties and 

responsibilities. 

First, we work to provide comprehensive financial assistance services 

to students, parents, high schools, and the general public, and our local 

community. 

Second, we coordinate efforts with numerous campus departments to fully 

utilize technology to streamline the financial aid awarding process, and to 

better assist students by offering more options online. 

Third, we review office operations for compliance for federal and state 

regulations. 

Fourth, we consider industry best practices to see if they are a good 

fit for our institution. As I read the changes in the law, it appears that an 

attempt to create a balance between these four competing themes was in place. 

I applaud your efforts to do so. I would like to now comment on 

specific areas of the latest version of the law which directly relate to the 

task which financial aid administrators juggle on a daily basis. 

Number one, year-long Pell Grant funding. I support your efforts that 

led to the realization that some students attend school year-round. This 

change has the potential to increase student access to attain the college 

degree. My suggestion is that recordkeeping and eligibility monitoring 

requirements, which are necessary, and they're also pending development, be 

made keeping in mind a way to keep accountability, but not at the same time 

add too much administrative burden to a financial aid office. 

As you are aware, front line financial aid administrators have to 

balance their time between advising current and future students about 

numerous financial aid options, at the same time by reviewing every single 

document that is turned to the office for legal compliance. That is a 

constant juggle for financial aid administrators on a daily basis. 

Second of all, I would like to talk about the provision for 

professional judgments for student loans. As you are aware, the definition of 

a family continues to change. Over the past 13 years, I have witnessed an 

increasing number of students in a family be able to document neglect or 

abuse. At the same time, more parents are refusing to serve as a main 

financial support for their children's educational cost. I understand your 

39
efforts to increase student access by providing flexibility for a financial 

aid administrator to award a student an unsubsidized loan in this type of 

situation. Two concerns come to mind related to this provision. 

First, many middle class families may utilize this option instead of 

following the standard financial aid process. Efforts are already underway, 

led by the U.S. Secretary of Education's office to make the FAFSA process 

easier for students and their families. The new professional judgment 

flexibility may not support the efforts by the Secretary's office to make the 

FAFSA process more straightforward. 

My second concern is first-generation students and low-income students 

have shown that many are not comfortable with the financial aid process and 

overall college process. Research, mainly out of the University of 

California, Southern California College of Education, has shown that many 

low-income and first-generation students are just uncomfortable with the 

Internet altogether. Many dedicated financial aid administrators and other 

educators are working very hard to provide workshops and other outreach 

efforts to assist students and families in this situation. The new 

professional judgment flexibility could result in many Pell Grant eligible 

students not completing the financial aid process due to fear of the process 

and, in essence, only receive an unsubsidized student loan. 

My other concern relates to professional judgment adjustments 

altogether. The change in the law now allows nursing home expenses not 

covered by insurance, unusually high dependent care expenses, and student 

dislocated worker status as examples of areas a financial aid administrator 

may use to make professional judgment to a family's data elements. It appears 

to me this flexibility was already in place due to Section 479 of the Higher 

Education Act, which reads as follows: 

"Nothing in this part should be interpreted as limiting the authority 

of the financial aid administrator on the basis of adamant document to make 

adjustments on a case-by-case basis. However, this authority shall not be 

construed to permit an administrator of financial aid to deviate from 

contributions expected in the absence of special circumstances." 

By the law now specifically naming a few circumstances, it appears many 

financial aid administrators may continue to request clarification related to 

the topic "professional judgment." It appears to me the spirit and intent of 

Section 479 already allows for special consideration to making a case-by-case 

decision for a student and their family. My suggestion is no further unusual 

or extenuating circumstances be added to the current professional judgment 

40
doctrine. In closing, I would generally request that the next steps in a 

negotiated rulemaking process keep in mind the language and ideas and the 

original law in 1965, and the original themes appear to be student access, 

community service, and federal support for state colleges and universities. 

 Thank you. 

MR. MADZELAN: Thank you. Karen Solinski. 

MS. SOLINSKI: Good morning. Thank you for the opportunity of testifying 

before you this morning. 

My name is Karen Solinski, and I am the Assistant Director for Legal 

and Governmental Affairs with the Higher Learning Commission of the North 

Central Association. The Higher Learning Commission is one of seven regional 

accrediting agencies that provide institutional accreditation within areas of 

jurisdiction that are defined by regional boundaries across the United 

States. 

The regional boundaries of the Higher Learning Commission encompass 19 

states, contained in an aggregate nearly two million square miles from 

Arkansas to Arizona. Within this Region, the Commission has granted 

accreditation status to over 1,000 institutions. The total head count of 

students at these institutions accredited by the Commission is nearly 5.9 

million students. The Commission's membership includes institutions with a 

broad range of institutional mission. Within the membership are several major 

public and private research institutions such as the University of Michigan 

or Ohio State Northwestern, and prominent liberal arts colleges such as 

Oberlin College right here in Ohio. 

But further broadening the Commission's membership are nearly 350 

community and technical colleges, including this fine institution, Cuyahoga, 

as well as free-standing seminaries, schools of law, schools of medicine, 

schools of psychology, and schools of nursing. The Commission membership 

truly exemplifies the broad range of higher education at various degree 

levels being offered across the U.S. The Commission has been recognized by 

the U.S. Department of Education since it began recognizing accrediting 

agencies many years ago. The Commission believes that it is providing an 

important service to its membership by engaging in the regulatory process and 

voluntarily submitting to review by the Department in order to be recognized 

as a gatekeeper agency. 

The Commission acknowledges that, in the past, federal regulations 

governing the recognition of accrediting agencies have, in general, fairly 

asked accreditors to demonstrate their appropriate stewardship of the task 

41
entrusted to them of assuring for public benefit the quality of institutions 

to which they have granted status. It is in the spirit of maintaining this 

fair and balanced inquiry in the regulatory process that I offer my comments 

on a few areas in the new provisions of the law affecting the recognition 

process for accrediting agencies. 

First of all, due process. The Commission has a longstanding commitment 

to procedural fairness and due process in every aspect of its processes, but 

particularly in processes that result in the actions to withdraw or deny 

accreditation. However, the Commission believes that it is very important for 

the agency to continue to be able to withdraw or deny accreditation and to be 

able to do so in a reasonably timely manner. Excessively stringent 

regulations related to due process could have the effect of significantly 

slowing the process and prolonging the ability of institutions that may no 

longer qualify for accredited status to retain that status and to continue to 

recruit and admit students while doing so. We cannot imagine that that result 

is one that Congress, the Department, or the public would want. After much 

debate during the legislative process about the appropriate extent of due 

process that should be afforded to institutions, Congress seems to have 

struck a reasonable balance between approaches that were suggested by various 

parties. We would urge the Department to accept the moderate approach 

outlined by Congress to allow agencies to take various approaches reasonable 

to the agency and not expand the expectations of due process beyond the clear 

boundaries set in the new provisions of the law. 

Secondly, transfer credit. The language in the Act seems to set a clear 

expectation that accreditors confirm that an institution has transfer of 

credit policies that are publicly disclosed and include a statement of the 

criteria established by the institution regarding the transfer of credit 

earned at another institution. This is a new regulatory demand both for 

accreditors and for institutions. While we are willing to rise to meet the 

challenge and believe that our institutions will do so as well, we ask the 

Department to move with some caution in drafting regulations on a topic that 

was very controversial during the legislative process. While there may be 

voices that urge the Department to craft regulations that add more 

specificity, we believe the language in the Act is clear on its face, and 

there is no need for regulations that provide additional refinements or 

reopen some of the concerns expressed by institutions about retaining their 

autonomy to make reasonable decisions about the quality of academic credits 

provided by individual students transferring into their institutions. 

42
Thirdly, distance education. Distance education is a complicated and 

rapidly changing phenomenon in higher education. There is an increasing level 

of expertise developing in higher education from such organizations as WCET 

and from individual--key individuals who invested professional careers in 

understanding and advancing quality distance education. It's important that 

accreditors have the freedom to work both with their institutions and with 

these experts to implement accrediting approaches that provide reasonable 

rigorous authentication of students while at the same time taking account of 

appropriate privacy implementation and cost concerns. Excessively detailed or 

prescriptive regulations, especially ones that may be drafted before there 

was a clear understanding or consensus on how best to approach this challenge 

may very well move how both higher education and accreditation--into 

approaches that do not provide the most long-term, effective solution to the 

challenge of student authentication. 

We urge the Department to remember the report language that indicates 

that Congress did not intend to mandate a specific methodology or technology 

in this area. 

Finally, we ask the Department to adopt flexible rules, not only in 

relation to technology and methodology, but also in relation to timetable. It 

will take some time for accreditors and institutions to move beyond passwords 

and ID cards, but we believe that working together with the Department in a 

flexible regulatory environment, we can achieve appropriate solutions for the 

challenge of authenticating students in ways that protect students and the 

public. 

Finally, monitoring institutional growth. The Commission acknowledges 

that it accredits some of the institutions that have experienced some of the 

most significant growth in recent years. We are mindful of our current 

responsibility under provisions of the law that continue, in effect, to 

ensure that these and all other institutions the Commission accredits remain 

in compliance throughout the institution's accreditation period with all the 

Commission's accrediting standards. 

To fulfill this obligation, we are already collecting large amounts of 

financial and non-financial data, including enrollment data and conducting 

follow-up monitoring in relation to this data. The Commission also has 

substantive change policies that allow it to take special steps to review 

certain types of institutional growth and that mandate monitoring of growth 

of sites where significant enrollment growth is also likely to occur. In 

43
short, we are already monitoring extensively in multiple ways that relate to 

institutional and enrollment growth. 

While there is a sense in this new legislation that enrollment growth 

at accredited institutions is a concern, we wanted to remind the Department 

that enrollment growth, where conducted responsibly, can mean that more 

students have access to education at accredited institutions. Increased 

access for students is an important national goal, as this Department has 

already indicated. Regulatory approaches that lay out a detailed framework 

that institutions and accreditors must satisfy before an institution may be 

permitted to grow or that require an accrediting agency to set quantitative 

thresholds for growth or limitations on growth, or that even control or halt 

growth under certain circumstances, would be burdensome for the Commission to 

implement, but, more importantly for accredited institutions, likely to have 

a chilling effect on the expansion of access to higher education. We would 

urge the Department to adopt a flexible regulatory approach that allows 

recognized agencies to build on policies and procedures already in place and 

that are based on accreditors' judgment of institutional individual's 

history, and the knowledge that the institution gain through the peer review 

process. If the regulations do permit a flexible regulatory approach on this 

topic as we are requesting, we would also ask the Department staff at all 

levels to adopt a consistent approach that does not stray from the plain 

meaning of the regulation as it evaluates the compliance of individual 

agencies over the next few years. As many of you know, an enormous challenge 

for accreditors in recent years has been interpretations of regulations that 

not only differed from one Department staff member to another, but seemed 

significantly to extend or even violate the plain meaning of the regulation. 

Such an environment creates uncertainty, not only for accreditors, but for 

institutions that go about the important task of trying to educate students. 

In conclusion, I want to express the commitment of regional accreditors 

to work with the Department through the negotiated rulemaking process, to 

achieve appropriate regulations that accreditors and institutions can 

effectively and flexibly address, and that will also meet the needs of the 

Department. Accreditors, both regional and specialized, can provide the best 

input on how we do our work and how our work can be adapted to meet the 

demands of the new legislation. Accreditors stand willing and ready to work 

with the Department to meet the expectations of these legislative changes, 

and to stimulate the best results in our accredited institutions. 

Thank you very much. 

44
MS. McLARNON: Thank you. 

MR. MADZELAN: Thank you. Julie [sic.] Joseph-Silverstein. 

MS. JOSEPH-SILVERSTEIN: Good morning. It is my pleasure to officially 

welcome you to Cuyahoga Community College. We're honored to have been chosen 

as a site for these hearings. 

My career spans over 20 years working at university commuter campuses 

and the community college, institutions that often serve large numbers of 

students for which financial aid plays a crucial role in their-- 

MR. MADZELAN: Excuse me. Just, can you state your name and who you 

represent, just for our transcriber. 

MS. JOSEPH-SILVERSTEIN: I'm sorry. My name is Jacquelyn JosephSilverstein. I'm the Executive Vice President for Academic and Student 

Affairs at Cuyahoga Community College. 

In my current role as the Executive Vice President for Academic and 

Student Affairs, a significant portion of my work is dedicated to ensuring 

not only that our students have opportunities to access higher education, but 

also that they are provided with the programs and support services that are 

needed for them to successfully achieve their goals. I appreciate the 

financial support you have provided to assist our students in meeting their 

educational goals. During the last academic year, 2007-2008, 12,216 Cuyahoga 

Community College students received approximately $43 million in federal 

grants and student loans. The vast majority of federal funding is from the 

Pell Grant Program. Others from our institution will be giving testimony 

later in the day. The sections of the law that are related to year-round Pell 

Grant funding, veterans issues, Federal Work Study, and college admissions 

requirements certainly demonstrate a federal commitment to college access. 

I'm very pleased to see the changes made to the Pell Grant Program that 

provide year-round access to these funds for students. The literature shows 

that student retention and ultimately graduation is positively correlated 

with summer enrollment. Thus, these changes not only impact student access to 

education, but will impact student success as well. 

Community colleges face real challenges as the numbers of under 

prepared students who face many competing personal responsibilities and 

financial issues come through our doors. We take our responsibility to help 

these students successfully complete their education very seriously. As a 

participant in the National Community College Initiative founded by the 

Lumina Foundation that is called Achieving the Dream, Cuyahoga Community 

College has extended its access mission to include students' success, and has 

45
a number of programs and services to this end. Ultimately, public colleges 

and federal government share the goal of educating students, enabling them to 

make positive contributions to our global society. 

Thank you very much. 

MR. MADZELAN: Thank you. Chuck Knopfle. 

MR. KNOPFLE: Hello, my name is Chuck Knopfle. I am the Assistant 

Provost and Director of Student Financial Assistance at Miami University here 

in Ohio. 

Miami is one of 13 four-year public universities in Ohio. We have three 

campuses: our main residential campus in Oxford, our regional commuter 

campuses in the cities of Hamilton and Middletown. Miami, which will 

celebrate our 200th anniversary in the upcoming year, enrolls 21,000 students 

and we manage a federal Title IV aid budget exceeding $75 million. First and 

foremost, let me thank you and the Secretary for your efforts over the last 

two years to bring us excellent guidance in relation to the College Cost 

Reduction Act, and the Ensuring Continued Access to Student Loans Act. 

I understand how much time has gone into the changes you've been asked 

to manage, and please know how much we appreciate your efforts. From the new 

ACG, SMART, and TEACH Grants, to the recently increased Federal Stafford Loan 

limits, not only have I found the guidance to be delivered in a timely 

fashion, but I and my staff feel that the details have been covered 

sufficiently for our needs. Today, I'd like to give my thoughts on a few 

provisions in the Higher Education Opportunity Act of 2008. I hope that you 

take my comments into account when the various negotiated rulemaking 

committees are established and charged. I'd like to start with the topic of 

lender lists and Sunshine laws as covered in Sections 152 and 153. Miami 

University applauds the effort our Congress has made in ensuring that 

students are informed of any relationship or agreement between schools and 

lenders. It's critical for us to regain the lost confidence that we've seen 

nationwide from students. It's imperative that the process of negotiated 

rulemaking not water down the language as currently written. Students need to 

know that schools are fully disclosing all aspects of the process by which we 

choose the lenders that we recommend to students and their families. The law 

as written provides that assurance, and I hope it is fully implemented as 

intended by our elected officials. 

On that same note, however, I believe there could be an unintended 

consequence of some language in Section 154. Miami, a Direct Loan school, 

would fall under the provisions of this Section. As currently worded, it 

46
could possibly be concluded that individual Direct Loan schools will be 

required to provide the loan disclosure to students that is currently allowed 

to be provided by lenders in the FFEL Program. Please don't misunderstand me: 

I think being upfront and disclosing full loan terms to students is critical, 

both in direct lending and in FFEL; however, the administrative burden of 

providing that disclosure should remain with either the lender or the 

guarantor which, for direct lending schools, is the Department of Education. 

Second, I'd like to focus for a minute on the issue of private or nonfederal loans. I have to admit that I was disappointed with the provisions in 

the Reauthorization Act addressing private loans. Specifically, I was hoping 

to see legislation that eliminated direct-to-consumer loans by requiring all 

education loans to be approved by a school's financial aid office. I also 

encourage you to consider making the same disclosure requirements of private 

loans that currently exist for Stafford and PLUS. Hopefully, there's enough 

flexibility in the regulations as passed to allow these important changes to 

the ever-increasing and financially dangerous private loan market. 

Third, I ask the Department take full advantage of the wording in 

Section 473 that allows the Secretary of Education to work closely with the 

IRS to create a simplified student aid application process. It seems to me 

that such an arrangement is a win-win-win for families, schools, and the 

Department. Families get to file a greatly simplified FAFSA form, schools 

virtually eliminate the verification process, and subsequent financial award 

changes, and the Department will find that it will not need to process nearly 

as many FAFSA change records. 

And finally, as you go forward with the selection of negotiators for 

negotiated rulemaking hearings, I urge you to choose at least one negotiator 

whose primary role is to represent direct lending schools. As a direct 

lending institution looking at the makeup of past negotiated rulemaking 

groups, I've seen individuals from lenders, guarantors, and even from 

associations created by the lending community. As I've said earlier, with the 

Department of Education as our lender, and with its committed position of 

non-favoritism for the discussions between direct lending and FFEL, it is not 

possible for our lender to represent the needs of the direct lending program. 

I ask that a member of the National Direct Student Loan Coalition be asked to 

serve in this capacity for any negotiated rulemaking group that will tackle 

loan issues. 

47
Thank you for the opportunity to speak to you today. I find it 

reassuring that we are being asked to provide input for this all-important 

phase of reauthorization. 

MR. MADZELAN: Thank you very much. 

MS. McLARNON: Thank you. 

MR. MADZELAN: Well, we have come to the end of our list for the 

morning, but we do have some people who have signed up for the period 

immediately after lunch, and I'll see if they're in the room now and would 

like to speak. So, I'll see if Jackie Fairbairn is here. Yes, she is. And if 

she would like to speak, she may come forward. And again, just as a reminder, 

would you again state your name and the organization you're with for our 

transcriber. 

MS. FAIRBAIRN: Good morning. My name is Jackie Fairbairn. I'm the 

Director of Policy and Regulatory Compliance for Great Lakes Higher Education 

Guarantee Corporation. 

Great Lakes is a private, nonprofit corporation that administers the 

Federal Family Education Loan Programs, otherwise known as FFEL. As a leading 

guarantor of student loans for over 40 years, Great Lakes is a nonprofit 

guarantee agency serving over 2 million student loan borrowers, 2,700 schools 

and 1,400 lenders across the Nation. We work with these students, borrowers, 

schools, lenders, and community organizations to change lives for the better 

through higher education. Our mission is to make the dream of education a 

reality by providing financial education and operational support at every 

stage of the educational journey. 

To begin, Great Lakes endorses the testimony given by Shelly Saunders 

on October 8th, representing the National Association of Student Loan 

Administrators, otherwise known as NASLA. Great Lakes strongly believes that 

negotiators should be seated who are closest to the operating level that will 

be most directly impacted by the regulatory framework. NASLA's membership is 

comprised of the four of the largest guarantee agencies in the country, and 

all of the original VFA guarantors, and is the singular organization 

representing unbundled standalone guarantors. 

As a private, nonprofit, voluntary membership organization, NASLA has 

been an effective voice for student loan guarantors whose mission is to 

ensure consistent and reliable student loan services to America's students, 

parents, and postsecondary education institutions. As such, Great Lakes 

supports the call for NASLA to be represented in the negotiated rulemaking 

activity. In addition, Great Lakes believes that the implementation of the 

48
Higher Education Opportunity Act through the negotiated rulemaking process 

presents an excellent opportunity to revise federal regulations toward 

enhancing borrower benefits, simplifying student loan borrowing, and 

promoting successful loan repayment. 

In that regard, Great Lakes endorses and supports the issues identified 

by NASLA, and encourages the Department to focus on improvements to the 

regulations that increase borrower access to critical default prevention 

services, loan forgiveness and discharge entitlements, and that strengthen 

but do not unduly burden our collective oversight responsibilities. 

In addition to our support of the issues raised by NASLA, Great Lakes 

also supports the following additional list of issues for negotiation, and 

I'm only going to mention a few of them; the rest of them were in the NASLA 

testimony. The first is the Income Based Repayment Program. Despite the 

success of last year's negotiated rulemaking, the discussion with respect to 

Income Based Repayment Program, otherwise called IBR, was quite complex and 

there was limited time to fully consider whether the draft regulations might 

contain any unintended consequences. One such consequence has come to our 

attention related to IBR eligibility, and we are concerned that others may 

surface as the community works to implement the new IBR repayment plan. The 

specific consequence deals with the proposed regulations in 682.215(a)4 that 

outline the eligibility criteria for a partial financial hardship, which is 

the nexus of the IBR Program. 

According to the regulatory language, the loan holder must use the 

borrower's payment amount as calculated on a ten-year repayment plan to 

determine eligibility. We believe that the negotiators agreed with the 

requiring lenders to use the ten-year repayment plan that is calculated at 

the time the borrower initially enters repayment under the belief that using 

these initial payment amounts would avoid disparate treatment of borrowers. 

However, as we work to implement the IBR plan, we now believe this decision 

may negatively impact many borrowers for whom IBR would be provided--the 

relief intended. In some cases, a determination of eligibility for IBR will 

be based on old data that is no longer relative and no longer demonstrative 

of a borrower's ability to pay. As such, we contend that lenders should be 

required to use the greater of the ten-year monthly payment amount 

established at the time the borrower initially enters repayment or the 

monthly payment amount in effect at the time the borrower requests IBR. 

We have examples that I have provided in writing to you at the end of 

my testimony that will help illustrate this point, and the cohort of 

49
borrowers who would be ineligible for the full benefit of IBR unless IBR 

regulations are again examined and the unintended consequences of the 

existing regulations are appropriately revised. The next issue is economic 

hardship deferment eligibility and the treatment of non-taxable income. Great 

Lakes believes the economic hardship deferment regulations regarding the 

option for a borrower to provide his monthly income to demonstrate 

eligibility for this deferment requires clarification. Section 682.210(s)6vii 

of the regulations define monthly income as either the gross income amount of 

income received by the borrower from employment and other sources, or onetwelfth of the borrower's adjusted gross income as recorded on the borrower's 

most recently filed federal tax return. If the borrower submits information 

from his or her tax return, the figure utilized in the calculation to 

determine hardship eligibility reflects the IRS instructions for determining 

AGI, a figure that does not include non-taxable income. 

The instructions define this non-taxable income as child support, life 

insurance proceeds, gifts, and bequests. However, it is not clear if these 

non-taxable sources are to be excluded when a borrower is providing the 

lender with the gross amount of monthly income received from employment and 

other sources. Some in the loan community define other sources to include 

child support, and as a result, this source is used when determining the 

eligibility for economic hardship deferment. We would like the Department to 

consider revising the regulations that clarify the monthly income used for 

determining economic hardship deferment eligibility be treated the same as 

one one-twelfth of the AGI, limiting it to income that is taxable and not 

including non-taxable income such as child support, insurance proceeds, 

gifts, and bequests. We believe excluding non-taxable income, regardless of 

whether the borrower is providing monthly income statements or tax filing 

documentation is consistent with the intent of the regulations, and therefore 

requires clarification. 

The third issue is total and permanent disability and its eligibility 

criteria. As mentioned, Great Lakes supports the comments made by NASLA with 

respect to the implementation of the new statutory standard for meeting the 

eligibility requirements for total and permanent disability discharge. We 

also concur with NASLA's belief that the Higher Education Opportunity Act 

provides an opportunity to revise regulations to reflect a more reasonable 

discharge standard for all borrowers, as well as address several subjective 

and onerous processing standards that have created undue hardships for our 

most vulnerable borrowers. In addition to identifying and tracking the 

50
subjectivity and subsequent negative repercussions of the current process on 

otherwise eligible borrowers, Great Lakes has been working with student 

advocacy groups to develop alternative methods that we feel would 

simultaneously result in a higher quality of service and improved oversight 

to protect against fraud. 

We encourage the Department to consider us a valued resource and 

partner in the disability discharge process, and we would appreciate the 

opportunity, through the negotiated rulemaking process, to share these 

alternative methodologies in detail. 

The fourth issue, and final, is direct-to-consumer private loans and 

student protections. Great Lakes endorses the comments made by the Institute 

for College Access and Success with respect to private direct-to-consumer 

student loans. We also believe that the Department should do as much as 

possible to assure the highest level of counseling and disclosure is provided 

to help students and their families distinguish between private loans from 

federal student loans. We further encourage the Department to maximize all 

opportunities to tie these DTC loans into the school certification process, 

and we agree that increased oversight is needed to protect against fraud and 

abuse. All of these efforts are necessary to ensure the lowest level of nonfederal borrowing. We also believe that guarantors in their role as borroweradvocates should support these counseling and disclosure requirements, and we 

encourage regulatory guidance toward that end. 

Thank you. 

MR. MADZELAN: Thank you. Margaret Richards. 

MS. RICHARDS: Good morning. My name is Margaret Richards, and I'm a 

Client Services Representative in the Midwest Region at EDFUND. 

EDFUND is a not-for-profit public benefit corporation and one of the 

Nation's leading providers of student loan guarantee services under the 

Federal Family Education Loan Program. EDFUND offers students a wide range of 

financial aid and debt management information while supporting schools with 

advanced loan-processing solutions and default prevention techniques. 

EDFUND was founded in 1997, and in 2006-07, processed more than $9.3 

billion in student loans, and we manage a portfolio of outstanding loans 

valued at more than $30 billion. EDFUND is based in California, and we 

operate with regional representatives such as myself located throughout the 

Nation. I am pleased to be with you here today to discuss just a few issues 

that are of particular importance to EDFUND and the schools, families, and 

students we serve. I will keep my comments brief here today, but will let you 

51
know that we will be submitting additional written testimony covering these 

topics and a few additional issues. 

Before I address the specific issues on behalf of EDFUND, I would like 

to take this opportunity to applaud the U.S. Congress for reauthorizing the 

Higher Education Act through the passage of the Higher Education Opportunity 

Act. I would also like to applaud the Department for moving so quickly with 

the negotiated rulemaking process. 

We at EDFUND believe the law contains many new provisions that will 

continue to open the doors of opportunity for millions of American families, 

and we look forward to working with you in conjunction with our trade 

associations to implement the new law in the best interest of the students 

and families we serve at the forefront. 

The first topic I'd like to discuss relates to entrance and exit 

counseling activities performed by lenders and guarantee agencies in 

conjunction with school personnel. Language included in Section 493(e) of the 

HEOA explicitly states that entrance and exit counseling activities are not 

considered a gift under the gift ban section. The law also explicitly allows 

lenders and guarantors to perform exit counseling service in Sections 422(d) 

and 436(c) under the supervision of school personnel. Conversations with 

congressional staff have indicated that they believe the language adopted in 

the HEOA permits lenders and guarantors to provide both entrance and exit 

counseling. Based on the legislative citations provided and the express 

congressional intent, we request that the Department modify its regulatory 

position on guarantors and lenders performing both entrance counseling and 

exit counseling on behalf of any institution that requests it. EDFUND 

believes that allowing lenders and guarantors to assist both Direct Loan and 

FFEL schools with entrance and exit counseling activities is good for 

schools, good for the loan programs, and most importantly, good for students. 

As financial aid offices are increasingly stretched for resources, 

lenders and guarantors are best equipped to provide the most comprehensive 

and accurate information to student borrowers on the specifics of their loan 

obligations, and what options and programs federal, state, and institutional, 

exist to ensure a successful repayment experience. Additionally, some of the 

new repayment options and program benefits available to borrowers will 

require more than sound-bite-type counseling for borrowers to fully 

understand the options available to them. The new Income Based Repayment 

option, for example, may require significant explanations from knowledgeable 

staff in order for borrowers to understand how to fully take advantage of the 

52
new program, a goal I believe we all agree is important. We suggest the 

Department align its regulations with the HEOA and with the congressional 

intent with regard to entrance and exit counseling performed for any FFEL or 

direct lending institution that may require assistance. 

The second topic I'd like to address relates to a new provision in the 

law that requires schools with cohort default rates of 30 percent or more to 

assemble a default prevention taskforce that will create a default prevention 

plan to be submitted to the Secretary. EDFUND, along with our guarantor 

colleagues, believes we can play a valuable role in this process, working 

directly with schools to develop strategies to lower their cohort default 

rates. Guarantors have consistently demonstrated that we play an important 

role in assisting students to successfully manage their student loan debt. 

The growing importance of this role has been emphasized by increased 

requirements for guarantee agencies to provide financial literacy information 

and other resources to both schools and students, showing our agencies to be 

knowledgeable and effective, trusted agents. 

A school with a higher-than-desired default rate likely does not have 

the resources and experience needed to effectively assist its particular 

constituencies avoid delinquency and default. By including the guarantee 

agency in the taskforce designed to help the school develop and implement its 

default prevention plan, schools are able to take advantage of existing 

resources and expertise as well as ensuring that these default prevention 

plans become effective tools as intended. Guarantors can help them find the 

best tools and implement solutions based on what we know and learn in the 

field from others. 

Additionally, we can act as a third party to help facilitate the 

discussion and we are seen as the trusted advisor so we can guide the 

direction and help schools focus their goals. The financial aid office should 

not be the only department on campus held accountable for defaults. Until the 

entire campus community understands its role, students will continue to fall 

through the cracks, and some will default on their student loans. 

The financial aid office will need support from an outside, neutral 

party to get the discussion going and gain support of other campus officials. 

A guarantor can help in this process. Guarantors could also work with the 

Department globally to help develop some default management plan best 

practices that can be provided to both FFEL and direct lending schools 

nationwide. The two topics I have addressed here today represent two 

opportunities for the Department to strengthen the student loan programs by 

53
utilizing the demonstrated experience of the guarantor community to better 

serve postsecondary institutions and the students we all serve. 

Thank you for the opportunity to speak with you today. Any questions--

or that's not been any questions? 

MR. MADZELAN: Thank you very much. 

MS. McLARNON: Thank you. 

MR. MADZELAN: We're going to go ahead now and break for lunch, and we 

will reconvene at 1:00. 

Thank you. 

[Recess.] 

54
AFTERNOON SESSION 

MR. MADZELAN: Welcome back. We will continue the hearing at this time, 

with Nina Turner. Nina. And again, as a reminder, please, when you come to 

the podium, state your name and where you're from and who you represent for 

our transcriber. 

MS. TURNER: Good afternoon, ladies and gentlemen. My name is Nina 

Turner. I am a professor here at Cuyahoga Community College, as well as a 

Senator for the State of Ohio. And it certainly is an honor to have the 

opportunity to discuss today the issue of financial aid, its challenges, and 

opportunities. 

Again, I speak today as a person serving two roles: in my capacity as 

an educator at Cuyahoga Community College, as well as a State Senator 

representing the concerns of over 330,000 Ohio residents. In both roles, I 

hear many personal stories from students and their families who are 

attempting to pay for day-to-day expenses and afford a college education. The 

challenges impacting Ohio families--college access has received recent media 

attention. On August 25, 2008, USA Today published an article entitled 

"College Work to Keep Students in School Until They Earn Degree." Governors 

of several states, including Ohio, Arizona, and Michigan made a commitment to 

produce more college graduates to meet workplace demands. One of the numerous 

challenges for college students to surmount is obtaining the funding to 

complete a college degree. 

On September 9, 2008, the Crest News reported that, based upon a July 

survey by the National Association of Student Financial Aid Administrators, 

more than 90 percent of financial aid administrators were concerned about the 

student loan crunch. On September 14, 2008, MSNBC reported on a story 

entitled "Ohio Housing Market Troubles Spill into Financial Aid Offices." 

Many Ohio families, as well as families nationally, are finding it difficult 

to leverage private student loans. While these loans should be a last resort, 

some students and their families need these funds to bridge the gap to pay 

for college expenses. This difficulty, as all of us understand, is rooted in 

the international credit crisis. Even before this epidemic became apparent to 

the rest of the Nation, the Greater Cleveland area was in the eye of the 

foreclosure tsunami. The negative impact of this situation has ravaged our 

neighborhoods and now threatens to sabotage our future growth. We can, 

however, change this trajectory with investment in our human capital. 

55
At the Euclid Chamber of Commerce Business Development Luncheon last 

week, Ohio Board of Regents Chancellor Eric Fingerhut talked about the goals 

of the university system of Ohio. I believe these goals are at the pinnacle 

of our future progress as a state. They are, number one, graduate more 

students from our colleges and universities. 

Number two, keep our graduates in Ohio. 

And Number three, attract more talent to our region. It is critically 

imperative that we work vigilantly to provide an environment that cultivates 

young minds. This cultivation is the catalyst for a strong Ohio, a stronger 

America, and stronger world. Moving forward, an unshakeable commitment at the 

state level to work towards the goal of keeping educational costs affordable 

while maintaining a quality educational experience and producing more college 

graduates is priceless. 

Cuyahoga Community College is a committed partner in this regard. Just 

as important, however, is continued federal support for college students to 

assist states in meeting their goals. As a first-generation college graduate 

from a poor family, a family of a single mother and seven children, I 

understand how important it is to have access to grants, to scholarships, and 

to loans. With the proper guidance, investment, and direction, people from 

all walks of life can overcome seemingly insurmountable odds. And I want to 

share with the members that I myself should have been a statistic. My mom had 

seven children. She was not a college graduate, and studies show that I 

should have had a house full of children and no college education. But it is 

because of places like Cuyahoga Community College that first-generation 

students like myself had an opportunity to surmount those obstacles, and 

surmount them I did. And it is because of relationships with professors and 

teachers and administrators who really care--surmount those obstacles, I was 

able to. So, the mission is clear: Government must increase its efforts 

through the vehicle of economics and public policy to provide access for 

young people to obtain a college education. And although times seem bleak 

right now, I do believe that there is promise in the problem. I, in my 

capacity as an educator, as a legislator, and as a mother of a college 

student at Youngstown State University, I remain committed to helping others 

live out their greatest greatness, using education as the prime medium to 

reach their goals. 

I thank the members of the U.S. Department of Education for this 

opportunity. I thank you for coming to Greater Cleveland area, and 

56
particularly Cuyahoga Community College, and I am happy to answer any 

questions that you may have. 

 Thank you. 

MR. MADZELAN: Thank you. 

MS. TURNER: Thank you. 

MR. MADZELAN: Tina Royal. 

[Pause.] 

MR. MADZELAN: Let's see. Paul Frank. Paul. 

MR. FRANK: I apologize for not having copies of my remarks. I've been 

sketching them out through most of the day, but I will be sending in a copy 

to the Department. 

My name is Paul Frank. I'm the Director of Government Relations for the 

Federation of Independent Illinois Colleges and Universities. Our association 

represents 58 nonprofit private institutions that enroll more than 204,000 

students in Illinois. Our institutions include very large research 

institutions with international reputations that you've heard of, the largest 

private college in the Midwest, and many small liberal arts institutions, 

also. The private colleges in Illinois, together, are now larger than the 

public university system in Illinois. We enroll more students, produce more 

graduates annually. We've become an important foundation and an important 

choice for students in Illinois and throughout the Midwest, and nationally 

and internationally, of course. 

In Illinois, we're in the midst of a public agenda planning process, 

creating a new future map for higher education in our state. We're looking at 

all the issues that the Congress has been looking at in recent years that 

culminated with the passage of this opportunity act, but our state finances 

are in peril, that's creating a growing affordability gap, and we like to 

refer to it as an affordability lag. There is a significant disparity--a 

significant increase in how much college affordability has decreased in the 

past ten years. It used to be our state grant program would help needy 

students afford 100 percent of public university tuition, and as much as 30 

percent of tuition at some of the private institutions. That grant program 

now affords about 60 percent at the public universities due to the increases 

in tuition and lack of ability to increase those grants. And at the private 

institutions, it's down to about 20 percent. Luckily, our institutions 

contribute a significant amount of institutional resources to grant aid. And 

despite the increase in the use of loans, our students--our graduates 

generally graduate with only about $3,000 more in debt than public university 

57
graduates do. So, we're quite proud of the work that our institutions do to 

help needy students from all backgrounds attend. 

The rest of my comments would be directly towards, hopefully, the 

future of what the Department is going to do with this legislation and the 

rulemaking. Our institutions have asked us to remind you that sometimes when 

it comes to reporting requirements and definitions and data collection that 

less is more. We believe that this bill is definitely going to add to 

operating costs of colleges and universities. It's going to be especially 

burdensome on some smaller institutions that don't have the staff with excess 

workload capacity. The burden of new reporting requirements in this bill is 

very large. Of course this is the law now, but please bear in mind that the 

bill did also make some steps to ease this burden, and that includes the 

usage of existing IPEDS definitions when possible, converting some of the 

provisions that started off as mandates into institutional reporting 

requirements, and using new tools like posting on campus websites instead of 

necessarily submitting reports to the Department. 

We urge the Department and all of those involved in negotiation of the 

rules to keep in mind simplicity is a good rule of thumb, and to use existing 

definitions continuing--going forward, when possible. It's going to help ease 

implementation on the campuses where staff resources are limited sometimes. 

We also urge you to please select legitimate representatives of the 

interested parties and associations. Certainly, we have a particular type of 

institution that we represent as well as the national associations that we 

belong to. We have heard from our institutions, our presidents, that in 

recent years negotiators with very narrow perspectives have been selected to 

represent broader sections of the higher education community. This can 

sometimes be a disservice not only to the community, but to the 

representatives themselves who are put in untenable positions and end up 

being torn between organizations that they may be employed by or that they 

represent and the broader sectors of higher education. 

We urge you to select negotiators who will accurately and directly 

represent the various sectors of our higher education system. And lastly, 

regarding the illegal downloading of files, we were disappointed that the 

Higher Education Opportunity Act singled out higher education institutions 

with regard to this activity, the illegal downloading of files. Most of this 

activity does not occur on college campuses. That said, the rules of this 

section will have an impact on the operation of our information networks in 

terms of staff, time, cost, and network stability. It's important that the 

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Department get the implementation of this section right. Please avoid a onesize-fits-all approach. Institutions require a great deal of flexibility in 

how they deploy technology, and how the deploy efforts to combat 

infringement, and how they offer alternatives. 

That concludes my remarks. We thank you for your time, and I've enjoyed 

my visit here in Cleveland. 

MR. MADZELAN: Thank you. Tina Royal. Thomas Klecan. Rob Bird. 

Those are the people that we have signed up for this afternoon who have not 

yet spoken. At this point, we'll just recess until one or more of these 

persons arrive and provides testimony. So, as I said, we'll recess for the 

moment and we will reconvene when our next speaker arrives. 

 Thank you. 

 [Brief recess.] 

MR. MADZELAN: Let us reconvene and ask Tina Royal to come and speak. 

MS. ROYAL: Hi. Thank you. 

MR. MADZELAN: Thank you. 

MS. ROYAL: Good afternoon. My name is Christina Royal, and I am the 

Executive Director of Distance Learning at Cuyahoga Community College. We 

have a very robust distance learning program at my institution. Our 

accreditation is through the Higher Learning Commission, and it was recently 

expanded to include some fully online degree programs. 

The reauthorization of the Higher Learning Act includes language that 

accreditors' verify that colleges take some steps to establish that the 

student who registers for a distance education course or program is the same 

student who participates, completes, and receives academic credit for that 

course or program. I believe it's important that we do not create a double 

standard in higher education by specifically addressing this issue for only 

distance learning. Many institutions, including Cuyahoga Community College 

have the exact same learning outcomes applying to courses whether they are 

taught in the classroom or via distance learning. And while the pedagogical 

approaches to teaching and assessment in a classroom-based and a distance 

course may differ, the expectation for meeting the learning outcomes is the 

same regardless of the delivery mode. 

I would encourage you to consider looking at policies and practices in 

place for the traditional classroom before considering a separate standard 

for authenticating students in distance learning courses or programs. I would 

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also ask that you consider pedagogical approaches in addition to 

technological solutions when considering issues of authentication of students 

in all types of courses, including distance learning. Knowledge of best 

practices to ensure high quality and integrity of a distance course or 

program, research on student success in distance and online learning, and 

technological advances of the systems through which distance and online 

courses are offered have evolved substantially in the 21st century. 

Distance learning and specifically online learning has earned the 

respect as an equal to its classroom counterpart, and the policies and 

practices established at the federal level should reflect this. I would also 

encourage you to consider this approach when looking at not only academic 

issues such as authentication of students in classroom and distance courses 

and programs, but also when reviewing Student Support Services, including 

financial aid. 

Thank you for your time. 

MR. MADZELAN: Thank you. 

MS. McLARNON: Thank you. 

MR. MADZELAN: Thomas Klecan. Please help me with your surname. 

MR. KLECAN: Klecan, it's fine. Good afternoon. My name is Thomas 

Klecan. I have been a firefighter with the city of North Olmsted for over 29 

years, and the Fire Chief of the Department for the last six. 

I am here today speaking on behalf of the Ohio Fire Safety Coalition, 

and as an ex-Board Member of the Northeastern Ohio Fire Prevention 

Association, and as past President of the Northeast Ohio Fire Chiefs 

Association. I've been concerned with public fire safety for over 20 years, 

and I will be speaking specifically about the language pertaining to Campus 

Fire Safety Right to Know. The language for Campus Fire Safety Right to Know 

was first proposed as legislation in the year 2000 following a fire at Seton 

Hall University, which killed three students, and injured over 50 others. The 

legislation, when finally passed in 2000 received bipartisan support. This 

new law requires schools to report fire safety information annually to the 

Secretary of Education. This information is to be included, but not limited 

to, the number of fires, number of fire injuries and fatalities relating to 

fires, damaged caused by fires, number of beds protected by sprinklers and 

fire alarms, and the amount of fire safety training provided to the students. 

In addition, the Secretary of Education is to compile a list of best 

practices. All of this information is to be made publicly available. The 

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primary focus currently is on on-campus residence halls, and does include 

off-campus housing or housing not owned by the schools. 

The information is intended to assist prospective parents and students 

to evaluate the level of fire safety at a school and to have this information 

included in the decision-making process when selecting a school. Public 

disclosure of this information will allow for a more level playing field by 

requiring uniform reporting, and additional will encourage schools to 

improve, if necessary, the safety components they currently have in place 

thereby improving fire safety for students, faculty, and visitors. Most, if 

not all, schools already have this information on hand; however, in the past, 

reporting of it was voluntary only and there were no uniform means of 

reporting. This allowed schools with poor fire safety practices to ignore or 

gloss over their poor practices. 

Today, many schools have already started compiling and posting this 

information. Other schools have taken even stricter measures to ensure 

student safety. Unfortunately, many of those have done so following a 

catastrophic event which cost several lives. After almost 30 years in the 

fire service, I have learned that most fires are preventable, and with the 

technology available today, the fires that do occur are increasingly more 

containable. Many people, especially our young people today, are quite naïve 

to the real destructive power of fire. As a society, we have almost totally 

contained that destructive nature; however, movies and television take quite 

dramatic license in portraying impossible situations for the purpose of 

entertainment, yet yearly we are tragically, and often fatally, reminded of 

fire's destructive nature. I am here to remind you of Congress' intent when 

crafting your rules as they pertain to campus fire safety. I wish I could 

stand here and report that there was no need for this legislation, but there 

is. 

I do, however, have a great deal of hope that, with the proper rules 

and regulations in effect, we will some day in the very near future ensure 

that the safety of every student at school is as good or better than his 

safety at home. 

Thank you for your time. Do you have any questions? 

MR. MADZELAN: Yeah, I was wondering if I could ask you to comment on 

something, and after you comment, I'll tell you why I asked-- 

MR. KLECAN: Okay. 

MR. MADZELAN: --if that's okay. I'm wondering, in your experience, 

what--I'm interested in learning about relationships between colleges and 

61
universities and local fire departments. And you probably know that, for a 

number of years now, here in the Education Department, we've been collecting 

from institutions the Clery Act crime statistics. And that's been pretty 

successful and a part of that is due to the fact that many campuses have 

police departments. I'm guessing there aren't too many campuses that have 

fire departments. I'm sure there's one or two out there somewhere, but--so, 

again, I'm wondering if you could talk a little bit about your experience 

there. 

MR. KLECAN: Sure. Most schools rely on the municipality in their 

location to provide them with fire protection, and it is a big issue. The 

State of Ohio has mandated in new construction of dormitories to be 

sprinklered, which is a great thing. Unfortunately, we have a lot of older 

schools and a lot of off-campus housing. 

The relationship between the fire departments and the schools runs the 

gamut from very, very good to sometimes quite poor. Sometimes it's the fault 

of the fire department, sometimes it’s the fault of the school, and somewhere 

in the middle. I think both the schools and the fire departments want to 

ensure the safety of the students and the faculty and the visitors as best 

they can, and I think this is a good step in providing that. 

MR. MADZELAN: And the reason for asking that is, again, going back to 

collecting our crime statistics. I mean--because many campuses do have police 

departments. That kind of--that reporting to the Department, which schools 

were never required to do before, and we implemented it via electronic means, 

a Web-based data collection tool. That's--and again, we're just thinking not 

so much rules but process, if that eight or ten years ago, when we first 

started doing this, we knew that cops knew about computers because they've 

been dealing with them for a long time. And so, I guess--again, I ask the 

question more in the context of a process issue around ensuring that the 

reporting by colleges and universities on fire safety, those specific 

categories that you mentioned--that we will be able to accomplish that in a 

way-- 

MR. KLECAN: Right. In our own industry, we recently went to a "nearmiss" reporting system, where we went with the fire service and accidents 

that were missed but could have been severe, and you would be surprised how 

often the statistics as they proved out--and they are now taking that data 

and looking at changing certain procedures and tactics, because too often 

we're missing the boat and we're incurring too many near misses, and 

eventually one of those will become a fatality that we could have prevented. 

62
I agree. I think the statistics, once they come out, will start to show 

that maybe the problem is a little more--a little larger than it's been 

portrayed to be, and that's not unlike the general public, either. 

In the State of Ohio, we are required to report any unfriendly fire 

which starts as a means--and probably 80 to 90 percent of those go unreported 

every year. So, it will help to ensure student safety and that of the faculty 

and staff and visitors. So, I applaud this legislation. 

 Thank you. 

MS. McLARNON: Thank you. 

MR. MADZELAN: Rob Bird is not in the room at the moment, but he is 

actually scheduled for a little bit later this afternoon. 

So, again, at this time we'll take a recess, and when our next speaker 

is ready to speak, we will reconvene. 

 Thank you. 

 [Brief Recess.] 

MR. MADZELAN: We will now reconvene and hear from Rob Bird. And Mr. 

Bird, when you come up, please state your name and who you represent for the 

record here. 

MR. BIRD: I'd like to thank everybody for their patience. I realize 

there was a bit of a timing issue. 

Good afternoon. My name is Rob Bird, and I'm the President and founder 

of Red Lambda, a software security company based in Orlando, Florida. 

I've worked in technology in education for over 15 years. I used to be 

the Network Architect at the University of Florida prior to founding Red 

Lambda. And I've also served as an expert witness to the U.S. Congress 

regarding the mitigation of peer-to-peer file sharing, as well as advising 

the technical committee for the joint committee of higher education and the 

entertainment industry. I'd like to thank the Department of Education for 

giving me the opportunity to speak to the HEA at provisions that address the 

use of university computer networks for illegal file sharing. 

My purpose here today is not to go over that problem one more time; I 

think that's been discussed quite a bit, but what I am here to do is to 

discuss some of the great successes that have been had by people trying to 

implement technology controls. 

For a little background, I founded Red Lambda in 2005 after licensing 

my own technology from the University of Florida. It was something that we 

63
had developed there to combat illegal file sharing on campus, and it was a 

rampant problem just like it was everywhere else. 

The software called Integrity was developed in conjunction with the 

Student and Faculty Senate, campus educators, and psychologists from the 

campus counseling center. Our hope was to develop a solution that would 

change user behavior and promote the educational mission of the university in 

the process. 

Integrity was designed with three goals in mind: It had to preserve the 

privacy and academic freedom of the network users while making them 

accountable for their behavior. It had to be able to detect any type of peerto-peer behavior, whether it was encrypted or not. And it had to be flexible 

enough to adapt to changing policies, applications, and network 

infrastructure. Since then, Integrity has continued to evolve to meet the 

diverse needs of university administrators, shaped by both our customers and 

the input from the higher education community. 

To highlight what is possible with technology controls, I would like to 

share the exceptional results achieved by two of our customers, the 

University of South Florida and the University of Florida. Although they are 

only separated by about a hundred miles, and part of the same university 

system, the approaches taken to the file sharing problem and how they would 

solve it by those two institutions could not be more different. In fact, it 

is their remarkable success in spite of this difference that I believe makes 

the application of technology control so compelling. At the University of 

Florida, the school chose to prohibit the general use of P2P, using case-bycase exceptions to provide flexibility for faculty and students. The judicial 

affairs staff elected to implement a three-strikes policy, with escalating 

punitive enforcement for repeat offenders to be applied automatically by 

Integrity whenever P2P was detected. 

When first deployed, Integrity's impact was staggering. Bandwidth use 

was reduced by 85 percent. The Digital Millennium Copyright Act complaints, 

DMCA complaints were reduced to zero, and in fact they've never received 

another one since 2003, and recidivism, perhaps the must useful statistic for 

determining the impact on user behavior was reduced to less than 10 percent. 

In stark contrast, the University of South Florida chose not to 

restrict the use of P2P in any way, which is completely opposite of what the 

University of Florida did, instead opting to advise students in real time who 

were using P2P that they could be exposing themselves to unintended 

liability. Integrity took no punitive action against anyone. Instead, 

64
automating the communication with the student when activity was detected. The 

results were just as dramatic at USF as they were at UF. And in fact, USF, 

who was ranked number three on the RIAA worst offender list, dropped to 

number 233 in their first month alone. What's even more interesting about the 

University of South Florida is the fact that they chose to only protect their 

dormitory network. So, over 90 percent of the campus was left unprotected, 

and yet they were able to have such a tremendous impact on the greater use of 

file sharing on the campus, simply by advising people that they could be 

exposing themselves to liability. While each school chose to solve the 

problem in different ways, their solution really shared three vital 

components: accountability via identity, consistency, and immediacy. What is 

clear from these examples is that it is possible to use existing technology 

to preserve academic freedom, privacy, and collaboration while drastically 

reducing or eliminating the abuse of file sharing. 

What is also interesting to note is that both schools had previously 

updated their policies, created educational materials, and special programs 

all in the hopes of educating students and changing behavior, all to no 

avail. To quote one university student that we spoke to when I was initially 

employed at the University of Florida, he said, "Well, we knew that no one 

was actually looking, so why care." As we explore solutions to the challenges 

faced by universities, it is vital that we not vilify P2P as a technology in 

the process. We must be cognizant of the fact that P2P is merely an enabling 

technology, one which will have broad implications for the future of 

computing. 

Ironically, Integrity, our software, is itself a P2P application, 

albeit one used for security. Instead, we must focus on better ways to 

provide universities with the transparency and accountability required to 

effectively administer policy. That's what it really comes down to. Policies 

are written for people; they're not written for IP Addresses, and that's 

fundamentally the challenge that administrators face. 

We look forward to continuing to work with the higher education 

community, and to continue to provide affordable and effective solutions to 

file sharing. 

Thank you. 

MR. MADZELAN: Thank you very much. Well, we, at the moment, have no 

other speakers signed up for this afternoon. 

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We will take a recess until 3:00, maybe a little bit--it would be a 

little bit sooner if another speaker comes up, and then, at 3:00, we'll 

assess where we are. 

 [Brief recess.] 

MR. MADZELAN: At this time, we have no more speaker signed up to speak, 

so we will adjourn this hearing. But before I do so, again, I want to thank 

all of the persons who came out today and shared their ideas and their 

thoughts around how we should go about--we, the Education Department--should 

go about regulating the reauthorization of the Higher Education Act. 

And again, once more, I just want to extend our thanks on behalf of the 

Department, to Claire Rosacco and her team here at the Cuyahoga Community 

College for providing us with this wonderful venue to hold our hearing. So, 

with that, I will ask my colleague Gail if she has anything to add. 

MS. McLARNON: No, I would simply echo Dan's comments. Again, a big 

thank you to Claire and her staff, and our Webmaster, and our transcribers, 

and our signer, and all of the folks that made this a very successful 

hearing. Thank you very much. And we will certainly take all the comments 

that we heard into consideration as we move forward and hopefully organize 

some negotiating teams and write--what would be our next step--another 

Federal Register Notice letting the public know what our plans are. 

Again, thank you very much to everyone. 

MR. MADZELAN: And with that, we are adjourned. 

[Whereupon, at 3:02 p.m., the public hearing was adjourned.] 

66