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BARRIERS TO EQUAL EDUCATIONAL

OPPORTUNITIES: ADDRESSING THE

RISING COSTS OF A COLLEGE EDUCATION

HEARING

BEFORE THE

COMMITTEE ON 

EDUCATION AND LABOR

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

HEARING HELD IN WASHINGTON, DC, NOVEMBER 1, 2007

Serial No. 110–70

Printed for the use of the Committee on Education and Labor

(

Available on the Internet: 

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

(II)

COMMITTEE ON EDUCATION AND LABOR 

GEORGE MILLER, California, Chairman

Dale E. Kildee, Michigan, Vice Chairman 

Donald M. Payne, New Jersey 

Robert E. Andrews, New Jersey 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Lynn C. Woolsey, California 

Rube ́n Hinojosa, Texas 

Carolyn McCarthy, New York 

John F. Tierney, Massachusetts 

Dennis J. Kucinich, Ohio 

David Wu, Oregon 

Rush D. Holt, New Jersey 

Susan A. Davis, California 

Danny K. Davis, Illinois 

Rau ́l M. Grijalva, Arizona 

Timothy H. Bishop, New York 

Linda T. Sa ́nchez, California 

John P. Sarbanes, Maryland 

Joe Sestak, Pennsylvania 

David Loebsack, Iowa 

Mazie Hirono, Hawaii 

Jason Altmire, Pennsylvania 

John A. Yarmuth, Kentucky 

Phil Hare, Illinois 

Yvette D. Clarke, New York 

Joe Courtney, Connecticut 

Carol Shea-Porter, New Hampshire 

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

Ranking Minority Member 

Thomas E. Petri, Wisconsin 

Peter Hoekstra, Michigan 

Michael N. Castle, Delaware 

Mark E. Souder, Indiana 

Vernon J. Ehlers, Michigan 

Judy Biggert, Illinois 

Todd Russell Platts, Pennsylvania 

Ric Keller, Florida 

Joe Wilson, South Carolina 

John Kline, Minnesota 

Cathy McMorris Rodgers, Washington 

Kenny Marchant, Texas 

Tom Price, Georgia 

Luis G. Fortun ̃ o, Puerto Rico 

Charles W. Boustany, Jr., Louisiana 

Virginia Foxx, North Carolina 

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

Rob Bishop, Utah 

David Davis, Tennessee 

Timothy Walberg, Michigan 

Dean Heller, Nevada

Mark Zuckerman, Staff Director 

Vic Klatt, Minority Staff Director 

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C O N T E N T S 

Page

Hearing held on November 1, 2007 ........................................................................ 1

Statement of Members: 

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

Pennsylvania, prepared statement of .......................................................... 69

McKeon, Hon. Howard P. ‘‘Buck,’’ Senior Republican Member, Committee 

on Education and Labor, prepared statement of ........................................ 69

Miller, Hon. George, Chairman, Committee on Education and Labor ......... 1

Prepared statement of ............................................................................... 2

Statement of Witnesses: 

Alexander, F. King, president, California State University, Long Beach .... 30

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

Bassett, Dr. John E., president, Clark University ......................................... 10

Prepared statement of ............................................................................... 12

Additional submissions: 

‘‘About Clark University’’ .................................................................. 16

‘‘Enhancing Affordability and Access in Independent Higher Education’’ .............................................................................................. 16

‘‘U–CAN Media Coverage’’ ................................................................. 27

Wellman, Jane V., executive director, Delta Project on Postsecondary 

Costs, Productivity and Accountability ....................................................... 3

Prepared statement of ............................................................................... 6

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BARRIERS TO EQUAL EDUCATIONAL

OPPORTUNITIES: ADDRESSING THE 

RISING COSTS OF A COLLEGE EDUCATION 

Thursday, November 1, 2007

U.S. House of Representatives 

Committee on Education and Labor 

Washington, DC

The committee met, pursuant to call, at 11:01 a.m., in room 

2175, Rayburn House Office Building, Hon. George Miller [chairman of the committee] presiding. 

Present: Representatives Miller, Kildee, Payne, Andrews, Scott, 

Woolsey, Hinojosa, Tierney, Kucinich, Wu, Davis of California, 

Bishop of New York, Sanchez, Sestak, Loebsack, Altmire, Yarmuth, 

Hare, Clarke, Courtney, McKeon, Petri, Castle, Ehlers, Platts, Keller, McMorris Rodgers, and Foxx. 

Staff present: Tylease Alli, Hearing Clerk; Alfred Amado, Legislative Fellow for Education; Jeff Appel, GAO Detailee; Denise 

Forte, Director of Education Policy; Ruth Friedman, Senior Education Policy Advisor (Early Childhood); Gabriella Gomez, Senior 

Education Policy Advisor (Higher Education); Lloyd Horwich, Policy Advisor for Subcommittee on Early Childhood, Elementary and 

Secretary Education; Lamont Ivey, Staff Assistant, Education; 

Thomas Kiley, Communications Director; Danielle Lee, Press/Outreach Assistant; Ricardo Martinez, Policy Advisor for Subcommittee on Higher Education, Lifelong Learning and Competitiveness; Stephanie Moore, General Counsel; Alex Nock, Deputy 

Staff Director; Joe Novotny, Chief Clerk; Rachel Racusen, Deputy 

Communications Director; Julie Radocchia, Education Policy Advisor; Dray Thorne, Senior Systems Administrator; Margaret Young, 

Staff Assistant, Education; Mark Zuckerman, Staff Director; Kathryn Bruns, Minority Legislative Assistant; Amy Raaf Jones, Minority Professional Staff Member; and Sally Stroup, Minority Deputy 

Staff Director. 

Chairman MILLER [presiding]. The committee will come to order 

for the purposes of conducting a hearing on Barriers to Equal Educational Opportunities: Addressing the Rising Costs of College Education. 

We are going to be in a bit of a time jam here, and in the name 

of trying to make this a coherent hearing, we have agreed that we 

are going to forego our opening statements. 

We all are in agreement on both sides of the aisle that this is 

a priority for this committee on how we address both paying for 

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college and checking the best we can this rapid rise in the cost of 

college. It has been a priority for Mr. McKeon, for Mr. Tierney, for 

Mr. Keller, for Mr. Hinojosa and many other members of the committee, but I think we would all be best served by hearing from you 

first before the bells ring, and then we will return after the votes 

are taken. 

And, Ms. Wellman, we are going to begin with you, but I have 

to tell people who you are here. So I will get that sorted out. 

Maybe, Ms. Wellman, you want to tell people who you are. 

Our first witness will be Jane Wellman who is the executive director of the Delta Project on Postsecondary Costs and Productivity 

and Accountability. The Delta Project is analyzing college spending, 

seeking to document trends, identify and promote best practices to 

help institutions improve productivity. 

Next, we will have Dr. John Bassett, who has served as president of the Clark University in Worcester, Massachusetts, since 

2001. Before assuming that position at Clark University, Dr. Bassett was the dean of the college of arts and sciences at Case Western Reserve University and an English professor and the department chair of North Carolina State University. 

Is Ms. Sanchez here for purposes of introduction? 

Ms. SANCHEZ. Thank you, Mr. Chairman, and I appreciate the 

opportunity to allow me to introduce Dr. King Alexander. 

Dr. Alexander is the current president of the California State 

University at Long Beach, one of the largest 4-year universities in 

California, and prior to his current post, Dr. Alexander served as 

the president of Murray State University in Kentucky. He is a 

foundation fellow at Harris Manchester College, University of Oxford, and a faculty affiliate at both the Cornell University Higher 

Education Research Institute and the University of Illinois Institute of Government and Public Affairs. He has over 15 years of experience in the field of higher education and has co-edited several 

books and authored numerous journal articles and book chapters. 

I am very pleased that he is able to join us here today, since he 

is from my home state and from very close to my district, and I 

am sure you will find him as engaging as I do. 

Chairman MILLER. Thank you. 

And welcome to all of you. 

We are going to give you each 5 minutes to sort of summarize 

your testimony. There will be a green light on, and then there will 

be an orange light to warn you that you are getting close to wrapping up, and then a red light, but we want you to finish your 

thoughts and your sentences there. 

So welcome again to the committee. 

Ms. Wellman, we are going to begin with you. We need your 

microphone on.

Prepared Statement of Hon. George Miller, Chairman, Committee on 

Education and Labor 

Good Morning. 

Welcome to today’s hearing on ‘‘Barriers to Equal Educational Opportunities: Addressing the Rising Costs of a College Education.’’

New data just released by the College Board show what is by now an all-too-familiar trend. In the last five years, tuition at four-year public colleges nationwide 

soared by 31 percent, after inflation. And whether a student attends a public college 

3

in-state or out-of-state, a private college, or a two-year college, the bad news is that 

prices are up across the board. 

To help meet these rising costs, students are relying more than ever on both federal and private student loans. Worse yet, each year as many as 200,000 would-be 

students choose to delay or forego a college education because they simply can’t afford it. 

These trends aren’t just troubling for students and families, but also for our country’s future. Now more than ever, the strength of our economy rests on our ability 

to produce a highly educated workforce. 

Business leaders tell us that the most important thing we can do to drive the innovation we need in today’s global economy is to ensure that all students have access to a good education. 

One of the key priorities for this Congress has been to make college more affordable and accessible for every qualified student who wants to attend. Already this 

year, we took a truly historic step towards this goal by enacting the College Cost 

Reduction and Access Act. This law does more to help students and families pay 

for college than any federal effort since the GI Bill of 1944. It provides more than 

$20 billion in financial assistance to low-and middle-income students and families 

over the next five years. 

I believe this law will help lead our country in the right direction by expanding 

college access—and doing so at no new cost to taxpayers. 

But there is still work to be done in order to ensure that no student is prevented 

from going to college because of the price. Increasing financial aid for students addresses one side of families’ ledgers; today we will address the other side—cost. 

As we move closer to reauthorizing the Higher Education Act, one of our goals 

will be to develop strategies to help colleges rein in increases in costs. 

It is clear that as consumers of higher education, students and families need better information about college pricing, and the reasons behind tuition increases from 

year to year. 

As we examine how best to further address these rising costs, we must learn more 

about how colleges and universities set their prices and the factors that drive their 

various cost increases. We also must learn more about how both schools and states 

spend their higher education dollars and the relationships between college costs and 

education quality. And we must look at the roles of federal, state, and local governments in helping to keep college affordable. 

Today we will hear about these different elements of the college cost equation. We 

will also learn more about practices that are already being used by some states and 

colleges to help keep college costs manageable. 

I want to thank all of our witnesses for joining us today for this important discussion. 

I also want to recognize two members of our committee, our Senior Republican, 

Mr. McKeon, and one of our senior Democrats, Mr. Tierney, who have put forth interesting proposals to address college costs. Today’s hearing will help us build on 

their efforts. 

A college degree continues to be the gateway to joining the middle class. I look 

forward to continuing the work of this Committee and of this Congress to help ensure that all Americans have the opportunity to go to college. 

Thank you. 

STATEMENT OF JANE V. WELLMAN, EXECUTIVE DIRECTOR, 

DELTA COST PROJECT 

Ms. WELLMAN. Thank you very much, Mr. Chairman, members. 

It is a pleasure to be with you today. 

I appreciate the opportunity to share my views and some of the 

emerging work of the Delta Project on College Costs and Productivity and Accountability. 

I should say at the outset I come to this topic after almost 30 

years of work in higher education and public policy in the State of 

California, where I worked in the University of California and for 

the legislature for many years. With private colleges, I worked with 

the Independent College Association here in Washington, and then 

in nonprofit policy work for many years. 

4

And the topic of spending and how the money gets spent in higher education as contrasted to tuition or financial aid or revenues 

is the least well understood and analytically documented and, in 

my view, one of the most important things for us to collectively get 

our arms around, if we are to do a better job of ensuring access and 

affordability. So that is the reason for our work. 

I just want to make three basic areas of comments today. You 

have my prepared testimony. I will not read it, you will be happy 

to know. But just in three areas: First, why focus on this? What 

is the point? Secondly, a little bit about what the data say about 

trends and patterns across all of postsecondary education, and then 

I will finish with some comments on what the federal role might 

be going forward. 

First, the reason for the focus on costs is not an analytical exercise in data gathering. We can do that, of course, but the point is 

our country needs to increase educational attainment levels and 

postsecondary educational attainment levels by significant 

amounts, some say almost a doubling of baccalaureate degree recipients in the next 15 years, both for workforce needs and to maintain internal competitiveness. There is some dispute about whether 

the numbers are doubling or only 30 percent. No matter how you 

slice it, it is a huge increase. 

And even if we are successful in reversing some of the declines 

we have seen in state revenues and with the generous funding 

from the federal government in recent financial aid increases, it is 

hard to see how we are going to get that level of increased attainment under our current finance and production model, and this 

then raises the question of how can we do a better job of using the 

resources we have and obtaining greater attainment, and that 

means not sacrificing quality, not sacrificing access to low-income 

students and building the system we need. 

So it is about attainment. It is not about picking apart numbers. 

It is how do we use data to do a better job of getting kids through 

making decisions about that. 

The second point on the data and what the data say about trends 

in revenues and expenditures in postsecondary education: as you 

well know, we have a highly diverse system of higher education, 

and the patterns of resources between research universities, community colleges, privates, publics, proprietaries are so starkly different that other than this generalization, all other generalizations 

about spending in higher education are wrong. 

It is very important to look at the different sectors and to see 

what the patterns are, and so in the testimony, I have provided 

just some snapshots to give you a little bit of a visual about what 

those revenue structures look like between the public research universities, where their money comes from, masters’ associates, private research, private baccalaureate institutions. 

You will note none of the data in here speak to proprietary education for the simple reason that the data on proprietary schools 

is bad. It is getting better, but it is not good enough to get an historic lens on. It should be included in these numbers, and it is not. 

The most important point I would like to make about the data 

are on what is labeled Figure 3, and it shows a snapshot of what 

has been happening in the last 6 or so years, and what has been 

5

happening to tuition increases in contrast to spending, and where 

the money is going in broad patterns by types of institutions, and 

looking at these numbers, one begins to see the differences between 

cost and how institutions spend their money and price, what it is 

that is paid in the form of tuition. 

Just looking at the top line on this, by example, as a national average level in public research universities since 1998, in state undergraduate sticker prices went up 40 percent, an average of 

$2,200 roughly. Gross tuition revenues, the next line over, only 

went up 31 percent. The difference between the first column and 

the second column is largely what has been happening in tuition 

discounting and institutional financial aid. So looking at those two 

numbers helps you get a sense of those patterns. 

Moving over one more column, spending that goes to the direct 

cost of instruction—this is the proportion of spending within the institutions that is going into the classroom—increased by only 4 percent. So you note the big difference, 40 percent tuition increase, 

spending increase, particularly that went into the classroom, only 

a 4 percent increase in a 6-year period. 

Moving to the next column, you see full educational costs. What 

that means is spending on students that are not in the classroom, 

for instance, student services, academic support, libraries, computing. You get a little bit of the sense of where the money is 

going. 

The last column, the biggest increase in public research universities is attributable to research. 

So this gives you a broad aggregate sense of what the patterns 

have been in the last decade, prices going up in the public sector 

much more rapidly than spending, absolute spending reductions, as 

you see, over this period for public masters’ and community colleges, and the lowest rate of increase going directly into the classroom in those sectors, this despite double-digit tuition increases. 

The pattern in private colleges is quite dramatically different—

private, nonprofit colleges. There, tuition increases track spending 

much more closely, and you see increases in private institutions, 20 

percent tuition over this period, $7,600 average; increase in tuition 

revenue, 23 percent; spending of instruction, up; spending elsewhere, up. I will not belabor all of the rest of it. 

But this gives you some sense of what has been happening and 

the takeaways from it. The state funding constraints are significant 

contributors to tuition increases in public sector. Public sector tuitions are not going up because the institutions are spending money 

at that rate. It is because of a shift of cost shifting between state 

and tuition. Spending is going up, and state spending is going up. 

It is just not going up fast enough to keep pace with enrollment 

and inflation. Private institutions are paying more, spending more, 

charging more and spending more on the classroom. 

I see I have the red light on. So I will skip over some of the other 

points and conclude with just a couple of comments about the federal role, and that is that I do not believe the research supports 

the view that federal financial aid is contributing in a significant 

way to increases in tuition. There have been several studies done 

on that, and they all find the same thing. Now one can argue that 

any revenue availability contributes at some level to growing 

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spending because if the money is not there, it cannot be spent, and 

so I think one could concede that without finding a direct causal 

relation between federal financial aid. 

I think the federal government has obviously a huge interest in 

this topic, and in my way of thinking, at least two very important 

roles that can be played. The first is on data and analysis and public transparency about costs. The federal government has the best 

cost data. The IPED system is imperfect, but it is not that bad. The 

problem with it is that it is opaque, it is not maintained, it is not 

edited, and it is really only accessible to researchers who have time 

to get into it and work with it a lot in order to make any sense 

of it, and so the Spellings commission had a recommendation on 

that topic. I have put that in your text. I think they got that right. 

I think it is a matter of moving forward on it. 

Secondly, I think the federal government——

Chairman MILLER. I am going to ask you to wrap up, so we can 

get to your colleagues’ testimony. 

Ms. WELLMAN. Okay. I will stop. 

[The statement of Ms. Wellman follows:]

Prepared Statement of Jane V. Wellman, Executive Director, Delta Project 

on Postsecondary Costs, Productivity and Accountability 

Mr. Chairman and members, thank you for the opportunity to meet with you 

today. I am delighted to be able to join you today, to share my views about ways 

to tackle the college cost problem, based on the emerging work of the Delta Project 

on Postsecondary Costs, Productivity and Accountability. I want to focus my comments today on three issues: 1) the reasons for focusing on costs and productivity; 

2) data trends on spending patterns in postsecondary education, including the relation between spending and tuition increases; and 3) the federal role in tackling the 

root causes of cost increases in higher education. 

Why the focus on costs? Because higher education in the United States has a 

higher education productivity problem: • Our nation spends almost twice as much per student in postsecondary education as other countries, yet we are behind in graduation rates, and falling further 

behind as other countries are increasing educational attainment and success. To be 

sure, international comparisons do not always use similar measures; still they raise 

the question about how the US system can use existing resources to become more 

productive, to improve degree attainment without sacrificing access or quality. • Persistent gaps in enrollment access, and degree and certificate completion, 

among low income and minority populations threaten future economic competitiveness. Our number one performance challenge is to get more low income and minority students not just to, but through, college. Managing prices and costs has to be 

part of that equation, but we also need to do a better job of targeting resources in 

ways that increase student success. Policymakers and higher education leaders need 

to develop better ways of looking at spending and performance and then using the 

data to put resources behind areas that will increase student attainment. • Postsecondary education’s dependence on annual increases in revenues is putting higher education out of reach for many students and making it difficult for the 

federal government and states to keep pace with cost increases. Student tuitions are 

paying an increasing share of general revenues in all institutions, and public skepticism is rising about spending within higher education. Without greater public accountability for spending, and attention to managing growth in spending, policy 

makers will remain hesitant to support needed increases in funding for higher education. 

Trends in revenues and spending in higher education: where the money comes from, 

where it goes, and the relation between spending and tuition 

There is no single answer to the higher education ‘cost problem’—the issues in 

large urban community colleges bear almost no resemblance to well-endowed selective private institutions—so generalizations are risky. But we’re not going to tackle 

spending problems without having decent data about what those spending problems 

are. To do that, policy makers and institutional leaders need better data about 

spending and performance. The work of the Delta Cost project is designed to put 

7

spending information into the public domain, through regular reports about spending trends, and publicly accessible tools to give institutions, policy leaders, and consumers easily accessible ways to evaluate postsecondary spending patterns. We have 

recently a completed the first comprehensive analysis of trends in revenues and 

spending in this century. The work uses similar methodologies to the work done by 

the Congressional Commission on Costs, and a follow-up study commissioned by the 

National Center for Education Statistics (NCES) in 1998. Some highlights about 

what we have found: 

• Cost exceeds revenue from tuition. The cost of providing students with a college 

education exceeds the revenue schools receive from student tuitions. Figure 1 provides a snapshot of total revenues, by source, for 2005 and shows that total revenues per FTE for public research universities averaged a little over $40,000/student/

year compared to $16,700 for public masters’ universities, and just over $12,000 for 

public community colleges. This compares to $78,407 for private non-profit research 

universities, $26,705 for private masters’ level universities, and $36,653 for private 

baccalaureate institutions.

However, not all revenues are available for general purposes and as a result, the 

total volume of revenues mask resources spent on core educational activities. Colleges and universities get and spend money in areas that are ancillary to the educational teaching and basic functions even if they contribute to the educational experience. They are in the hotel business (residence halls), the restaurant business 

(food services), the building business (capital outlay, and grounds and buildings), the 

R&D business (organized research and community service), and the health care 

business (hospitals and clinics). Resources generated in these areas are fee-for service activities and the funds are not available for general purposes. The three primary sources of unrestricted revenues for both public and private institutions are 

tuition revenues, public appropriations from state and local government, and revenue from the combination of private gifts, earnings from endowments, and investment income. Looking only at the bottom three tiers of revenue on Figure 1 helps 

to show what those resources are. 

• Spending and tuition. Switching from revenues to spending, Figure 2 shows a 

snapshot comparing spending clustered into three broad areas: spending that goes 

directly into the instructional function (faculty salaries for teaching and departmental research); other educational costs (student services, and the proportion of 

academic, institutional and maintenance expenses that support instruction); and all 

other spending (primarily organized research, and institutional spending on scholarships). 


well1.eps
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FIGURE 2: MEDIAN EDUCATIONAL AND GENERAL (E&G) SPENDING PER FTE BY CARNEGIE

GROUP AND CONTROL, 2005

Figure 3 shows the patterns of spending in relation to tuition since 1998. Reading 

across the top line, you see the rate at which sticker prices increased, followed by 

net revenue from tuition, followed by spending in the three categories above (direct 

spending for instruction, other educational costs, and other spending). These numbers tell a good deal about the basic patterns. Total spending per student has gone 

down after adjusting for inflation since 1998 among public community colleges and 

masters’ institutions, but is up slightly in public research universities, and up by 

roughly two times the rate of inflation among private non-profit institutions.

In all sectors, net revenue from tuition is going up less rapidly than sticker prices, 

because of the growth in tuition discounting. Among public institutions, spending 

for instruction has increased relative to other categories in the research universities, 

but has declined in public masters and community colleges. The patterns are quite 

different among private institutions—where spending for instruction increased significantly, but even so, less rapidly than spending for other educational costs (advising, computing, and administration). 

• State funding constraints and tuition increases. Adjusting for enrollment increases and inflation, spending in public institutions has not increased significantly 

in the last decade. Nonetheless, tuitions have gone up by double digits. In public 

institutions, the primary cause of tuition increases has been that state funds have 

not kept pace with the combination of enrollment growth and inflation, even states 

they have increased funding. The structural budget problems that are squeezing 


well2.eps well3.eps
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higher education as a state funding priority are not expected to go away any time 

soon. This is not a temporary problem; it’s a long term situation. • Private fund-raising not benefiting the bottom line. Despite all the attention to 

fund-raising and capital campaigns, private unrestricted funds (from gifts, income 

from endowments and investment income) still comprise a very small proportion of 

revenues in most institutions. The much touted ‘‘privatization’’ of finance in higher 

education is really about increased reliance on student tuitions as a general source 

of revenue. As a result, students increasingly subsidize general institutional operations—including student aid (paying for other students), administration, and research. • Growing inequality: the rich getting richer? Resource disparities among different types of institutions are increasing, with real cost cutting in public two- and 

four-year institutions, flat spending in public research universities, and rising 

spending in private institutions. The spending gap between public and private institutions has never been larger. Competition between institutions is intense, and competition fuels increases in spending believed to be necessary to enroll the ‘‘best’’ students, and to recruit the top faculty. • There is no evidence that explicit attention to increasing productivity and controlling costs is a policy priority within institutions or in states. Despite repeated 

calls (Congressional Cost Commission; NACUBO Cost of Instruction Work; Spellings 

Commission) for more ‘transparency’ and better use of cost data within institutions, 

most institutions do not publicly document costs, or include information about 

spending and subsidies in public communications. A recent AGB/NACUBO survey 

shows that governing boards generally see little information about spending patterns; instead the focus is on growing revenues and meeting the market for tuition. 

Spending information is almost completely absent from state ‘‘report cards,’’ and on 

institutional web-sites offering consumer information. The focus remains on tuition 

and financial aid, not on how money is spent. 

• The bottom line? The accusation that spending in higher education is ‘out of 

control’ isn’t quite fair. Not all institutions are spending more, despite the shift in 

revenue from state funds to students. But it is clear that spending is going up in 

some sectors, for the simple reason that it can. In all institutions, student tuitions 

are paying a higher share of revenues, but these resources aren’t going into the 

classroom. The economic benefit from a college degree has never been higher, and 

students and families will do everything they can to get a college education. But 

there’s no evidence the resources are going to pay for student success or increasing 

degree attainment, and low income students are most at risk. It’s a funding trajectory that bodes ill for the future, and will require an unprecedented level of attention from policy makers and institutional leaders if we’re going to turn it around. 

Suggestions about the federal role 

The federal government clearly has an interest in increasing productivity in higher education—both to maintain the value of federal financial aid funds going to 

needy students, and to tackle the challenges of increasing educational attainment 

for all students. There are two areas where I believe interventions would make a 

difference: one is in information and data; the other is in incentives to states and 

institutions to do more to manage costs. 

On the data front: We need to pay as much or more attention to spending as we 

now do to fund-raising, tuition and financial aid. Regular transparent reporting 

about cost trends can help this. Despite imperfections, these NCES/IPEDS finance 

data are the best source for this information. They need to be made more accessible 

to lay users—through regular editing, routine publication, and an annual reporting 

on trends. The recommendation in the Spellings Commission report on this topic is 

right on from my perspective: 

‘‘The secretary of education should require the National Center for Education Statistics to prepare timely annual public reports on college revenues and expenditures, 

including analysis of the major changes from year to year, at the sector and state 

level. Unlike the data currently available, institutional comparisons should be userfriendly and not require a sophisticated understanding of higher education finance.’’

For incentives: history has shown that federal funding incentives make a difference in moving states and institutions in new directions. With a relatively modest 

investment of funds, the federal government can provide incentives to states to 

ramp up their oversight capacity of college spending, and to do more to tie increases 

in state appropriations to evidence that institutions are investing resources in improving student attainment. One model might be adopted from the recent effort 

through the Fund for Improvement in Postsecondary Education, working with the 

Association of American Colleges and Universities, in partnership with the public 

four-year institutions, to pilot innovations in student learning. Figuring out how 

10

that will work will take some discussion, it’s sure to be an idea that will be controversial in some quarters. But it will take some serious collective action to turn 

around the path we are on, to ensure that we have a financing system capable of 

meeting our nation’s needs now and in the future. 

Terminology 

All revenue and expenditure data come from the Integrated Postsecondary Education Data Surveys, special analysis developed by the Delta Cost Project. 

Auxiliary enterprises: revenue-generated activities, such as dormitories and bookstores. 

Direct instruction: spending going directly to pay for the instruction; primarily 

faculty salaries and benefits, including adjunct faculty, and costs of departmental 

staff. All credit and non-credit bearing instruction (such as developmental education) are counted as ‘‘instruction.’’

Full cost per student: educational or student-related spending other than instruction; such as student services, admissions and registrars, and non-research portions 

of academic and institutional support (administration), and operation and maintenance of the physical plant. 

Full education and general spending per student: all spending including research, 

public service and student scholarships, but excluding hospitals and clinics. 

About the Delta Project on Postsecondary Costs, Productivity and Accountability 

The Delta Project is a non-profit policy and research organization chartered in 

2007 with the mission of helping to improve college affordability by controlling costs 

and improving productivity. The Delta Project is focused on the spending side of the 

college cost problem—how institutional spending relates to access and success, and 

ways that costs can be controlled without compromising quality. The work is animated by the belief that college costs can be contained without sacrificing access, 

or educational quality, through better use of data to inform strategic decision making. Located in Washington, D.C., project work is supported by Lumina Foundation 

for Education and other national philanthropies as part of Making Opportunity Affordable, a national initiative focused on increasing college opportunity and success 

through increased productivity. This statement is the sole responsibility of the Delta 

Project, and does not imply endorsement of any partner organization or funding 

agency. 

For more information: admin@deltacostproject.org; or http://www.jff.org. 

Chairman MILLER. Thank you. 

Mr. Bassett? 

STATEMENT OF JOHN E. BASSETT, PRESIDENT, CLARK 

UNIVERSITY 

Mr. BASSETT. Thank you, Chairman Miller and Ranking Member 

McKeon and the other members of the committee. 

I appreciate the opportunity also to come and testify on these 

very, very important issues, and I also want to thank the committee for its work in increasing federal financial aid for students 

and particularly for the recent increase in the Pell grant. These are 

real questions about costs. There is no question. 

I am also testifying on behalf of the National Association of Independent Colleges and Universities, or NAICU, which is an association of over 1,000 private universities and colleges in America. 

But I have spent the majority of my life in the public sector, with 

14 years at Wayne State and 9 years at North Carolina State, so 

I feel sensitive to the issues in both the public and private sector. 

I have been asked to focus this morning some of my time on the 

issue of transparency, particularly since I was the one that chaired 

the NAICU committee that developed the U-CAN proposal, the 

University and College Accountability Network, and the seeds of UCAN actually lie in this committee, I think, when Congressman 

11

McKeon and others began to ask questions about the availability 

of information. 

We were somewhat frustrated, too, because we know that high 

school seniors and their parents are deluged with information 

about colleges, and we know that we submit the IPEDS to the government with, as you say, reams of paper with data, but there was 

no way that a family could get in a concise user-friendly format 

some comparable information in a concise manner about size of 

schools, about tuition, about financial aid, about emphasis of 

schools. 

And out of that came the initiative of NAICU. We began with 

focus groups made up of high school students and their parents 

from diverse economic backgrounds and tried to develop a compact, 

clear, concise user-friendly device with comparable information, 

and that really is what U-CAN is. 

Parents and students also wanted to know, ‘‘What is it that 

makes your school distinctive? What is it that makes you special? 

What is different about your school as well?’’ And so what you have 

posted up there on the wall, but also in your materials is—they 

have chosen my own university, Clark, as an example—is a twopage Web site—concise, clear—providing general information about 

things from tuition to financial aid to geographical distribution to 

number of students who graduated each year. 

But then also there are 47 data elements there, 25 hot links to 

things that are more specific about your college. ‘‘What do you students do when they graduate? What kind of careers do they go 

into? ‘‘What kind of community service are your students involved 

in?’’ And Clark students, most of them, are involved in the community, and so there is a whole page on community service. 

Since U-CAN was rolled out in the last week of September, there 

are now over 700 colleges and universities that have joined the UCAN Web site. We have had over 70,000 hits, about 418,000 pages 

being used. 

I think it is important to remember that this is only a starting 

point, that students will begin to narrow down the number of colleges they are really interested in at some point, and then they ask 

much more focused personal questions. ‘‘I am interested in premed. What kind of biology program do you have?’’ ‘‘I may want to 

play soccer while I am in college. Do you have a soccer team?’’ ‘‘I 

am interested in being involved in theater.’’ ‘‘What kind of accounting program do you have?’’ There is no two-page insert that can 

cover all of that, but this can help people know more about each 

specific college, what it can do, what its majors are, what programs 

it has. 

Still, we are left with some of the fundamental questions about 

costs, and let me turn to those briefly because prices are up. I 

looked at the Clark data. Our tuition between the mid-1990s and 

the middle part of this decade went up about 59 percent. Our financial aid went up about 64 percent per student in that same 

time period, which means we actually recouped less than the tuition increases provided. 

The main reasons for the great growth in tuition: costs—utility 

costs, health care costs, technology costs, insurance costs—and 

12

some of those went up well over 100 percent and the others close 

to 100 percent at the same time period. 

Higher education at its best, moreover, is very labor intensive. It 

is still 20 students and a professor, 30 students and a professor, 

40 students and a professor. You do not have the same kind of savings that you may have in certain kinds of productivity, in manufacturing, for example, from technology. 

Colleges are cutting costs. They are joining consortia. They are 

outsourcing. They are saving on energy. They are double-paning 

their windows. They are cutting the temperature in classrooms. 

And you have a compendium attached with a lot of what is happening in colleges. 

I will be brief in finishing up. Every year, moreover, colleges and 

universities also make cuts that they do not like to make because 

they impact quality. They replace a professor with part-timers and 

teaching assistants because they are having a hard time making 

budget. They increase class size. They cut library holdings. They 

cut counseling staff. 

In the private sector, it is a very tight market that all except the 

wealthiest universities are in. When we figure out what our budget 

of expenditures will be and then figure out what tuition increase 

a college can make, we will reach a tipping point where a further 

increase in tuition will have a negative impact on revenue. Those 

that cannot afford to pay will not come, and those that are getting 

financial aid will continue to get it. 

I still believe the best solution to these problems is a healthy 

partnership between colleges and universities, public and private, 

and the government and the state governments working together 

to get their arms around these issues. 

Thank you. 

[The statement of Mr. Bassett follows:]

Prepared Statement of Dr. John E. Bassett, President, Clark University 

Chairman Miller, Ranking Member McKeon, and members of the committee, I appreciate having the opportunity to testify today on the critical issue of college access, cost and pricing. This is an important topic and is one with which we all struggle. My name is John Bassett, and I am president of Clark University. 

I am testifying on behalf of the National Association of Independent Colleges and 

Universities (NAICU), which represents more than 1,000 private, non-profit institutions of higher education and related associations. NAICU membership reflects the 

diversity of private, non-profit higher education in the United States—including traditional liberal arts colleges, major research universities, church- and faith-related 

institutions, historically black colleges and universities, women’s colleges, performing and visual arts institutions, two-year colleges, and schools of law, medicine, 

engineering, business, and other professions. 

I recognize that many members of the Committee have some very real questions 

about why college costs so much—particularly in the private sector. I hope this 

hearing will help us find answers to some of those questions, and explore ways we 

might move forward, together, to ensure that all Americans can afford to go to college. 

First, I want to thank this committee for all you have done to fund the student 

aid programs. We deeply appreciate the bipartisan support this Committee has 

shown over many years for the federal student aid programs. We especially welcome 

the infusion of new funding coming into the Pell Grant program this year under 

Chairman Miller’s leadership. This increase will make an important difference, and 

we know that finding the resources to fund these programs in the face of competing 

budget pressures is a difficult task. 

I was asked today to focus on one aspect of access to college—the transparency 

issue. In particular, I have been asked to highlight a recent effort by NAICU. Five 

13

weeks ago the association launched U-CAN—the University and College Accountability Network—in response to the call of public policy makers for more userfriendly information about colleges. As the chairman of the NAICU task force that 

implemented this idea, I am particularly excited about what we have accomplished 

in a relatively short time, and on a comparatively modest budget. 

The seeds for U-CAN came from this very committee. For years, Representative 

McKeon has called for colleges to be more transparent about our prices. His goal 

was to assure that consumers have better access to simple, understandable information about the most important financial aspects of college attendance—such as patterns of tuition increases, the amount of available aid, typical student loan burdens, 

and graduation rates. 

As you know, we have not agreed with many of the cost-related proposals coming 

from this committee. We have, however, shared your frustration that mounds of potentially useful information sit largely unused. Colleges expend considerable effort 

and resources in compiling data for the federal government. 

Several legislative proposals were laid out as a clear path for the Department of 

Education to improve access to this kind of information through their COOL 

website; but—with the exception of the recent improvements made by the College 

Navigator—little action has been taken. Certainly, there were no signs of activity 

when, in the spring of 2006, we decided to attempt to develop a response to what 

we thought was this Committee’s vision for improved consumer information. 

We began by asking focus groups of parents and high school students to tell us 

what they most wanted to know about college. Their wish list that was remarkably 

similar, but not identical, to the College Consumer Profile that was included in this 

Committee’s recent Reconciliation bill, as well as in HR 609 from the last Congress. 

We also asked about format, length, and style. We learned that consumers wanted 

something that would be concise, consistent, comparable, and colorful. It needed to 

be Web-based, so that they could quickly explore various colleges, then drill down 

for more information in areas of special interest. However, they also wanted to be 

able to print out information on a college, then lay it on the dining room table and 

compare it with similar information from other colleges. 

The many end users we talked with were clearly more astute college evaluators 

than we sometimes appreciate. They appropriately regarded this kind of a consumer 

information tool as a starting point, not an end point. In other words, they want 

to begin by comparing colleges on-line, but ultimately want to refine their lists and 

make their decisions based on visiting campus, speaking with informed counselors, 

and weighing a college’s strengths against their expectations. This is a smart, costefficient approach, and one we applaud. 

Interestingly, the focus groups also asked us for something beyond comparable 

data. They asked us to find a way for colleges not only to be compared, but for each 

college to tell how it differs from its peer institutions—what, in the college’s view, 

makes it special or distinctive. 

The product that resulted from this year-long exercise is a two-page consumer 

profile that has a similar look and feel for each college. There is a wealth of consistently-presented facts and figures in those two pages. Beyond that, though, are brief 

blocks of narrative and a series of click-on buttons that allows each college to tell 

its story. One high school college counselor we talked with said, ‘‘I like to ask colleges that come in to visit me to tell me about the things they are most proud about 

on their campuses. Tell me the programs, the things that make you special. I want 

to know what they brag about, because that tells me about who they are.’’ A college’s U-CAN profile captures this kind of important qualitative information. 

There is a rich array of information—and paths to additional information—in the 

U-CAN profile as it was unveiled a few weeks ago. There are a total of 47 comparable data elements provided. Beyond that, however, there are 25 click-on buttons 

that link to various sections of the college’s Web site for additional details on areas 

of interest. The links cover the wide range of information that families told us they 

wanted to explore—everything from spiritual life to the surrounding community to 

campus crime reports. Included are some links that Congress is especially interested 

in as well, such as information on transfer of credit. We do not seek to rank schools. 

Rather, we believe that families should consider a wide range of institutions at a 

wide range of prices, as well as the highly visible brand-name colleges and universities. Such an approach is good for students, good for competition, and good for this 

nation. 

The U-CAN project is funded entirely from NAICU reserve funds. Neither participating colleges nor consumers are charged a fee. We are not seeking any federal 

funding, nor do we accept any advertising. NAICU and the participating institutions 

consider this effort a public service. 

14

It has been an enormous undertaking to get this new tool developed and launched 

in less than a year. However, more than 600 private colleges had signed up to participate by the time we launched U-CAN on September 26. We now have more than 

700 schools signed up, and the list continues to grow daily. This is a remarkable 

achievement when you consider that the total number of colleges and universities 

that belong to NAICU is 943 (we have an additional 65 association members). 

Though only five weeks old, the U-CAN Web site, www.ucan-network.org, has already become a busy gathering place for those seeking college selection information. 

Over 400,000 pages have been viewed so far by 60,000 visitors. 

College-going students can find U-CAN on Facebook, YouTube, and Wikipedia, as 

well as in Google search ads. We’re also about to mail information on the project 

to 2,700 high school guidance counselors, and we’re appearing on radio talk shows 

nationally—not just to promote U-CAN but also to help consumers find and use 

other tools for an informed college choice. 

We are learning as we go. What you presently see on the Web site is ‘‘U-CAN 

1.0.’’ We have a comprehensive feedback mechanism built into the site, so that we 

can gather user comments on problems and shortcomings, and can continue to improve our product in the coming months 

As proud as we are of U-CAN, we understand that this greater transparency, 

while important, does not answer all your questions about cost. Parents are increasingly anxious about how they will pay for their children’s education. We do hope 

that if they see how much aid is available, and understand the range of pricing 

structures even just within the private college sector, some of that anxiety will be 

lessened. However, this committee has many legitimate policy questions on price 

that I would also like to address. 

At it simplest level, prices have gone up because our annual costs have gone up, 

and because we are providing more services than ever. To be very specific, let me 

lay out some of the principal cost drivers for last year, as found in a survey of 

NAICU institutions. While this list changes somewhat from year to year, there are 

some cost drivers—such as health insurance and financial aid—that have perennially appeared on such a list for the past decade. • From 1994-95 to 2004-05, grant aid provided by private colleges increased 150 

percent, more than twice the rate of tuition (71 percent). • Since 2005, the price of utilities has risen 27 percent, according to the 

Commonfund Institute. This is almost triple the average annual increase over the 

previous four years. • The median increase for health care costs at colleges was 9 percent in 2005-

06, according to the College and University Personnel Association. • In recent years, annual premiums for many types of insurance, including general liability, property, and worker’s compensation, have commonly increased by 

double-digit rates. Experts expect property insurance to increase between 10 to 50 

percent in 2006, according to the Chronicle of Higher Education. 

• Periodicals and other library materials routinely increase by double-digit rates 

each year. The Association of Research Libraries reports that between 1986 and 

2004, research library expenditures for scholarly journals increased 273 percent. 

Next, let me tell you some of the ways institutions are organizing to counteract 

the effect of these rising costs, including innovative affordability and cost-cutting 

initiatives. There is, however, no single approach, because of differences in institutions’ mission, student population, and fiscal resources. 

To control operating expenses, institutions are: 

• Entering into consortial arrangements to reduce administrative and academic 

redundancies, and leverage their purchasing power to obtain lower costs for energy, 

insurance, information technology, and other services. 

• Outsourcing campus services, such as grounds and facilities maintenance, alumni relations operations, residence hall management, billing and other back-office 

functions, and bookstores. 

• Turning to environmentally friendly systems to lower energy consumption; 

streamlining staff; and consolidating offices and programs to enhance efficiency. 

• Increasing the revenue they receive through non-tuition sources, including philanthropic giving, and the selling and renting out of underused campus-owned facilities and properties. 

A compendium of college affordability, cost-saving, and consortial initiatives is 

posted on the NAICU Web site and is also attached to this testimony. 

Further, many of the state associations affiliated with NAICU are deeply engaged 

in collaborative efforts. Representative Petri has been particularly engaged in helping one of our most innovative and active states—Wisconsin—on their model statewide efforts to reduce costs. But other states are also undertaking similar efforts. 

In fact, a number of private college state associations have made such progress in 

15

this area that they have formed a separate non-profit called the Coalition for College Cost Savings to promote the power of collective action to drive better bargains 

on the cost of services at private colleges. Although this is not a NAICU initiative, 

it is a related response by the private college sector to the concerns of Congress. 

As many members of this Committee know, independent colleges believe that the 

best solutions to college access challenges come through our working in partnership 

with the federal government. We have opposed, and will continue to oppose, measures that we believe represent inappropriate restrictions on our ability to secure the 

revenues we need to maintain our financial security and improve our educational 

offerings—or any policy measures that threaten our ability to fulfill our distinctive 

missions. When Congress invests in the traditional student aid programs, it makes 

a real difference for our students. Indeed, welcoming students from all income levels 

to our campuses is not just something we want to be able to do—it is at the very 

heart of who we are. 

In this regard, we also want to address a grave misperception that exists in some 

public policy arenas today. Time and again we have heard the argument that somehow the federal investment in student aid drives up college prices. Exhaustive research has conclusively shown that this is not the case. Still, the misperception persists, so let me try today to put it in simpler business terms. 

When a low-income student arrives at our door, with the tuition glass partially 

full because of federal aid, it is less expensive for us to fill that cup. If it costs us 

less money to enroll that student, then there is less upward pressure on our student 

aid budget, and ultimately on our tuition. 

Formal research bears this out. For more than a decade, researchers have sought 

to determine whether a causal relationship exists between increases in federal student aid and increases in tuition. The conclusion reached is that there is no analytical evidence to support the existence of such a linkage. You have authorized several 

studies at the Department of Education on this question, and those findings have 

clearly indicated this not to be the case. 

One of the most authoritative studies on the topic was the 2001 Department of 

Education report, ‘‘Study of College Costs and Prices, 1988-89 to 1997-98,’’ which investigated whether federal or state student financial aid led directly to tuition increases. The study, and I quote, ‘‘found no associations between * * * federal 

grants, state grants and student loans and changes in tuition.’’

Then in 2003, the Department of Education prepared a summary of research related to higher education financing, ‘‘Congressionally Mandated Studies of College 

Costs and Prices.’’ That document highlights information from four major studies. 

While the studies address the issue of college pricing from several angles, together 

they clearly demonstrate the depth of research on this topic—with no evidence that 

federal student aid is impacting college prices. 

Mr. Chairman and Members of this Committee, thank you for this opportunity to 

give you an overview of U-CAN. I also want to assure you that we are hard at work 

to contain costs. We would welcome a further, national conversation about this matter, through which we look for constructive solutions that do not reduce innovation 

or educational quality. Finally, I want you to know how much we appreciate the 

continuous support you have all shown for the federal student aid program. 

[Additional submissions by Dr. Bassett follow:]

16

Enhancing Affordability and Access in Independent Higher Education

Price and Cost-Control Initiatives at America’s Private Colleges and Universities 

NATIONAL ASSOCIATION OF INDEPENDENT COLLEGES AND UNIVERSITIES

Enhancing Affordability—Replacing Loans with Grants; Reducing Expected Student 

and Family Contributions 

Over the past decade, private institutions have made themselves more accessible 

and affordable to students of modest means through unprecedented investments in 

their institutional grant programs. They have retooled institutional needs analysis 

formulas to reduce expected student and family contributions, lowered work expectations, and replaced loans with grants. 

Amherst College, Amherst, MA 

Amherst will replace all loans with scholarships in its financial aid packages beginning in the 2008-09 academic year. The policy will eliminate loans for all students. It will affect incoming students in the Class of 2012 and current students. 

In 1999, Amherst eliminated loans for low-income students. 


clark.eps
17

Baylor University, Waco, TX 

Baylor has increased grant aid and the percent of the need covered by institutional scholarships, and reduced student loan expectations. 

Brown University, Providence, RI 

Beginning with the class of 2003, students who qualify for institutional aid receive 

larger grants and smaller loans. It gives students with the greatest financial need 

approximately $17,000 in additional grant aid over four years. All students can now 

apply 100 percent of any outside grants toward the self-help portion of their financial aid packages, reducing loan or campus work expectations. 

Centenary College of Louisiana, Shreveport, LA 

Centenary offers the Centenary Affordability Program (CAP), which is open to all 

parents who qualify for a federal PLUS loan. For the four years their child is enrolled at Centenary, the college will pay the interest on annual loans of up to 

$15,000. A fixed rate payment option and four years of interest-free borrowing result 

in fast principal reduction. CAP can be combined with other financial aid for which 

a student may qualify. 

Columbia University, New York, NY 

Beginning in 2007-08, Columbia will eliminate the debt burden on students whose 

families earn less than $50,000 per year, replacing loans with grants. In 2007, an 

alumnus pledged $400 million, all designated for financial aid. It came a year after 

Columbia announced a $4 billion fundraising campaign to build an endowment for 

financial aid and faculty development. 

Davidson College, Davidson, NC 

Beginning in 2007-08, Davidson will eliminate loans from financial aid packages. 

Students will have their demonstrated financial need funded entirely through 

grants and student employment, and graduate debt-free. The policy applies to both 

incoming and upper class students. In 2006-07, Davidson capped student loans at 

$3,000 per year, increasing grants by whatever amount it reduced loans. 

Emory University, Atlanta, GA 

Beginning in 2007-08, Emory will replace need-based loans with grants for students whose parents earn $50,000 or less. Students whose families earn between 

$50,001 and $100,000 won’t have to take out more than $15,000 in loans over a 

four-year period. Emory will pay the rest. 

Gannon University, Erie, PA 

Gannon matches the state grants of eligible students from New York and Ohio. 

Harvard University, Cambridge, MA 

Since 2006-07, parents in families with incomes of less than $60,000 are no longer 

expected to contribute to the cost of their children attending Harvard. Harvard also 

reduced the contributions of families with incomes between $60,000 and $80,000. 

The new thresholds build on those announced two years ago, with eliminated expected contributions for families with incomes below $40,000, and reduced contributions for families with incomes between $40,000 and $60,000. The number of students enrolled at Harvard from these income brackets increased by 24 percent for 

the class entering fall 2005—the first full year of the program. 

John Carroll University, University Heights, OH 

John Carroll makes it possible for families making under $40,000 to enroll their 

incoming freshman tuition-free, effective for the 2007-08 academic year. Once federal and state aid eligibility is determined, John Carroll scholarship and grant aid 

will be awarded to cover the remainder of the cost, up to full tuition and fees. 

Lyon College, Batesville, AR 

Students transferring to Lyon from two local community colleges, who come with 

the dean’s recommendation and a 3.0 grade point average, will receive a scholarship 

that, combined with state and federal assistance, allow those living at home to complete their junior and senior years at a cost comparable to attending the two year 

institution. 

Massachusetts Institute of Technology, Cambridge, MA 

Since 2006-07, MIT has matched students’ Pell Grants, up to their maximum 

amount. Earlier, MIT revised its financial aid package to replace $2,000 in loans 

or work-study with grants for all students. 

18

Princeton University, Princeton, NJ 

Princeton no longer requires undergraduates on financial aid to obtain loans, providing grants instead. In addition, the summer earnings expectation for financialaid students was reduced, with the largest reductions for students from lower-income families. The amount that students are expected to contribute from their own 

savings was also reduced. Princeton’s calculation of expected parental contributions 

has been reduced by removing home equity from consideration (or giving an equivalent renter’s allowance to those who don’t own homes, but have other investments). 

As a result of these improvements, the portion of tuition covered by the average 

grant for a freshman aid student rose from 65 percent in 1997, to 90 percent in 

2006. 

Schreiner University, Kerrville, TX 

Schreiner pays the interest on federal Plus loans taken out by parents. 

Stanford University, Stanford, CA 

Since 2006-07, families with annual incomes of less than $45,000 have not been 

expected to contribute to the cost of tuition at Stanford, and the requirements for 

families earning $45,000 to $65,000 have been cut in half. In 2007, Stanford increased need-based financial aid by 15.2 percent, to $76 million annually, to assist 

students from middle-income families and reduce the sum parents are expected to 

contribute. It reduced the amount of home equity it assesses when calculating need, 

capping the amount at 1.5 times family income. An allowance is also made for renters. It also reduced the amount middle-income students are expected to borrow during the school year to $2,000 from $3,500. Both of these reductions will be offset 

by increased scholarship funds for students. 

University of Pennsylvania, Philadelphia, PA 

Since 2006-07, Penn replaces loans with grants for students of families earning 

less than $50,000. As a result, the highest-need students will each receive grant aid 

of more than $45,000 in 2006-07. The move coincides with a $6.3 million increase 

in Penn’s undergraduate financial aid budget for the coming academic year, with 

those funds targeted to middle- and low-income students. In 2005-06, the university 

reduced the summer savings requirement and increased allowances for incidental 

expenses for students from low-income backgrounds. 

Williams College, Williamstown, MA 

Several times in recent years Williams College has reduced what it expects students to borrow and has made up the difference with increased grant aid. Students 

in the lowest income bracket now have no loans at all. The next bracket borrows 

a cumulative total of $3,800 at graduation. The highest loan expectation is a cumulative total of $13,900 at graduation. 

Enhancing Affordability: Tuition Cuts 

Tuition cuts have been a small but growing trend over the past decade. In the 

five past years, a dozen have cut their list price. To date, one institution has cut 

tuition for 2007-08. 

International College, Ft. Myers/Naples, FL 

Cut tuition by 20 percent. 

The following reduced tuition in 2006-07. 

Alliant International University, San Diego, CA 

Cut tuition by 26 percent. 

Regions University, Montgomery, AL 

Cut tuition 42 percent. 

Enhancing Affordability: Tuition Freezes 

One-time tuition freezes keep an institution’s list price at the previous year’s 

level. These universities will not increase tuition for 2007-08. 

19

Beacon College, Leesburg, FL 

Freed-Hardeman University, Henderson, TN 

Harrisburg University of Science and Technology, Harrisburg, PA 

Philander Smith College, Little Rock, AR 

Princeton University, Princeton, NJ 

Rollins College, Winter Park, FL 

Rust College, Holly Springs, MS 

Enhancing Affordability: Tuition Guarantees 

A growing number of private institutions offer four- or five-year tuition guarantees to freshmen. Tuition will not increase for the years they are enrolled. These 

programs give families peace of mind that their tuition won’t increase by unexpected 

amounts, and allow them to more easily budget. These colleges and universities include, but aren’t limited to, the following. 

Baylor University, Waco, TX 

Capitol College, Laurel, MD 

Concordia University, River Forest, IL 

George Washington University, Washington, DC 

Hardin-Simmons University, Abilene, TX 

Hiram College, Hiram, OH 

Hiwassee College, Madisonville, TN 

Merrimack College, North Andover, MA 

Northwestern College, Orange City, IA 

Ouachita Baptist University, Arkadelphia, AR 

University of Charleston, Charleston, WV 

Enhancing Affordability: Partnerships with Community Colleges and High Schools 

Private institutions are giving community college and high school students opportunities to earn credits at reduced prices and to ‘‘test the waters’’ before enrolling. 

Many institutions partner with local two-year colleges to offer joint degree programs 

that lower overall costs for students. 

Benedictine University, Lisle, IL 

Students with an associate’s degree from one local community college are able to 

earn a bachelor’s degree from Benedictine through an on-site program at the twoyear institution. Tuition is half what the students would pay if they enrolled as 

adult nursing students at the Benedictine. The university is exploring similar partnerships with two other community colleges. 

Gannon University, Erie, PA 

Gannon has dual enrollment programs with local and regional high schools where 

qualified high school students can take college courses and earn college credit while 

they are still in high school. 

Hiwassee College, Madisonville, TN 

Hiwassee, a two-year institution, provides dual enrollment courses for high school 

juniors and seniors in surrounding counties. The program essentially provides collegiate course work for students with no out-of-pocket expense. 

Lyon College, Batesville, AR 

Students at two nearby community colleges may take one course a semester at 

Lyon while paying their community college’s rate, allowing them to ‘‘test the waters’’ 

before transferring. In addition, Lyon students may take a course each semester at 

these institutions, allowing Lyon to save the cost of creating courses that are already locally available and meet the college’s academic standard. 

Schreiner University, Kerrville, TX 

Schreiner provides at no cost to qualified area high school seniors access to one 

course to promote higher education as an option, and give them the opportunity to 

explore the college classroom before committing to enroll. The university has also 

developed articulation agreements with nearby community colleges. 

20

Walsh College, Troy, MI 

Walsh gives students the opportunity to complete three college degrees within a 

total of five years. The program offers a seamless transfer from an associate’s in 

business program at two local community colleges into the bachelor’s, and then master’s business programs at Walsh. This shortens total degree completion time by as 

much as one year, with 87 hours offered at community college rates. 

Enhancing Affordability: Accelerated Degree Programs 

Private institutions nationwide offer accelerated degree programs. These programs get students out into the workforce earning a salary earlier, and saving on 

their tuition, room, and board costs. 

Adelphi University, Garden City, NY 

Adelphi offers a five-year combined bachelor’s and master’s teachers program, as 

well as accelerated joint-degree programs combining undergraduate liberal arts with 

professional studies (dentistry, engineering, environmental studies, law, optometry, 

and physical therapy), in conjunction with six other public and private institutions. 

Albertus Magnus College, New Haven, CT 

Albertus Magnus College offers both undergraduate and graduate accelerated programs. Tuition for these programs is approximately half of tuition for traditional 

day programs. 

College of Notre Dame of Maryland, Baltimore, MD 

The College of Notre Dame offers Accelerated College, a program in business and 

nursing for working women and men. Once a student enters an accelerated college 

cohort, tuition will remain the same for that cohort until graduation. 

Gannon University, Erie, PA 

Gannon offers accelerated joint-degree programs in law, pharmacy, osteopathic 

medicine, podiatry, physical therapy, and other fields with three other institutions. 

Hiram College, Hiram, OH 

In 2006, Hiram added an accelerated biomedical humanities program, which prepares students to take the MCAT or GRE exams at the end of their second year, 

and to enter medical school or graduate school after three years. 

Judson College, Marion, AL 

Judson allows students to graduate with bachelor’s degree in two years, ten 

months, saving time and money. 

Mount St. Mary’s University, Emmitsburg, MD 

Mount St. Mary’s offers accelerated undergraduate and graduate degree programs, including several for returning adult students. Tuition for the undergraduate 

accelerated program is less than half that of the traditional program. 

Nichols College, Dudley, MA 

Nichols offers an accelerated joint bachelor’s and master’s of business administration program in on-site and online formats, both of which cost less than the traditional programs. 

Peirce College, Philadelphia, PA 

Peirce allows adult learners to earn an associate degree in half the usual time. 

Saint Joseph College, West Hartford, CT 

Saint Joseph offers seamless undergraduate/graduate degree programs that allow 

students to earn baccalaureate and master’s degrees in five years in biology, chemistry, and psychology/counseling. The college also offers an accelerated degree program in nursing. 

Seattle University, Seattle, WA 

Matteo Ricci College at Seattle University is the three-year university phase of 

a program that integrates high school and university level studies. It allows students to complete their high school and university education in six or seven years, 

rather than the traditional eight. 

Waldorf College, Forest City, IA 

Waldorf offers all its bachelor’s degree programs in a three-year format. 

21

Enhancing Affordability: Four-Year Graduation Guarantees 

These guarantees ensure that students at private colleges and universities graduate in four years. They avoid an additional year of tuition payments and get graduates into the workforce sooner than most of their peers at public universities. Institutions that don’t deliver on the promise for a student who follows university guidelines and stays on track, will provide the remaining classes at no cost. 

Augsburg College, Minneapolis, MN 

Centre College, Danfield, KY 

DePauw University, Greencastle, IN 

Doane College, Crete, NE 

Dominican University of California, San Rafael, CA 

Milwaukee School of Engineering, Milwaukee, WI 

Muskingum College, New Concord, OH 

Pace University, New York, NY 

Regis University, Denver, CO 

University of the Pacific, Stockton, CA 

Enhancing Affordability: Job Guarantees 

Job guarantees for new graduates keep institutions accountable for the quality of 

education provided, and assure students that their financial investment is worthwhile. 

College Misericordia, Dallas, PA 

College Misericordia offers a guaranteed placement program that ensures graduates of a paid internship in their fields if, six months after graduation, they do 

not have a job in their fields or have not been admitted to graduate school. 

Manchester College, North Manchester, IN 

Students who have not secured a job within six months of graduation may take 

additional undergraduate courses free of charge for one year to help prepare for employment. 

Milwaukee School of Engineering, Milwaukee, WI 

Undergraduate course may be repeated at no cost within three years of graduation if the graduate or his/her employer believes job performance will be enhanced. 

Newbury College, Brookline, MA 

Students who graduate with a bachelor’s degree and at least a 3.0 grade point 

average, may take up to 10 courses at Newbury free of charge, if they are not employed after six months. 

Robert Morris College, Chicago, IL 

The 180-Day Guarantee offers associate degree students additional free education 

if they are unemployed within 180 days of graduation. 

Enhancing Affordability: Work Colleges 

Work colleges blend liberal learning and applied studies into the undergraduate 

curriculum. Every student is required to work on campus or in the community. In 

return, partial or full tuition is covered by the institution. Five of these institutions 

are listed below. For more information, visit www.workcolleges.org. 

Alice Lloyd College, Pippa Passes, KY 

Every full-time student is required to work as a part of his or her overall educational experience, helping to significantly defray the cost of attendance. Tuition 

at Alice Lloyd is guaranteed to students residing in 108 central Appalachian counties in parts of five states. 

Berea College, Berea, KY 

Every admitted to Berea is awarded the equivalent of a four-year, full tuition 

scholarship. All students are required to work at least 10 hours a week in campus 

and service jobs. 

Blackburn College, Carlinville, IL 

Every student works a minimum of 160 hours a semester, keeping the cost of attendance low. 

22

College of the Ozarks, Point Lookout, MO 

No full time student at College of the Ozarks pays a penny of tuition. Students 

work 15 hours a week during the regular school year, plus two 40-hour weeks during holiday periods, to help offset the costs of their education. 

Deep Springs College, Deep Springs, CA 

Each student attends for two years and receives a full scholarship valued at over 

$50,000 per year. Students work at least 20 hours a week on the campus and accompanying ranch. 

Controlling Costs: Outsourcing; Streamlining Staff; Integrating Information Technology; Employee Incentives to Cut Costs 

Private colleges and universities are launching—and expanding—innovative initiatives, and adopting business practices to control operating costs, enhance efficiency, and give students a high quality education at the lowest price possible. 

These include outsourcing services, targeting cost reductions, implementing new information technology for administrative functions, and streamlining staff while safeguarding quality. 

Clark University, Worcester, MA 

Clark has launched initiatives in strategic fuel purchasing, computerized energy 

co-generation and management, which have resulted in a 33-percent annual savings. Clark practices ‘‘enterprise’’ budgeting, which treats certain parts of the university as self-contained businesses. 

Columbia College Chicago, Chicago, IL 

Columbia College Chicago has a financial incentive program that rewards faculty 

and staff who save money by eliminating processes and procedures without harming 

student services or outcomes. Recipients are given a financial award equal to onethird of the cost savings, up to $2,000. 

Denison University, Granville, OH 

The university’s personnel committee now requires that any growth in staff size 

be approved only if it can be accomplished without creating any additional burden 

to the student body. The increase must be funded by either non-student revenue or 

by a tradeoff with an existing expense. 

Emory University, Atlanta, GA 

Emory has consolidated departments and is collaborating with regional institutions to purchase commonly used supplies. It is eliminating contractor redundancy 

by combining contracts with major vendors for lower prices, and pursuing smaller 

vendors for greater discounts. 

Flagler College, St. Augustine, FL 

To enhance efficiency, Flagler requires faculty to teach at least five courses or 300 

credit hours each semester; has replaced permanent tenure with rolling one- to 

three-year contracts; and increased the use of part-time adjunct faculty. 

Georgetown College, Georgetown, KY 

Georgetown College outsources much of its alumni relations operations, including 

the production of alumni publications, management of alumni events, and development of an alumni website. 

Massachusetts Institute of Technology, Cambridge, MA 

MIT launched a re-engineering project to close the gap between the institute’s income and its expenses. MIT has consolidated suppliers and steamlined facilities operations. 

McKendree College, Lebanon, IL 

To serve students more cost effectively, the McKendree restructured its administrative staff. Without reducing the quality or degree of service to students, several 

staff positions were closed. 

Spartanburg Methodist College, Spartanburg, SC 

Spartanburg reorganized its administrative structure, replacing six academic departments with four academic divisions. The new structure also reduced the number 

of administrators reporting to the vice president for academic affairs, enhancing efficiency. 

23

Stetson University, DeLand, FL 

Stetson has reduced administrative costs through program consolidation and new 

computer applications. It replaced the chief academic officer with a dean’s council, 

giving the deans of arts and sciences, business, and music direct responsibilities for 

institutional planning. 

Union University, Jackson, TN 

Union University has outsourced several of its operations, including bookstore, facilities, grounds, and housekeeping. Through careful budget monitoring, it has taken 

steps to reduce hiring. 

University of Notre Dame, Notre Dame, IN 

Notre Dame has re-bid and streamlined administration of benefit plans; implemented campus-wide budget reductions; enhanced procurement processes; 

outsourced the cashier’s office; and implemented incentive plans to encourage departments to improve expense management. 

Controlling Costs: Cost Savings through Environmentally-Friendly Systems 

Private colleges and universities are moving quickly to implement and expand environmentally-friendly systems that reduce energy consumption and result in significant cost savings. 

Adelphi University, Garden City, NY 

Adelphi installed a geo-thermal heating system in 2003 for its new residence hall 

and reduced the building’s projected consumption by 30 percent. The university cuts 

back 400 kilowatts of power on high demand days in exchange for payment from 

its energy supply company. 

Illinois College, Jacksonville, IL 

To reduce energy costs well into the future, Illinois College opened a resident hall 

in 2006 that emphasizes state-of-the-art strategies for sustainable site development, 

water savings, energy efficiency, materials selection, and indoor environmental quality. 

Juniata College, Marion, AL 

Juniata buried cool-water lines at all the main buildings to reduce the electrical 

load for air conditioners, making it more cost efficient to cool buildings. The college 

has created a LEED-certified classroom/multipurpose building that uses recycled 

materials, natural heating and cooling systems, composting toilets and a variety of 

other systems to reduce the environmental footprint and cut down on energy consumption. Juniata installed new boilers that can be switched between natural gas 

and heating oil, allowing the college to save money by locking in long-term supplies 

at reduced costs. 

Park University, Parkville, MO 

Park has had significant savings by building classroom and office space underground, including saving more than 50 percent on the construction cost of new distance learning facilities. Park also reaps ongoing savings through lower operating 

and utility costs. 

Princeton University, Princeton, NJ 

Princeton has implemented an electricity supply load management system that 

predicts electricity demand on an hourly basis, compares demand to pricing, and allows Princeton to use major equipment when energy costs are lowest; this system 

saved about $2 million in the 2006 fiscal year. Princeton also produces chilled water 

when costs are lowest, stores this chilled water until it is needed, and has been recommissioning heating and cooling systems to original or improved designed standards for additional savings. 

University of Evansville, Evansville, IN 

The University of Evansville produces approximately half of its own electricity 

with a guaranteed savings of at least $400,000 annually over the next 15 years. 

University of Scranton, Scranton, PA 

During summer 2005, the University of Scranton implemented a water conservation project that will save the university nearly $100,000 a year and conserve more 

than 10 million gallons of water consumption. The savings from reduced water consumption, sewer taxes, and thermal energy for water heating are estimated at about 

$95,000 per year. 

24

Wilson College, Chambersburg, PA 

Vegetable oil from Wilson College’s 100-acre, on-campus, organic farm, is recycled 

into biodiesel fuel for the farm’s equipment, and waste products from the dining hall 

and equestrian center are used as compost for the fields. 

Controlling Costs: Student Employment Initiatives 

A growing number of institutions are giving students an opportunity for paid onhands work experience related to their field of study. Colleges save on the higher 

costs of full-time, permanent employees. See also Work Colleges, page 7. 

Juniata College, Marion, AL 

Juniata’s entire information tech support operation is run by its students. Student 

managers direct budgets, hire (and fire) student employees, and take on R & D assignments for new software or products. 

Marquette University, Milwaukee, WI 

To save costs, Marquette supplements its finance staff by hiring student accounting interns who apply classroom knowledge while providing a needed university 

service. 

Rhodes College, Memphis, TN 

Since 2004, students compete for jobs as ‘‘student associates’’ in areas related to 

their academic field of study. Rhodes pays the students staff wages, while reaping 

the savings of assigning only fractional positions, and the students gain valuable 

training and experience. With 60 students involved, Rhodes has already seen cost 

containment almost triple in the third year of the program. The positions solve departmental needs at a fraction of the cost and gave resulted in improved services, 

extended programming, and greater student satisfaction. 

Controlling Costs: Regional and Metropolitan Consortial Arrangements 

Increasingly, private colleges and universities in a common metropolitan area or 

region are working together to cut operating costs while improving quality. These 

multi-institution alliances allow colleges to leverage joint purchasing power for 

lower costs on energy, insurance, and information technology; reduce administrative 

and academic redundancies; offer students new learning opportunities and better 

services; and share best practices. 

Associated Colleges of Central Kansas, McPherson, KS 

ACCK’s consortial activities collectively save participating campuses an estimated 

$1.2 million each year. It provides administrative computing services and selected 

academic programs from a central location; an undergraduate major in special education, and upper-level coursework in several disciplines. ACCK offers a health insurance pool; Internet access through a single vendor; daily courier service; and a 

Blackboard server used by faculty at the member institutions. 

Colleges of the Fenway, Boston, MA 

Six neighboring institutions in Boston formed the Colleges of the Fenway consortium to share courses, programs, and services, while retaining their individual 

names, missions, and independence. The consortium offer cross registration of students and collaborate on master planning and information technology. It offers temp 

services and advertising contracts; and teams together to hold admissions and marketing events. 

Five Colleges, Inc., Amherst, MA 

Five Colleges, Inc., a consortium of five private and public institutions, promotes 

long-term education and administrative resource sharing. Members make joint appointments in areas such as risk management and recycling; jointly recruit for admissions; conduct joint management training; and have a cooperative purchasing 

agreement that allows the institutions to jointly save $1 million each year. The colleges have common academic calendars; offer a joint automated library system and 

online course catalog; share several academic departments; and make joint faculty 

appointments. 

Independent College Enterprise, Charleston, WV 

The Independent College Enterprise is a collaborative effort between seven Virginia, West Virginia, and Massachusetts institutions to share all of their administrative computing services. ICE owns and operates the hardware and software that 

support the financial management, human resource, financial aid, admissions, 

alumni, development, and student records processes for all seven schools. 

25

Lehigh Valley Association of Independent Colleges, Bethlehem, PA 

LVAIC’s collaborative purchasing programs have generated substantial cost savings, giving smaller institutions better pricing, and access to higher quality products 

and services. It handles $60 million in group purchasing of products and services. 

Seven other regional colleges, universities, and private secondary institutions have 

joined LVAIC’s six member institutions in these programs. 

Southeastern Pennsylvania Consortium for Higher Education, Glenside, PA 

The eight private colleges and universities that make up SEPCHE share administrative services; a common calendar among groups of colleges to facilitate co-curricular and curricular activities; cross-registration and transfer processes; and collaborative student activities. They jointly hire faculty and staff in mutually beneficial areas, develop new academic programs, and provide faculty development. 

Controlling Costs: Statewide Consortial Arrangements 

State associations of private colleges and universities are innovating and expanding collaborative initiatives that cut operating costs while improving quality. These 

statewide alliances allow colleges to leverage joint purchasing power for lower costs 

on energy, insurance, and information technology; reduce administrative and academic redundancies; offer students new learning opportunities and better services; 

and share best practices. 

Association of Independent Colleges and Universities in New Jersey, Summit, 

NJ 

AICUNJ provides New Jersey’s 14 independent colleges and universities 

consortial purchasing for communications, energy, insurance, computer software, 

equipment financing, mattresses and travel, and employment benefits such as temporary and long term disability benefits plans. Collaborative professional development workshops also help keep costs down. 

Association of Independent Colleges and Universities of Pennsylvania, Harrisburg, PA 

AICUP member institutions participate in several joint purchasing agreements, 

including licensing for major Microsoft products, with an average cost savings of 60 

percent to 70 percent; repair and maintenance contracts, with an estimated overall 

cost reduction of 10 to 30 percent; local and long distance phone service; Internet 

access; natural gas; electricity; bond financing, with an overall savings of $1.5 million in insurance expenses; and worker’s comp and auto insurance. 

Connecticut Conference of Independent Colleges, West Hartford, CT 

CCIC has a multi-pronged administrative collaboration effort that is focused on 

group purchasing, shared services and the development of new markets. Members 

have access to shared staff training and contracts for various products including 

legal online music downloading, internet security tools, personal security options, 

parcel delivery, bottled water, conference calling, and news clipping services. Other 

services include student health insurance, workers compensation insurance, internal 

audit services, an annual risk management conference, and collaborative emergency 

planning. Work groups meet on a regular basis to explore options, expand services 

and share best practices. 

Council of Independent Colleges in Virginia, Bedford, VA 

CICV is involved in several collaborative business programs, including a volume 

discount program for long-distance telephone service and a discounted Microsoft 

Campus Agreement. CICV is also engaged in extensive collaborative efforts to recruit students for member institutions. 

Independent Colleges and Universities of Florida, Tallahassee, FL 

ICUF sponsors the Independent Colleges and Universities Risk Management Association that offer property, liability, workers compensation, and auto insurance. 

This group will soon add pooled coverage for property, casualty, workers compensation, auto, pollution, e-commerce, and a number of other products. ICUF provides 

its 28 members with self-insured medical benefits; maintains a purchasing arrangement with UPS, Dell, and Siemens; and offers a statewide Microsoft Campus Agreement. 

Maryland Independent Colleges and Universities Association, Annapolis, MD 

MICUA offers collaborative purchasing programs its 18 member colleges, including student, property and casualty, group life, and long-term disability insurance; 

and student tuition payment plans. 

26

Ohio Foundation of Independent Colleges, Columbus, OH 

OFIC’s 35 member colleges share technology hardware, software, and expertise; 

software licensing; faculty development and teacher education programs in technology use; consultative referral service in health and property and casualty insurance solutions; and consultative referral services in energy management solutions. 

OFIC also provides collaborative programs in minority student recruitment and retention. 

Oregon Independent Colleges Association, Portland, OR 

On behalf of its 17 member institutions, OICA has initiated and sustains volume 

purchasing programs for all voice and data telecommunications; multiple lines of 

software and hardware; a self-insured workers compensation benefit trust; a selfinsured employee health benefits trust; moving vans; public notices; and management training. Annual savings are estimated at $3 million to $5 million. Students 

at OICA member institutions can also cross-register, without cost, at other schools 

to complete required courses not offered in a given term at their home campus. 

Tennessee Independent Colleges and Universities Association, Nashville, TN 

TICUA offers its 35 members a self-funded health insurance program; and has its 

own procurement program that offers discounts with over 30 vendors, ranging from 

computer software to electrical services. TICUA partners with its sister organizations in Kentucky and Florida to offer Tuition First and Independent Colleges and 

Universities Risk Management Association, respectively, to its members. 

Wisconsin Association of Independent Colleges and Universities, Madison, WI 

The WAICU Collaboration Project is a comprehensive initiative to perform all administrative support (back office) functions of Wisconsin’s 20 private colleges and 

universities. According to the most recent statistics, WAICU reduced members’ costs 

in 2005 by more than $5 million—a 58 percent increase in savings from 2004. The 

effort, now halfway through its implementation process, includes joint administration of health plans, a study abroad consortium, professional development for faculty 

and departmental chairs, collection services, background checks, and a student 

health plan, which is being adopted in other colleges and universities outside of Wisconsin. The congressional report The College Cost Crisis called the WAICU project 

‘‘transformative.’’

Controlling Costs: National Consortial Arrangements 

These consortial efforts allow institutions from around the nation to pool resources to control costs and improve services. 

Association of Jesuit Colleges and Universities, Washington, DC 

Twenty-one AJCU member institutions provide a collaborative virtual reference 

service, which allows participating colleges to extend standard hours of operation by 

distributing the staffing of the service across multiple libraries and multiple time 

zones. Online reference librarian assistance is offered 24 hours a day, seven days 

a week. 

Coalition for College Cost Savings, Nashville, TN 

CCCS helps small to medium sized independent institutions in 16 states enhance 

efficiency through joint procurement agreements for several services and products. 

Joint contracts for comprehensive asset management programs and employee longterm care insurance will be offered. 

Controlling Costs: Non-Tuition Revenue Sources 

To help reduce the pressure of rising costs on tuition, private institutions are generating and expanding alternative revenue streams. 

Augustana College, Rock Island, IL 

Augustana launched a capital campaign with the goal of endowing $50 million in 

need based scholarships. 

Hampton University, Hampton, VA 

Hampton uses income and interest from real estate and other investments to fund 

approximately $4million in scholarships for students each year. 

Loyola University Chicago, Chicago, IL 

Loyola University Chicago converted the first floor of a college owned building in 

Chicago to commercial retail rental property, and has leased university-owned land 

for 99 years in exchange for annual rental income of $2 million plus cost of living 

increases each year and 36,000 square feet of education space. 

27

Martin Methodist College, Pulaski, TN 

MMC has encouraged alumni to use the new, but temporary, federal IRA charitable rollover provision to establish scholarship endowments. 

Nichols College, Dudley, MA 

Nichols’ facilities are rented out in the summer at 100 percent capacity to help 

offset costs. 

Price and Cost Transparency 

To keep prospective and enrolled students, their families, and policymakers informed on the cost of attendance, major campus expenditures, and budget priorities, 

private colleges are better communicating consumer and institutional financial information. 

Drake University, Des Moines, IA 

Drake posts audited financial statements on the web, distributes letters and emails explaining tuition increases, holds town meetings on the budget, and e-mails 

financial updates to the campus community. 

Emory University, Atlanta, GA 

Emory posts its financial statements online. 

Gannon University, Erie, PA 

Gannon’s president sends an annual letter to all students, undergraduates and 

parents explaining not only the rationale for tuition increases, but outlining the new 

projects, facilities renovations, and faculty support. 

Hiram College, Hiram, OH 

Hiram outlines typical costs to prospective students and families through a number of ways, including providing financial scenarios on its website and in recruitment materials. 

Princeton University, Princeton, NJ 

Princeton established the first institution-specific financial aid calculator, which 

allows any family to go online and get a confidential, detailed estimate of how much 

aid they would receive and what they would pay for a Princeton education. 

U–CAN Media Coverage 

Before and after its launch, U-CAN has generated considerable national attention. 

What follows is a list of national, regional, and trade stories that have reported on 

the initiative.

Bergen County, N.J., Record (October 27, 2007) 

A new resource for comparing private colleges (syndicated column)

Chicago Tribune (October 24, 2007) 

Private colleges fighting back with their own guide

Norfolk, Va., Virginian-Pilot (October 21, 2007) 

Career Connection (no web link available)

Asbury Park Press (October 19, 2007) 

New Web sites aid college search

Tampa Tribune (October 8, 2007) 

Database Has Score On Private Colleges

Westchester, N.Y., Journal News (October 6, 2007) 

Need to Pick a College?

Fort Worth Star-Telegram (October 6, 2007) 

Private College Resource

Reading Eagle (October 4, 2007) 

High marks are given to new Web site on college selection

Philadelphia Inquirer (October 4, 2007) 

Rethinking college rankings (opinion piece)

Tampa Bay Business Journal (October 3, 2007) 

Eckerd College joins new college ranking system

Carlisle Sentinel (October 1, 2007) 

Private colleges offer data

WPTZ.com (October 1, 2007) 

Four Private Colleges Join Web-Based List

28

University Business (October 2007) 

Changing Student Demographics

Burlington Free Press (September 30, 2007) 

Four Vermont colleges join consumer information network

Allentown Morning Call (September 30, 2007) 

U-CAN helps students and their parents choose the ‘right’ college or university 

(editorial)

San Antonio Express-News (September 29, 2007) 

Comment: College comparison is now made easy

Baltimore Business Journal (September 28, 2007) 

Shop for Maryland colleges online

Newport News Daily Press (September 28, 2007) 

Online service quickly compares private colleges

Lansing State Journal (September 28, 2007) 

Need to pick a college? Headline online

Chicago Tribune (September 27, 2007) 

Private colleges get a bit of a boost

Seattle Post Intelligencer (September 27, 2007) 

New web site makes picking college easier

Cedar Rapids Gazette (September 27, 2007) 

National Web site offers admissions info for 600 colleges (no web link available)

Greenville News (September 27, 2007) 

College comparison Web site unveiled

Wilkes-Barre Citizens Voice (September 27, 2007) 

New web site brings private colleges to the public

Columbia Daily Tribune (September 27, 2007) 

Colleges launch site to rival U.S. News school rankings

Albany Times Union (September 27, 2007) 

Colleges unveil own database

Northwest Indiana Times (September 27, 2007) 

U-CAN look it up

Wilkes-Barre Times Leader (September 27, 2007) 

Local schools on new online database

Allentown Morning Call (September 27, 2007) 

College profile Web site unveiled

Asbury Park Press (September 27, 2007) 

Need to pick a college? New Web sites can help

Watertown Daily News (September 27, 2007) 

Two schools like new college-guide index

Chambersburg Public Opinion (September 27, 2007) 

Wilson joins effort to make comparisons of colleges easier

BusinessWeek (September 26, 2007) 

A new tool for the college bound

Inside Higher Ed (September 26, 2007) 

Accountability and the Applicant

Chronicle of Higher Education (September 26, 2007) 

Information, Please: As One Consumer Database Debuts, Higher-Education Leaders Ponder Another

Abilene, Texas, Reporter-News (September 26, 2007) 

Local universities seek new national ratings

USA Today (September 25, 2007) 

Need to pick a college? New websites can help

St. Paul Pioneer Press (September 25, 2007) 

New web site to smooth college quest

Chronicle of Higher Education (September 25, 2007) 

College Comparison Web Site Debuts

Education Week (September 10, 2007) 

Colleges Build Web Sites to Enable Campus Comparisons, Sans Ranks

St. Louis Post-Dispatch (September 9, 2007) 

College Rankings: Is it rank, or a rank?

Minneapolis Star Tribune (September 5, 2007) 

29

Colleges are changing the rankings game (editorial)

Chronicle of Higher Education (September 4, 2007) 

The ‘U.S. News’ Rankings Roll On

San Antonio Express-News (August 31, 2007) 

Compare college rankings to reality (opinion piece)

Kerrville, TX, Daily Times (August 21, 2007) 

Schreiner University makes U.S. News list

Cleveland Plain Dealer (August 21, 2007) 

College ranks and college angst (opinion piece)

San Antonio Express-News (August 20, 2007) 

Use college rankings with a grain of salt (editorial)

Carlisle Sentinel (August 19, 2007) 

Dickinson president serves on panel challenging college rankings

Time Magazine (August 18, 2007) 

Much Ado About College Rankings

Baltimore Examiner (August 18, 2007) 

College presidents developing alternative to U.S. News rankings

Greenville News (August 17, 2007) 

Clemson, Furman move up in magazine rankings

Washington Post (August 17, 2007) 

U.S. News’s College Rankings Face Competition and Criticism

Omaha World-Herald (August 17, 2007) 

Colleges promote alternative to ranking

Minneapolis-St. Paul, Star-Tribune (August 17, 2007) 

Colleges increasingly avoiding ‘Best’ label

San Antonio Express-News (August 17, 2007) 

Colleges call ‘elitist’ list distorting; magazine defends it as useful tool

York, Neb., News-Times (August 16, 2007) 

Better information for a better college choice (opinion piece)

St. Petersburg, Fla., Times (August 6, 2007) 

Do your homework on college rankings (editorial)

Waterbury, Conn., Republican-American (August 3, 2007) 

College Dropouts

Sioux Falls, SD, Argus Leader (July 25, 2007) 

College guide: Useful or irrelevant?

Macon, Ga., Telegraph (July 23, 2007) 

Wesleyan boycotts college rankings

Bloomberg News (July 23, 2007) 

Williams, Amherst Won’t Fight System

Indianapolis Business Journal (July 21, 2007) 

Some Indiana Colleges Revolt Against Survey

Christian Science Monitor (July 19, 2007) 

A better way to rank America’s colleges

Columbus Dispatch (July 14, 2007) 

Magazine’s college rankings done poorly

Lynchburg, Va., News & Advance (July 10, 2007) 

Sweet Briar boycotting U.S. News and World Report rankings

Burlington, Vt., Free Press (July 10, 2007) 

College rankings rile some schools

Richmond Times-Dispatch (July 7, 2007) 

Colleges question U.S. News rankings

New York Times (July 4, 2007) 

Colleges Join Forces on a Web Presence to Let Prospective Students Research and 

Compare

Cincinnati Enquirer (July 2, 2007) 

Ranking the college rankings (editorial)

Spartanburg, S.C., Herald Journal (July 1, 2007) 

Converse, Wofford balk at taking part in U.S. News survey

Chronicle of Higher Education (June 26, 2007) 

Private-Colleges Group Proposes Template to Foster Comparisons of Members

30

Inside Higher Ed (June 26, 2007) 

Campus Accountability Proposals Evolve

Philadelphia Inquirer (June 24, 2007) 

U.S. News’ College Rankings Overrated (editorial)

U.S. News & World Report (June 22, 2007) 

About the Annapolis Group’s Statement (column)

Cleveland Plain Dealer (June 21, 2007) 

Liberal arts schools protest U.S. News survey

Time (June 20, 2007) 

A Better Way to Rank Colleges?

CNN (June 20, 2007) 

Many American colleges balk at U.S. News rankings

USA Today (June 20, 2007) 

Some colleges may opt out of rankings

Inside Higher Ed (June 20, 2007) 

More Momentum Against ‘U.S. News’

Chronicle of Higher Education (June 20, 2007) 

Annapolis Group Challenges ‘U.S. News’ Rankings

Allentown, Pa., Morning Call (June 20, 2007) 

3 local colleges join others in bucking U.S. News rankings

New York Times (June 20, 2007) 

Some Colleges To Drop Out Of Rankings By Magazine

Bloomberg News (June 19, 2007) 

More Colleges Plan to Snub Annual U.S. News Ranking 

Chairman MILLER. Thank you. 

Mr. Alexander? 

STATEMENT OF KING ALEXANDER, PRESIDENT, CALIFORNIA 

STATE UNIVERSITY AT LONG BEACH 

Mr. ALEXANDER. Thank you Chairman Miller and members of 

the committee for this opportunity to share my thoughts with you 

about the rising college costs, public accountability and, I also want 

to point out, equal opportunity. 

I am president of a university of 37,000 strong, but I am here 

representing the largest university system in the United States of 

450,000 students, and we are the most diverse system in the 

United States where 54 percent of our students come from underrepresented backgrounds and 40 percent of those students are Pell 

grant eligible students, roughly first-generation students seeking 

college attainment and attendance. 

I am also representing many of the public universities who do 

what we do throughout the United States. Our tuition and fees this 

year will reach $3,164, roughly half the national public university 

average, and we do a very good job at keeping our fees low. The 

CSU System is roughly at about $3,400 or about half of the national public university average. We grew by 1,400 students alone 

just in our institution, in the CSU group by 25,000 new students 

just between last year and this year. 

I am here to talk to you about two issues: accountability and 

transparency, which we welcome, we welcome with open arms. I 

am also here to thank the committee for the work that they did 4 

years ago when we first started talking about the concept of net 

tuition and exposing net tuition and real differences between net 

tuition and sticker pricing as well as making sure parents have 

better information, and I will hit this a little bit later. 

31

Accountability and transparency first, it is the first issue, and we 

certainly commend the efforts and support all the work that you 

are doing. We also, NASULGC and the American Association of 

State Colleges and Universities, will unveil our volunteer system of 

accountability this month. This makes actually 12 pages of data 

and information about student learning, as well as the type of colleges that they are attending, volunteer service opportunities, lots 

of information, lots more information available to students and parents, and this will be unveiled this month through a NASULGC as 

well as ASCU to the nation. This represents all public 4-year sectors in higher education. 

I would like to point out that the CSU does not want to stop 

there. We also have taken this opportunity to add our own CSU 

VSA, and if you turn to my testimony, you will see a chart. That 

chart highlights some of the things that we want the public to 

know. These are things we want our taxpayers to know, that we 

want our policymakers to know: average student loan debt versus 

national averages, percentage of students leaving in debt, net tuition of the average family that may attend, not an awarded student, but just an average family so they have an idea of what they 

may pay to attend our institution. 

In addition to that, we think it is absolutely vital that we measure and calculate economic diversity in our institutions. So, when 

we take into account graduation rates, we also take first into account the types of students that we are serving within our institutions. 

As I mentioned, we have 40 percent first-generation Pell granteligible students, and we would like these issues raised and we 

would like these issues accounted for by those institutions who remain public in mission and who remain public in practice in the 

type of students that they serve around the United States. 

I would also like to focus on the issue of college costs, state appropriations and the maintenance of state funding efforts. The biggest issue, as Ms. Wellman pointed out, for us is the abdication of 

state governments in their roles and responsibilities to provide universal access for all of our students to public higher education. 

Roughly 80 percent of our students are in the public sector. We 

are highly contingent and reliant on what the states do for us. We 

greatly appreciate the financial aid that you helped by putting into 

the system to help offset many of these cuts, but, in many cases, 

it does not allow us to keep pace with the cuts that we have had 

to endure. 

When states step to the plate, as California did 2 years ago, we 

also stepped to the place and we did not increase our tuition and 

fees one single dime 2 years ago when the state came through and 

helped offset the enrollment growth numbers and the enrollment 

growth cost escalation that we experienced through fixed-cost 

growth. 

When our state steps to the plate, we do not raise tuition nearly 

to the degree that we do when our states remove themselves from 

these fiscal responsibilities. That is why I think it is imperative to 

do two things. 

First of all, when we follow these college costs issues, that we 

must also follow dollars, not percentages. The universities out 

32

there with the lowest dollar rates are often generally the institutions who, when they increase, increase their rates by the highest 

percentages. Now former Chairman McKeon took this into account 

by incorporating the $500, I think, exemption which helps many of 

our institutions who have fought hard to keep costs low and who 

will continue to fight hard to keep costs low. 

But the most important issue that I think we need to address as 

a federal government, and we need to address as higher education 

is how can we use the leverage of the federal government to maintain, to make sure that state governments do not remove themselves from these important responsibilities. We have done this in 

Medicaid. We have done this in Title 1 for public schools. Yet we 

are any easy cut. We are the first organization or first institution 

cut when states need to make budget cuts, and this comes at a 

time when higher education has never been more important to this 

nation and never been more important to society. 

By incorporating state maintenance of effort, provisions in new 

legislation that protect states and ensure that states keep up to 

their responsibilities to ensure that states like California, North 

Carolina, Texas, West Virginia are rewarded for having high tax effort in support of keeping costs low is very important for this nation. To not address this issue, I think you will see most states continue to slide in the direction that many states have done throughout the New England area, as well as Ohio, and many states that 

have not funded higher education very well in the last two decades. 

This is my greatest concern, and I think it is the greatest crisis 

that we address, is the formation of a federal partnership between 

the federal government and states to maintain state levels current 

or increasing levels of state appropriations for their public institutions of higher education. 

Thank you. 

[The statement of Mr. Alexander follows:]

Prepared Statement of F. King Alexander, President, California State 

University, Long Beach 

Thank you Mr. Chairman and members of the Committee for this opportunity to 

share with you some of my thoughts regarding the important national issue of rising 

college costs, public accountability and equal opportunity. 

I am president of California State University, Long Beach which is the nation’s 

24th largest university with an enrollment of 37,000 students. We take great pride 

in providing high quality educational opportunities at costs that are less than half 

of the national public university average. We are pleased that we serve so many students who come to us from first generation college families and diverse populations. 

Currently, approximately one third of our students are Pell Grant eligible and nearly 65% are African-American, Asian-American, Hispanic, and of other ethnic origins. 

With the support of the American Association of State Colleges and Universities and 

our California State University Chancellor, Dr. Charles Reed, I am here today representing AASCU and the CSU System, the largest university system in the nation 

which currently serves 450,000 students. Fifty-four percent of our students in the 

California State University System are from underrepresented, minority, and diverse backgrounds. 

Before making my comments, I want to thank the members of the Committee for 

the progress that has been made over the last four years. Nearly four years ago in 

a hearing before the House Education and Workforce Committee on 21st Century 

Competitiveness, I remember stressing to the former Chairman and others a number of important issues including the introduction of the ‘‘net tuition’’ concept which 

has since been taken very seriously by this Committee. You have also acted to address the critical issue that we raised regarding dangers of simply monitoring percentage growth without considering actual dollar increases which substantially disVerDate 0ct 09 2002 14:49 May 02, 2008 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 G:\DOCS\110TH\FC\110-70\38493.TXT HBUD1 PsN: DICK
33

advantages those colleges and universities that have worked hard to keep costs low. 

Too, I made the point then and I repeat now that by simply making new reporting 

requirements instead of developing new policy strategies to provide incentives for 

institutional effectiveness in addressing real public needs, we are missing a crucial 

opportunity to reform the current system of higher education. 

On these important points, I would like to focus my comments this afternoon and 

address two distinct areas, both of which have significant ramifications for collegiate 

costs and equal opportunity; (1) Accountability and transparency; and (2) college 

costs, state appropriations and ‘‘maintenance of state tax effort.’’ In each of these 

areas I will attempt to describe the existing problems and then offer policy recommendations that, in my view, would help remedy some of the primary concerns 

of taxpayers and policy-makers. 

1. Improving Accountability and Transparency 

We commend and support the efforts of this Committee to require that higher 

education become more transparent and accountable to students, parents, and taxpayers. The marketplace for education or any market cannot function effectively or 

efficiently without adequate information. California State University, Long Beach 

and the CSU System have taken these legislative and public concerns very seriously 

and created the most transparent and accountable measurement system in the nation. This system is known as the California State University Voluntary System of 

Accountability (CSU VSA) which augments the soon to be released national public 

university Voluntary System of Accountability (VSA). The CSU VSA is an important 

addition to the national VSA and adds numerous measurement categories designed 

to indicate the role that the twenty-three public universities in the CSU are playing 

when addressing a series of ‘‘Public Good’’ domains. This information will be made 

available for policymakers and taxpayers throughout California and the nation in 

addition to the institution-specific information resulting from the national VSA. 

While the national public university VSA was developed primarily to address student and parental concerns regarding the lack of substantive institutional student 

learning information, the CSU VSA was developed to address additional concerns 

that are of value to the general public at-large. 

In November 2007, both the American Association of State Colleges and Universities (AASCU) and the National Association of State Universities and Land-Grant 

Colleges (NASULGC) will release the ‘‘Voluntary System of Accountability’’ template 

for public discussion. This reporting system will make additional information available to parents and students regarding student specific actual college costs, financial 

aid results, community service participation as well as numerous standardized test 

results that assess value-added learning growth both inside and outside of the classroom. We fully endorse the public university VSA and our university will be among 

one of the first pilot institutions to provide the necessary information for reporting 

purposes. The California State University System will, in addition, set forth what 

is called a ‘‘Public Good’’ measurement system that will provide more clarity and 

transparency especially for categories that are not included in the national VSA or 

the model adopted by the private higher education sector. 

In addition to the national VSA, the augmented CSU VSA (see Appendix A), addresses four important ‘‘Public Good’’ categories that are either deemphasized or not 

included in the other measurement systems. If approved by the CSU Board of Trustees in mid-November, this information, which has already been collected from each 

of the 23 universities in the Cal State system, will be made available for public discussion. The categories include: 

1. Average Undergraduate Student Debt 

• Average amount in debt of graduating seniors 

• Proportion of graduating seniors in debt 

2. Degrees Granted 

• Degrees Granted in High Demand Fields 

• Race/Ethnicity of Undergraduate Degree Recipients 

3. Economic Diversity: Access and Completion 

• Undergraduate Pell Grant Eligibility (enrollment & percentage enrolled) 

• Undergraduate Pell Grant Recipients 5-yr. Average (enrollment & percentage) 

• Undergraduate Degrees Awarded to Pell Grant Students (Degrees & Percentage) 

34

4. Actual ‘‘Net Tuition and Fees’’ paid by an average student when compared 

to the posted sticker price 

As you can see from the categories exhibited in Appendix A, it is our hope that 

the federal government will also consider these items when developing new reporting requirements for colleges and universities. Currently, many institutions refuse 

to make economic diversity data readily available to consumers, taxpayers and other 

constituencies. 

Recommendations for more effective accountability and transparency 

A. In addition to the current reporting of graduation rates, the federal government 

should collect and distribute aggregate graduate numbers and economic diversity 

characteristics of enrolled and graduating students. This reporting can be accomplished by requiring and publishing Pell Grant eligibility access and completion 

data in aggregate numbers and percentages. Also, existing graduation rate reporting 

should be disaggregated using federal financial aid receipt (Pell Grant eligibility) as 

a proxy for income so that policymakers can better understand risk categories earlier in order to support timely and successful graduation. 

B. Require that an average ‘‘net tuition and fees’’ be calculated by each institution 

and made available to students, parents and taxpayers. This average net tuition 

should reflect the average cost versus the sticker price per full-time student, not 

simply aided student. Sticker prices do not reflect the actual cost of higher education. Using ‘‘sticker prices’’ distorts and creates a flow of misinformation to consumers and students further confusing the economic realities of college attendance. 

If the federal government is to help improve the efficiency of the marketplace of 

higher education it can contribute materially by collecting, calculating, and distributing actual program cost information by types of institutions. Such information can 

then be used to develop as a more viable basis for the allocation of federal subsidies. 

This initiative would simplify federal policies while not penalizing states that continue to publicly support higher education and encourage institutions to keep costs 

down. 

C. Require the colleges and universities to collect and distribute average student 

undergraduate debt amounts and the percentage of seniors graduating with student 

loan debt. Consumer information about student debt loads is currently very difficult 

to obtain for most people. 

D. Require that federal agencies collect and pay much closer attention to institution specific expenditure trends when making policy-based determinations. Understanding institutional expenditure trends is essential for determining which colleges 

and universities have actually increased their costs to serve more students, more 

needy students, or simply to maximize the prestige of the institution. 

2. College Costs, state appropriations and ‘‘maintenance of state tax effort’’

In addressing the issue of college and university tuition and fee growth, it is obvious that the problem of higher education costs and tuition does not detrimentally 

affect parents, students and institutions the same. This fact is evidenced in numerous congressionally-mandated studies of college costs and prices, showing drastic 

variations in average tuition and fee growth between private and public universities 

during the last two decades. Public perception of rising tuition costs has been 

shaped by a number of reasons, including geographic location and the media which 

is heavily influenced by high cost institutions in the northeastern region of the U.S. 

Importantly, misunderstanding is fueled by an overall lack of information in the 

academic marketplace that prevents students and parents from distinguishing real 

net costs from ‘‘sticker prices.’’ For example, students and families pay college tuition in dollars, not in percentages, yet the vast majority of public discourse by policymakers and the media dwell on college cost increases reflected simply as percentage growth. In fact, ‘‘if you analyze actual tuition and fee dollar increases, instead 

of tuition and fee percentage growth, you will discover that many of the public universities with the largest percentage increases over the last few years are the very 

institutions that are the most affordable and accessible. A small dollar increase may 

well be reflected in a relatively large percentage increase at lower tuition institutions. This is especially true in lower cost/high tax effort states like California, Hawaii, North Carolina, West Virginia, and Kentucky which have worked hard to keep 

student tuition and fees at very reasonable levels in exchange for maintaining above 

average tax support. These low tuition states remain low cost in an effort to ensure 

widespread access and affordability. Also, these same states are among the lowest 

in the nation in average student loan debt per graduate. 

Furthermore, it is quite obvious that as state appropriations slide downward, student tuition and fees must rise. The interlocking relationship between public institutions, tuition and fee policies and state appropriations is an area that seems to be 

35

pervasively misunderstood by taxpayers and policymakers. Over the last decade 

studies have highlighted the instability of state appropriations and the effects of 

state policy on public institutional tuition changes. In a recent Congressionally mandated NCES study on college costs and prices, it was shown that state general fund 

appropriations was by far the most significant factor in determining public college 

and university resident tuition rates . This is especially evident when reviewing 

overall public college and university tuition and fee changes when compared to state 

appropriation changes during the last decade. As shown in Table 1, the most influential reason for increases in public college and university costs is the drastic fluctuations of state appropriations. Therefore, in my view it should be a federal imperative to ensure that states maintain their public support of higher education. This 

‘‘maintenance of fiscal effort’’ is a necessary part of the federal/state partnership to 

ensure that states continue their current level of support. A ‘‘maintenance of effort’’ 

federal/state partnership would make it more difficult for states to further reduce 

their fiscal responsibility to public colleges and universities by shifting the increasing costs of higher education to students, and ultimately, federal tuition-based programs.

In the case of the State of California, the dependent relationship between state 

appropriations and student tuition and fees was never more apparent than when 

the state budget was developed two years ago. State legislators and the Governor 

made a conscience decision to increase funding for higher education by approximately 6.5 percent to alleviate the need for a student fee increase while still allowing the CSU to expand by 25,000 additional students. The result was that student 

tuition and fees did not increase one dollar during that year. 

It is also important to point out that state legislatures do not allow, in most cases, 

public institutions to set their own tuition and fees. Currently, there are only 14 

states that allow individual institutions such prerogative. 

College Costs and Equal Opportunity Recommendations 

A. Federal Partnerships: Cost of Education Allowances Program (with maintenance of state fiscal effort provision): 

Thirty-five years ago, the original Pell Grant legislative proposal called for the 

creation of a companion program that would grant additional funds to the institutions that served Pell Grant recipients. The program was premised on the well-recognized fact that it costs more to educate lower income students at all levels. The 

original legislation recommended the creation of ‘‘cost of education’’ allowances to be 

allocated directly to institutions. These grants were to accompany the Pell Grant recipients to their respective college or university. This proposal emphasized the benefit to the individual as opposed to the institution by recommending that the Department of Education create ‘‘cost of attendance’’ allocations in the amount of 

$2,500 per Pell Grant eligible student. This plan provided additional assistance to 

institutions serving needy students. To ensure that these funds were properly devoted to student enrichment, the proposal required that federal funds be used to 

support campus-based academic and student service programs that primarily assist 

lower-income students. This program would have created important fiscal incentives 


alex1.eps
36

for institutions to enroll lower-income students. However, this part of the original 

plan was never enacted. 

Currently, there are no federal incentives of this kind in place and as a result 

many high priced private and public institutions have seen their enrollments of 

lower income students stagnate and even decline. The incentives we propose today 

would foster greater fiscal collaboration among federal, and state governments and 

institutions. This would promote greater college access for lower income students, 

support retention efforts, and reward higher completion rates. As part of this partnership, our recommendation calls for the creation of a ‘‘state maintenance of effort’’ 

provision to ensure that states do not reduce their commitment to public higher education. These federal incentives would not only provide invaluable support to those 

institutions serving the neediest students but would ensure sustainability of state 

funding at federally supported levels. To accomplish this, the federal government 

should require that states maintain current levels of state support in the form of 

average per student appropriation or an expected level fiscal tax effort which would 

be defined at the federal level. If states do not abide by this provision and used 

these federal funds to ‘‘supplant’’ existing state support then the amount of the federal institutional grant can be reduced or withheld pending. 

B. The federal government should not continue to increase the current aggregate 

federal loan limits so long as such are tied to the sticker prices established by the 

individual institutions. Rather any increases in federal loan limits should be based 

on the actual costs incurred by the institutions in the provision of the educational 

programs. If the current system that incorporates sticker pricing remains in place 

when aggregate loan limits are expanded we fear that this will result in even higher 

sticker prices in the years to come on many college campuses. This trend also would 

further generate more public backlash against all higher education institutions not 

just the institutions that have escalated their pricing. By simply expanding the aggregate loan limits without making additional formulaic changes the federal government would ultimately drive more students toward higher amounts of student loan 

debt. 

Institutionally, the expansion of the aggregate loan limits would primarily advantage public and private wealthy institutions that charge significantly higher tuition 

rates over the lower cost, less affluent public universities and community colleges. 

Instead, it is our belief that the federal government should direct institutions to provide adequate student loan counseling and assistance that encourages students to 

use all federally supported loan opportunities. Currently, numerous studies indicate 

that students who have been increasingly turning to additional private loans to pay 

for college have not fully maximized the existing federal loan programs. Federal 

loan programs and their subsidies should be focused on expanding access instead 

of providing choice. By not expanding the aggregate loan limits the federal government is also putting more pressure on the wealthy institutions to better control 

their sticker pricing and expenditures. 

C. The federal government should require that all colleges and universities that 

receive federal direct student aid enroll at least a given percentage of Pell Grant 

eligible students or demonstrate that the institution is making progress toward this 

goal. Institutions with less than the prescribed percentage of Pell Grant eligible students would face federal direct student aid reductions. 

In summary I have spoken to you today about important issues regarding the enhancement of institutional accountability and transparency, the determination of actual college costs, and the role of the federal government in ‘‘state maintenance of 

effort’’ in supporting higher education. I realize that some of these recommendations 

require a significant overhaul in our national higher education agenda by requiring 

a much more strategic partnership between the federal government and our state 

governments. I also realize that timeline for this Reauthorization is very short and 

upon us now. However, I do think that we will require these kinds of national conversations to reform our current higher education system if we are going to promote 

equal and affordable education opportunities in order to remain competitive with 

other OECD nations in the decades to come.

37

Chairman MILLER. Thank you very much. 

The committee will recess for the purposes of going and casting 

our votes, and we will return as soon as those votes are done. 

Thank you. 

[Recess.] 

Chairman MILLER. Thank you very much for your patience. 

The committee will reconvene. 

Thank you for your testimony. 

I am going to begin with Mr. Tierney. Mr. Tierney has a conflict 

since he is in the Conference Committee on the Intelligence Committee. So Mr. Tierney is recognized for 5 minutes. 

Mr. TIERNEY. Thank you very much, Mr. Chairman. 

Thank you, our witnesses today. 

I think you are probably aware that we have had a bill out there 

for the last couple of sessions that talks about state maintenance 


alex2.eps
38

of effort, and I think the concept is acceptable to most people. What 

we are having difficulty with is how do we accomplish it. 

So, if we could start maybe from right to left on this, sir, if you 

could give us some ideas of just what would we use as either an 

incentive or a stick or both to get states to do that? 

Mr. ALEXANDER. Okay. Thank you for the question. 

I know that you have been working to try to incorporate these 

provisions into the act, in the Reconciliation Act, and I commend 

the efforts. I know that the LEAP funds were used as potential leverage for this earlier, and I know that our counsel and state government certainly do not want their flexibility constrained. 

But what I think could be done—in 1972, the Pell grant program, 

when it was put into effect, had a companion program that was 

supposed to be adopted at the same time. It was called the Cost 

of Education Allowances. Those Cost of Education Allowances 

would partner with institutions and reward institutions who enrolled, retained and eventually graduated lower-income Pell grant 

students. That initial grant to that institution that would follow 

the low-income student was $2,500 in the discussions in 1972. For 

some reason or another, that companion program was left off the 

table when the Pell grants were adopted and the final proposal was 

finished in 1972. 

I believe that you can use a similar structure to shape the type 

of grants that would go to institutions and leverage them with 

state appropriations so that that grant would ebb and flow or increase and decrease based on what the state’s commitment to their 

own appropriations are. 

Mr. TIERNEY. Would you give me an example of that? 

Mr. ALEXANDER. Certainly. For every Pell grant—for example, 

our institution with 37 percent Pell grant students—we would actually get a companion grant that would follow those students to 

our institution to help them succeed. 

Now the actual amount of that grant could fluctuate based on 

how California contributes to public higher education and, actually, 

put pressure and leverage on the state legislature by saying if the 

grant were on national average $2,500, but in California the grant 

could be $3,200 because it is a more commonly supported tax system and tax base, our appropriations are higher. 

Those appropriations could be shaped, or at least the grant size 

could be shaped, based on tax effort of those states either to advantage those states that want to continue supporting higher education or disadvantage those states that think that it is in their 

best interests to remove themselves from these appropriations. 

This also does another thing. It creates an environment where 

states cannot supplant the federal resources, like we state in Title 

1, and it works very much like the Title 1 proposals in our Title 

1 schools. There is a provision in Title 1 that says that the states 

will not supplant these monies with state monies, and it is designed, in the same similar design, to aid schools that support lowincome students and aid schools to support them throughout their 

educational careers. 

Mr. TIERNEY. Thank you. 

Sir? 

39

Mr. BASSETT. Congressman Tierney, we both live in a state that 

has not taken very good care of public higher education over the 

years, and one of the excuses really is the strength of the privatesector system, which is not a very good excuse for taking such bad 

care of the public system. Even though I am at a private university, you may know that Governor Patrick recently asked me to cochair a committee to look at the governance structure of public 

higher education in the state. 

The only thing I would encourage—and the federal financial aid 

works in both the public and private sector, but even limiting the 

discussion to the public sector for the moment—is I would encourage us to study carefully the consequences of any of these linkages 

that we develop here. How are states likely to respond if the formula is the kind of one that President Alexander talked about? 

What will universities respond? How will CFOs respond to this 

structure? 

I think something needs to be done. I think you are probably on 

the right track with the proposal here, but I also know that all 

these linkages have consequences that one does not predict when 

one sets them up, and simply looking ahead to the next stage and 

seeing what that would probably be would probably be helpful. But 

I do believe that some of our states are taking a lot better care of 

public higher ed than others are. 

Mr. TIERNEY. Thank you, sir. 

Ms. Wellman? 

Ms. WELLMAN. I am not sure if I have a lot to add. I like the 

shape of the proposal that Dr. Alexander put out. It makes sense 

to me. 

The one thing I would hope could be considered is to add a tension through accountability metrics about how resources are used 

and look for examples of ways that degree attainment is increased, 

not just make it about increasing money on top of money. 

It has to have indicators of spending and productivity to provide 

incentives for the states and the institutions to do a better job of 

paying attention to money. 

Mr. TIERNEY. Well, thank you very much. 

Mr. Chairman, thank you for your courtesy as well. 

Chairman MILLER. Thank you. 

The gentleman from Florida is recognized for 5 minutes. 

Mr. KELLER. Well, thank you very much, Mr. Chairman. I want 

to especially thank you for holding this very important hearing. 

Congress is very concerned about the skyrocketing cost of college 

tuition. Tuition is up 31 percent at public 4-year colleges over the 

past 5 years. What good is it to college students if Congress raises 

Pell grants by $2,000 only to see colleges respond by raising tuition 

by $3,000? 

The author of the College Board report, Ms. Sandy Baum, was 

quoted recently in USA Today, on October 23, 2007, saying, ‘‘Clearly, finding some way to temper prices is necessary.’’

We have heard some excuses that, ‘‘Well, we have expenses that 

are going up, and health insurance and electricity and other bills, 

and inflation has played a role in this,’’ and I frankly think that 

that is an unacceptable excuse. When I pulled the numbers, the 1-

year change in inflation, the CPI, is 2 percent, yet college tuition 

40

at 4-year universities, according to the College Board, is up 6.6 percent in the last year, triple the rate of inflation. Over the past 5 

years, the change in inflation is 15.1 percent, yet the tuition at 

public 4-year universities is 31 percent, double the rate of inflation. 

I am not saying that we are so frustrated that we are about to 

implement price controls. I am saying the skyrocketing cost of tuition is starting to tick people off around here, and we have to get 

a handle on this situation. 

I do not want to paint too broad a brush. When I look at states like California, you can get a community college education for $633 

a year. What a spectacular bargain. And then after you graduate 

from a 2-year community college, many of their universities have 

articulation agreements that allow you into their 4-year schools for 

a mere $4,971, again a bargain. My home state, not to brag, but 

is also a great bargain, $2,000 to go to community college, $3,300 

to go to a 4-year school. 

And so let me begin by, Ms. Wellman, asking you some questions. And, certainly, I do not blame any of you all who are testifying for any of these problems, actually, and Mr. Alexander here 

is from one of the best states, California. 

But, Ms. Wellman, when you look at the increasing costs that 

colleges or universities have to deal with in terms of their overhead, what percentage of that is the salaries of the college professors and the staff? 

Ms. WELLMAN. It is a different number in different institutions, 

and the general pattern is that it has been going down. 

Mr. KELLER. College or university professors are getting decreases in their salaries? 

Ms. WELLMAN. There are two things going on. The high-end faculty are getting paid more, and the regular faculty are not getting 

paid that much more, and most of the faculty are part-timers, 

so——

Mr. KELLER. So take the high-end guy. Let us say it is a famous 

professor that you need in your chemistry department because he 

has published some stuff. He is getting a bigger percent increase 

because he is a valuable commodity, and you have to compete with 

other universities, correct? 

Ms. WELLMAN. Yes. 

Mr. KELLER. But when you talk about the lower-end person, 

someone who teaches, you know, Intro to History to an undergrad 

at community college, they are still getting a little bit more than 

they were the year before, but not a whole lot more. 

Ms. WELLMAN. That is right. 

Mr. KELLER. Of a university president’s budget, when he looks 

at electric bills and costs of other things, what percentage typically 

are salaries for the professors and staff? 

Ms. WELLMAN. I think the standard in the industry is that it is 

someplace between 80 percent and 90 percent salaries. I think the 

data show that it is actually going down a little bit, but it is a hefty 

percentage. The biggest single area of spending increase in institutions has been merit-based student aid, number one, followed by 

benefits, health benefits. 

Mr. KELLER. Mr. Alexander, as someone who runs a university 

out there, can you give us any suggestions, based on California’s 

41

success in this area, as to what we might do or what might be done 

to address the increasing costs of tuition? 

Mr. ALEXANDER. I think it is very important. I think you are hitting in and around a very important issue that I have made one 

recommendation in my testimony that we should pay a lot more attention to, is instead of, I think, incorporating everybody in sort of 

the same criticism, I think we need to pay close attention to the 

expenditures, per-student expenditures. 

I think it will tell the whole story of college costs, and for the 

last 20 years, you will find out which institutions have increased 

their expenditures because they are serving more students, which 

ones have not changed their per-student expenditures. 

I am speaking on behalf of a university since 1985 that has gone 

from about $11,500 a year in per-student expenditures to about 

$13,200, so we really have not changed very much. But I know 

there are other institutions out there that have gone from $30,000 

to $80,000 per student, and I think the expenditure considerations 

are very important to pay close attention to. 

And in addition to that, I think that then the federal government 

should play a role in identifying those institutions who are doing 

a good job and then rewarding or supporting those institutions that 

are doing a good job in keeping costs down and being efficient to 

the public. 

Mr. KELLER. Thank you. 

Mr. Bassett, sorry I did not get to you, but my time has expired. 

So, hopefully, one of the other folks will be able to ask. 

Chairman MILLER. Do you want him to answer? 

Mr. KELLER. Mr. Bassett, do you have any suggestions for the 

chairman and other members here as to what we might do or what 

might be done to address the skyrocketing costs of college tuition 

or the increasing costs, however you phrase it? 

Mr. BASSETT. Well, you put your finger on the reasons for the increases in costs, clearly. There are utilities. We talked about this. 

There are tremendous increases in technology costs. As I indicated 

just at my own school, utility costs were up 152 percent over a decade; technology costs, 189 percent; health insurance, 90 percent; 

and regular insurance, 90 percent. 

But, to some extent here, it is still the labor-intensive industry 

that it is, people, and if you do not change the ratio of the number 

of faculty members to the number of students or if you do not 

change replacing a full-time professor with a teaching assistant or 

a part-timer, those costs continue to be probably a little out of 

whack with consumer price indexes. 

If it costs $40,000 a year to educate a student at a good private 

college, and we charge them $30,000, the other $10,000 is coming 

from philanthropy, from the endowment, from the annual fund. To 

provide education of the same quality at a public, however, is going 

to have the same cost factor, and if you are only paying $7,000 of 

that $40,000, the rest is going to be covered by taxes, or you are 

going to develop your own philanthropic foundation, as you have to 

do, but philanthropy, taxes and tuition are really the three sources 

of income here. 

42

I think we have to work together on containing costs because I 

agree with you. Americans are saying, ‘‘How do we limit the cost 

of college education?’’

But I do know the Pell grants do not lead to higher tuition. In 

fact, the Pell grants help us keep tuition lower because in our market—and, again, I cannot speak for the wealthiest of the universities—if we raise tuition above a certain point, we do reach a tipping point, and we are going to lose revenue, and the existence of 

a Pell grant makes it unnecessary for us to raise tuition as much 

as we would have to otherwise or to reduce quality, which is the 

other option. 

Chairman MILLER. Thank you. 

The chair is going to be recognized for his time. I recognized another member previously, for those who just came in. 

The issue that was raised by Mr. Tierney and, Mr. Alexander, in 

your testimony, the idea that somehow we have to not supplant 

language or something along those lines, we have that in almost 

every other big grant program to the states. 

In this particular situation, the grant program is not exactly a 

grant program. It is access to federal loans, and it is access to the 

Pell grant and a few other things that we do in higher education. 

I used to be staff in the state legislature, and many members here 

used to be members of the state legislature. You do make decisions 

based upon what you put at risk with respect to the federal government, whether it is Title 20, whether it is Medicaid, whatever it 

is, you weight that, and small cuts sometimes carry high risk, and 

legislatures do not do that. You know, we just made this commitment of some $20 billion in 

various ways to higher education, and yet we can see that if we 

continue this pattern, that advantage will be nullified rather rapidly, and so I think that the idea of trying to construct a partnership here where we cannot just keep putting money in at the top—

you know, the idea that you respond to Mr. Tierney that you might 

have a partner—what did you call it? A Pell grant? A shadow? Or 

the one that follows the Pell grant? The original from the——

Mr. ALEXANDER. Yes. Cost of education allowances. 

Chairman MILLER. Yes, but we now live under a pay-as-you-go 

system, so I have to come up with billions of dollars to once again 

try to get you, the states, to meet their public obligation to their 

public institutions. I do not think that we can do that, and that is 

why we have these other ways of dealing with it, with the maintenance of effort or supplanting or whatever regulations we put in 

place. 

I think to more and more members of Congress that is starting 

to look like a wise decision. Otherwise, we are on a fool’s errand. 

We just keep shoveling coal in at the top, and they just keep taking 

it out the bottom, and that is not working out for the families we 

represent, and it is certainly not working for the use of federal tax 

resources. 

Having said that, that is the easy part. Constructing it is the difficult part because you do not want to start harming individual institutions or students, and it sort of leaves out of the equation the 

privates in this one because we are talking about the obligation of 

the states. 

43

And I just do not know if you want to elaborate on this, but, you 

know, we in this committee have been struggling with this for a 

number of years, and after you get past transparency, there are not 

many levers left unless you move to a larger maintenance of effort 

idea. 

Mr. ALEXANDER. I would say a couple of things have certainly 

evolved perhaps the way that they were not supposed to. The federal government 40 years ago was supposed to augment states, not 

become the primary revenue supplier through grants, loans and tax 

credits, and for the first time in the history of American higher 

education, the federal government now is at $90 billion in tuitionbased assistance, while the states are at $85 billion. So they have 

passed the states. The states have not been keeping up with their 

obligation. That is certainly true. 

Anecdotally, when I was in the State of Kentucky, I was standing 

in the parking lot, and the speaker of the state senate of Kentucky 

leaned over to me and said, ‘‘Why should we give you more resources when you can just get it through federal loan and grant 

programs?’’

This is an interesting comment because it basically said, ‘‘I am 

going to get re-elected by not helping you, but you can help yourself 

by increasing tuition,’’ ultimately getting students in greater debt, 

pushing students into greater debt. 

I think more legislatures are understanding this is an easier out 

than many of their other obligations. 

And with regard to private sector, there are many private institutions out there who have also remained true to serving low-income students and large numbers of low-income students. Those 

are generally your lower-cost private institutions also, and they 

could also be included in this federal program that creates cost of 

education allowances to help them educate, retain and graduate 

those students. 

If I could add, my greatest concern is that the incentives work 

in the opposite fashion right now, and universities are quickly fleeing their responsibilities to low-income students all over the United 

States. We see it from Maine to the State of Washington, and if 

you have followed these trends over the last 20 years, the only two 

states who really have increased their Pell grant eligible students 

substantially throughout the state systems have been states with 

large demographic changes, like Texas, New Mexico, Florida and 

California. So it is a national issue of national significance. 

Chairman MILLER. Thank you. 

Mr. Castle. 

Mr. CASTLE. Thank you, Mr. Chairman, and thank you very 

much for the hearing. 

And thank all of you. 

I am particularly interested in this subject, and I have several 

questions. I would like to get into the actual costs themselves. 

I see, Mr. Bassett, for example, in this enhancing affordability 

and accessing independent higher education chart all the good 

things that some of these schools are doing, and I look at the 

schools, and I wondered if any of us could get in most of these 

schools. I mean, we have Amherst and Brown and Columbia, Davidson, Stanford and Harvard and Princeton or whatever. It is nice 

44

that those schools are doing it, but I am also concerned about the 

vast majority of our kids who need education. 

I am one who believes that we should educate every child possible in this country for economic reasons and maybe societal reasons in general, and the question I have is directly to the actual 

costs of all three of you, and as either heads of organizations or as 

heads of schools or whatever, you have had some exposure to this, 

but I am interested in innovations that may be going on that could 

save costs. 

I just jotted down some things: for example, using retired professors. Every one of us in this room could talk about some professor 

who is probably 70 years old now who was really extraordinary 

when we there who probably on a per diem or per hour basis would 

be willing to come back. 

Are there volunteers available? We use them in political campaigns? Are there coaches who would volunteer to some degree? 

What about alternative energy, going to solar and those kinds of 

things? I mean, various ideas out there that perhaps could help 

with these costs because I do not care how you cut it, the costs of 

higher education have gone up faster than the cost of living in this 

country. 

We need simply to deal with this, and maybe this is one way we 

can deal with it. Are there innovative ideas out there that have either been tried or could be tried that we could be looking at that 

you have run across or tried yourself or whatever? Any one of you. 

Ms. WELLMAN. I think the short answer is yes, and one of the 

things we are working to do is identify those examples of effective 

management practices that have reduced costs and, at the same 

time, gotten more kids to and through college. 

Course redesign has been tried, and it is very successful in a 

number of colleges to increase the students’ success in first-year 

programs. The programs are less expensive. The students learn 

more. They retain more. They graduate more. 

There have been a lot of colleges that have done good things with 

energy conservation, and if you look at it nationally, there are good 

numbers and a good track record on cost reduction in energies. 

There is administrative savings and information systems savings. 

The biggest changes are going to come when we are able to look 

at different ways of using instructional staff to put more full-time 

faculty in classes for the freshman and sophomore year and get 

those students retained and on to graduation. 

We fund our systems now in a kind of lopsided way. There is 

more money per student spent the farther the student gets in the 

career, and if we are going to be smart about being cost effective 

and increasing attainment, we can move money around to really increase productivity without compromising costs. It can be done. 

Mr. CASTLE. Thank you. 

Mr. BASSETT. I think that most of the colleges I am familiar with 

have done a number of these things, certainly energy reduction, reducing temperatures. I mean, my university was proud to get the 

first gold rating from LEEDs on a new building in the City of 

Worcester, but that is part of a larger energy commitment we have 

made to save money there. Using retired faculty, yes, and often it 

45

does reduce costs, but it is at the margins. It is not something that 

is going to have a big impact. 

Ms. Wellman’s point about instructional costs, though, is not an 

unimportant one, and a lot of the less fortunate savings maybe 

right now we are doing come from less expensive per student teaching at the lower levels. If we start taking that as seriously as we 

should, it could potentially increase costs so we have to be creative 

in how we build that in. 

But consortial arrangements and purchasing, state arrangements, such as one they have, I believe, in Wisconsin that Representative Petri helped set up for savings—those colleges that operate in a very tight market have to be looking at all these things. 

What we may need is a better information-sharing system, a best 

practices communication system where we could all more efficiently 

share new ideas with each other for cutting some of those costs. 

Mr. CASTLE. Dr. Alexander, do you have any thoughts on this? 

You have about 30 seconds. 

Mr. ALEXANDER. Just briefly, in California, we have some environmental restrictions that force us to do a lot of these things at 

much earlier times from the cars we buy, fuel-efficient hybrids to 

solar panels to all our new buildings being green buildings. So we 

are moving in this direction. Sometimes sustaining things initially 

and working on sustainability initially costs you more up front and, 

actually, the savings do not come for 10 or 15 years down the line. 

I have 11 unions on my campus that, and using part-time or retired faculty does sometimes get into that, but we continue to grow 

as an institution, and our expenditures are relatively flat, and we 

serve about 1,300 to 1,500 new students every single year, and our 

campus is pretty crowded. 

So we are doing everything we can to serve those students as efficiently and effectively as possible, and we will continue to look for 

ways to do that as well. 

Mr. CASTLE. Thank you. 

I thank the panel. 

Chairman MILLER. Thank you. The gentleman’s time has expired. 

I was just looking at new information put out by the Public Policy Institute in California this morning, and it said that, ‘‘In Californians’ minds, the state’s economic vitality is closely tied to higher education, with 76 percent calling the state’s college system very 

important to California’s future. It is the belief of most residents, 

68 percent, that the state’s economy will need a higher percentage 

of college education workers in 20 years.’’

They recognize that these institutions are economic engines for 

the future of the state, and yet 43 percent say they are very worried and 32 percent say they are somewhat worried about being 

able to afford college for their youngest child. So they recognize this 

as an asset to the state, and yet they have this anxiety about 

whether they are going to be able to participate in the benefits of 

that asset. 

And I think sometimes you know, when we see the state legislatures—and I know there are economic cycles in states—walking 

away from this on the assumption that, well, you can just make it 

up in tuition, that is what creates that anxiety. 

46

Mr. Courtney, you are recognized for 5 minutes. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

Dr. Bassett, in your handout, you had some examples of colleges 

that are doing different ideas or, you know, pointing out different 

ideas in order to make college more affordable, and there were a 

couple of colleges that have actually eliminated using loans and 

just replacing them with grants—Amherst, Baylor, Brown University. Are they able to do that just because they have large endowments? I mean, what are they doing right there that allows them 

to do something that extraordinary? 

Mr. BASSETT. Yes. [Laughter.] 

All of the rest of us would like to do that because it is tremendous P.R. I would say it is large endowment. It is also a larger percentage of the students able to pay full tuition, again, the two 

sources of revenue being their endowment and gifts and tuition. 

Clark, I find, has the smallest percentage of families making over 

$100,000 of any lead private in New England, and, therefore, we 

may have the smallest percentage of full-paying students of any of 

the group of schools we compare ourselves with. 

I would love to be able to say, like Harvard, like Amherst, no 

more loans, grants if you need it. We would try to come as close 

as possible to that, but we cannot get all the way there ourselves, 

and I think that is true of 95 percent of the colleges. 

Mr. COURTNEY. I kind of figured it was like that. 

Mr. BASSETT. Yes. 

Mr. COURTNEY. And, Mr. Alexander, the other two witnesses 

have sort of expressed their opinion about the question of whether 

or not increasing Pell grants has an effect of pushing up tuition. 

I do not think you have actually weighed in yourself specifically 

this morning on that. I am just curious whether or not you wanted 

to at least go on record as far as what your thoughts are on that. 

Mr. ALEXANDER. On the record, I will say I have studied this 

issue for quite some time as well, and I have seen virtually every 

report that referenced this area, and Pell grants are the least cost 

sensitive or price sensitive of all the grant programs. They are 

more income sensitive, which is wonderful. 

When you move into the other programs, when you move into 

SEOG, when you move into the federally subsidized loan programs, 

when you move into the unsubsidized loan programs, and when 

you take into account state individual grant programs which are 

highly cost sensitive to the extent that many of them even have 

been started under the guise of tuition equalization programs, I 

would say that is not the case with most of the other programs, 

and it does tend to give institutions that have higher inflated sticker prices more aid or qualify their students for more aid, but that 

is outside of the Pell grant, and those are the other programs that 

exist. 

Mr. COURTNEY. You made a reference to the fact that New England was one of the places where the public support at the state 

level has been a little weak, and coming from Connecticut and 

being a former state legislator, I can plead guilty to that assertion 

because I think it is clear that that has occurred and there has 

been a corresponding increase in tuition. 

47

I think the chairman is right that having been a former state 

legislator, when you are doing budgets and you are aware of the 

fact that, you know, whether it is child and protection services or 

Medicaid budgets, if you are going to lose money, you tread carefully whereas, obviously, it does seem like an ATM card when you 

are looking for ways to sort of balance the budget. 

But I am still sort of waiting to get that specific suggestion 

about, you know, how you implement that maintenance of effort 

sword over a state legislature. I mean, what do you threaten them 

with if they do not adequately fund this part of state government? 

Mr. ALEXANDER. Well, you have the carrot and the stick circumstance, and I am concerned, too, that down the road, if we do 

not address this issue, we are going to be back at this table every 

5 years like we were in 1997, the college costs commission 4 years 

ago when I was here representing Kentucky and what we were 

doing. 

I think that there are lessons to be learned on how we have funded schools and poor students in Title 1 and how we have not supplanted state resources in Title 1 funds for K through 12 education. 

We have not even ventured down this road, and, in fact, we do a 

better job at even knowing where our low-income students are in 

our K through 12 sector than we do in higher education. 

We have institutions who do not want to talk about their Pell 

grant eligible numbers and who do not want to talk about their income levels of the students that they serve, and they may give a 

lot of money and a lot of aid to a small number of students, which 

looks good for the small number of students, but with the nation 

with 25 percent children in poverty who are all going to need some 

form of access to higher education, I think a much more comprehensive system that rewards institutions based on state appropriation levels and sets it by tax effort, could actually encourage 

states like Connecticut, states like Colorado, quite frankly, who is 

a rich state that does very little to nothing for higher education. 

They simply rely on out-of-state students to come in and fund public higher education. 

I think that you could devise this quite easily, a system that rewards states or pulls lower-funded states up from lower areas or 

puts pressure on them to keep funding or put more money into 

higher education while at the same time rewarding those states 

that continue to fund publicly accountable systems of higher education in terms of keeping costs low, like North Carolina and California. 

Chairman MILLER. Mr. Petri? 

Mr. PETRI. Thank you very much, Mr. Chairman. I just have two 

questions of the panel, and the first one actually, Mr. Bassett, referred to briefly. I was going to mention that for the last 6 years 

or so, myself, Mr. Obey and others from Wisconsin have been working with our organization called WAICU—that is the Association of 

Independent Colleges and Universities—in an effort to help them 

consolidate backroom functions. Universities or colleges are a series 

of small businesses and they do not really need to replicate a lot 

of things back office that can be consolidated without merging the 

front and instructional classroom experience where it is not appropriate. 

48

They have done that with information technology, computer programs, with health care, I think, the dining halls and energy purchases and a number of other areas. Significant savings have been 

realized, and I just wonder if you would care to comment on that, 

whether that is a fruitful area. Is that being done in other states, 

or is this something that is only unique to Wisconsin? 

Mr. BASSETT. It is being done. If done, it is done at a local consortium level. For example, we have 13 colleges in the College of 

Worcester Consortium, public and private, and a lot of those things 

are being combined, the back office, maybe not as far as they could 

go, but having both public and private at times in a state can limit 

the number of things you can put there. 

But the committee that I am now chairing in Massachusetts 

looking at public higher education in the state is beginning to raise 

that question about the public system in general, that there are all 

kinds of consortial savings that lie out there for combining some of 

the back-office operations that they have not yet begun to do in the 

public sector generally. 

So I think whether or not it is a public-private combination or 

public sector or just the private sector, there are a lot of things that 

those, as you say, small businesses can be doing that can lead to 

savings that are savings of efficiency and not as I was speaking before cost cuttings that will reduce quality. None of these things will 

reduce autonomy and they will not reduce quality either. 

And I think what we need again is a way of sharing our best 

practices around the country as to what exists out there that we 

can emulate and learn from each other. 

Mr. PETRI. One other area is dealing with federal financial aid 

itself, and each school has staffs trying to learn all this. It actually 

can be done quite simply. The private financial guarantee agencies 

have kind of resisted that because one of the ways they have 

signed up colleges is to provide some of the services as a benefit 

to the colleges. The direct loan program does not do that. But this 

is an area where significant savings or efficiencies can be realized, 

and it actually will help save the federal taxpayer a little money 

if they adopt a more efficient program. 

My time is limited. Let me just switch to another subject that I 

did not hear mentioned that does, I think, drive up costs in many 

instances, or at least disrupts the normal planning process, maybe 

for good, maybe for bad, and that is the accreditation process, and 

I wonder if you could comment on whether accreditors place arbitrary burdens or policies that might be outdated or burdensome or 

even appropriate on institutions and whether the accreditation 

process is driving up costs in America. 

We all should be looking at it as a way of trying to, you know, 

make sure we have quality, but that we do not just let different 

people put their agenda in and say, ‘‘You have to build this building or put in that library’’ or whatever it is because some particular 

part of the university takes over and hijacks the whole process. 

Mr. BASSETT. Actually, it is a good question. I thought it was 

going to go in a different direction. I thought you were going to ask 

what has been the increase to budget caused by state and federal 

regulations, which is not accreditation but sometimes those factors 

do increase costs also. 

49

Accreditation, generally speaking, I think, is probably one of the 

least expensive qualitative controls per hour in the sense that most 

of the accrediting agencies are working with an awful lot of volunteer consulting help coming from administrators and faculties in 

universities and associations. 

Whether it is the five regional accrediting bodies in America or 

whether it is the many, many professional accrediting bodies for 

nursing and law, physical therapy and everything else, there is—

of course, most of this usually begins with a self-study, which does 

take resources to do, but asking the very questions that Congress 

and the Secretary have been asking us, how effectively are we operating as an institution. An outside body visits and comes up with 

a report, which, while it creates a bottom line of accountability, 

also provides a great deal of help to the institution in improving 

itself. 

So it is not clear to me at this point that accreditation is one of 

the excessively expensive operations that universities and colleges 

pay for, if they believe in accountability, but my colleagues may 

have other perspectives on that. 

Chairman MILLER. The gentleman’s time has expired. I have 11 

members waiting for——

Mr. Andrews? 

Mr. ANDREWS. Thank you. 

I would like to thank the chairman and the committee for having 

the hearing. 

I think that one of the things I hear most frequently from my 

constituents is their stress and worry about the very high cost of 

paying for higher education, and this is a problem that needs to be 

approached by looking at data, and I think we have had three excellent witnesses this morning to help us do that. 

I have some questions and maybe if there is some data that we 

have not heard about, I could learn where to find it. 

What percentage of students in American higher education pay 

the sticker price? That is to say net of Pell grants or any institutional scholarships or grants, what percentage of American students either borrow or write a check for the whole amount themselves? Do we know? 

Ms. WELLMAN. Not off the top of my head, but I bet you roughly 

60 percent or more get some form of financial aid at the higher 

number——

Mr. ANDREWS. So my hypothesis would be that the relevant price 

comparison should not be the top line. The most relevant price 

comparison for a student is the bottom line of what he or she must 

borrow or write a check for to go to school. 

The second hypothesis: I think that there is a misconception that 

there is not much price differential in the marketplace for people 

to choose. In other words, all schools cost about the same. I do not 

think that is true. Are there data available that compare the price 

range for what I would call similar schools? And I would, I guess, 

President Bassett this question. 

Not all NAICU schools are alike, I understand that, but many of 

them are smaller, private, 3,000-4,000-or 5,000-student schools that 

focus on liberal arts or similar areas. Are there data on the price 

ranges for those kinds of choices? 

50

Like in my state, Drew University is a member of your association, as is Fairleigh Dickenson, I believe, and they are fairly similar schools. Are there data on the price range that one can choose 

from among types of schools like that? 

Mr. BASSETT. I do not have the figure at my fingertips, but I believe if you go to the new U-CAN Web site, you could probably do 

a study of the 700-plus colleges that are involved on that Web site 

and do a study of the small liberal arts colleges in a certain part 

of the country, both for sticker price and for net tuition price. 

Mr. ANDREWS. And can any of you tell me if there are data that 

express the range of price? I mean, if you buy a mid-size car, right, 

I guess it ranges from a low of $27,000 to a high of $45,000, 

$50,000, depending upon what you put in the vehicle. Is there a 

similar discussion of the range of prices for similar categories of institutions? 

Mr. BASSETT. Probably, although even among the liberal arts privates, there would be different categories depending on where they 

are in the market, I think. 

Mr. ANDREWS. Well, let me test another hypothesis and ask each 

of the three of you to respond to this. One of the reasons why tuition inflation has outpaced regular inflation is that there is this 

considerable amount of cross-subsidizing going on where students 

who cannot otherwise afford to go to the school are having their 

tuition cross-subsidized in the form of institutional aid by other 

students. 

Now I do not say that accusatorially. I think that is a good thing, 

but when we talk about, you know, other institutions pay higher 

health insurance bills, higher heating bills, higher energy bills, 

how come you are at 61⁄2 percent and they are at 2 percent? Well, 

one of the reasons is that one of the areas that make up that difference is money that the school is collecting from students’ tuition 

and then allocating it toward institutional aid. 

Here is my question: What percentage of the difference between 

tuition inflation and regular inflation can be attributable to institutional aid that is covering for what we are not doing in Pell grants 

and states are not doing in state budgets? 

Mr. BASSETT. The answer would vary somewhat from college to 

college depending on the kind of endowment they have to put into 

the need-based scholarships for students. If they do not have a 

large endowment for that purpose, then it would be a larger percentage of that gap you are talking about that is being covered by 

the tuition that others are paying. If you have a huge endowment 

that can cover that need-based scholarship aid, that extra money 

is probably going into hiring extra chemistry professors and having 

a better laboratory. 

Mr. ANDREWS. Ms. Wellman, are you familiar with any answers 

to that question? 

Ms. WELLMAN. We can get the data. I do not have it in my head. 

I want to say it is the average discount, the gap between what revenue from sticker and what is obtained for spending, is close to 40 

percent. 

Mr. ANDREWS. It is a lot of money. 

Ms. WELLMAN. Yes, it is a lot of money. 

Mr. ANDREWS. Mr. Alexander? 

51

Mr. ALEXANDER. This is not true for most public institutions. It 

is a little different for public institutions, especially when we do 

have our rates posted and the ranges within our own institutions. 

Then we get into out-of-state issues, which most students have to 

go into the individual states. 

But one-third of every dollar that we increase in our fees, in our 

tuition in the State of California, it is mandated that we put into 

state grant institutional aid. If we increase $250, roughly $80 to 

$90 of that will go into an institutional aid that then we actually 

distribute within the CSU system to different students——

Mr. ANDREWS. I appreciate it. I see my time has expired——

Mr. Chairman, I would just say that I am glad the committee is 

looking at this—I think what we have created here is a situation 

where we have an implicit student tax where some students pay 

a higher fee to go to school to help their brother and sister students, which I think is a good thing, but we have to ask ourselves 

whether that is the most progressive and fair way to pay for that. 

Perhaps the system that raises more in Pell grants and public aid 

that is based on a more progressive and all-inclusive means of raising revenue is a fairer way to do that. 

I yield back. 

Chairman MILLER. Mr. Bishop? 

Mr. BISHOP OF NEW YORK. Thank you, Mr. Chairman. Thank you 

very much for holding this hearing. 

I want to go back to this issue of cost drivers that we were talking about before. Ms. Wellman, perhaps you can help me, but when 

I worked with these numbers every day, these were approximately 

the case, that about 60 percent to 70 percent of an independent institution’s annual expenditures were in salary and fringe, about 10 

percent in operation and maintenance of plant, maybe about 5 percent in debt service, maybe about 15 percent in unfunded student 

aid. Are these approximately right? 

Ms. WELLMAN. Its individual license can vary, but, yes, it sounds 

about right. 

Mr. BISHOP OF NEW YORK. Okay. So, if we are going to focus in 

on the issue of holding the line on price, the most fruitful area for 

trying to hold the line on expense would be in salary and fringe, 

correct? And we already have a situation in which the sticker price 

is less than the cost of providing the educational service to the student. So we have a real dilemma here. 

We also have a situation that is layered with complexity. Higher 

education is labor intensive. We know that. There is also an enormous amount of competition, particularly in the independent sector. There is also an enormous growth in discounting, particularly 

in the independent sector, so it is very difficult to chart, if you will, 

the right path. 

And what we are struggling with is, as the chairman said, we are 

putting money in at the top end, $20 billion more for Pell, and, 

hopefully, that will go a long way towards helping needy students 

attend, but what is the best role for the federal government to play 

beyond sharing of best practices in terms of helping institutions 

deal with this personnel cost issue? I mean, is there a role for the 

federal government to play? 

52

Ms. WELLMAN. My reaction is two—one is data. The federal government can make data about spending much more accessible, 

make it more readily benchmarked, get it in the hands of governing 

boards and institutions and state legislators so that the conversation is not just once every 5 years, but ongoing, about where you 

are spending your money, where you can do a better job. This is 

a topic that is way too shrouded in technical detail and not accessible, so the feds have a role to play there. 

The feds also have a role to play in tackling the root causes of 

increases in spending on benefits. One of the biggest areas of 

growth in spending is health care benefits, and you know that conversation, and I will not belabor it here. It goes well beyond the 

jurisdictions of most education committees or budget committees, 

and it is a complicated topic because everybody lives with the consequences and nobody controls it. But if the federal government 

could get the rate of increase in health care costs down, that would 

make a huge difference. 

Mr. BISHOP OF NEW YORK. Okay. Dr. Bassett? 

Mr. BASSETT. Congressman, you put your finger on a main issue. 

Personnel costs are an enormous part of the budget, and even 

though all of those other factors have gotten more expensive, still 

a large part of our budget comes from education being so labor intensive. 

I would love to come up with creative ideas to allow a professor, 

for example, to work with more students per professor than they 

do now, while still keeping the quality of the student-student and 

student-faculty interaction at the level that we all would want in 

going to college, rather than it simply becoming a kind of factory 

there. 

I think health care costs are one factor there. There may be, 

however, certain kinds of pedagogical advances we can work together on that will help us change some of those ratios because I 

agree, 10 years from now, it may not be us back here, but somebody is going to be back here raising those same issues. 

But it is so personnel intensive, the value of higher education is 

personnel intensive, that unless we can find some ways to make 

ourselves more efficient on the personnel side—and I say that 

knowing this can lead to reduced quality—we are not going to get 

our arms around this completely. 

Mr. BISHOP OF NEW YORK. I have very little time left. But, Dr. 

Alexander, you have made several comments this morning about 

the importance of focusing on needy students and seeing to it that 

low-income students represent the first priority, both of the federal 

government and, I believe, the state governments. 

Given that, can I just ask for your opinion? We have moved now 

to a merit-based component to Pell, some, I think, $400 million. I 

am not sure what the number is in the current year. What is your 

thought on that? Is that the best use of a federal resource, to add 

a merit-based component to Pell, or would that money be better 

spent on additional need-based aid? 

Mr. ALEXANDER. I think there is a merit-based movement in the 

United States that I think is also a backlash to the public and private tuition increases, and you are seeing this backlash in many 

forms, in HOPE scholarships in the State of Georgia. I know we 

53

have a presidential candidate who is advocating a national meritbased scholarship. I am very concerned about this direction as a 

nation, and many governors have been elected on the platform of 

merit-based scholarships and developing merit-based scholarships. 

I think, actually, the best use of funds, I believe, at this time is 

to create what I have been mentioning earlier today and discussing, is to create ways to reward the institutions and states for 

maintaining their commitment to public missions, which means enrolling, supporting, retaining and graduating low-income students, 

and I do believe that until we really address this issue that we are 

only going to see marginal gains down the road for higher education, and we will have another committee meeting at some point 

down the road. 

Mr. BISHOP OF NEW YORK. Thank you very much. 

Chairman MILLER. Okay. Mr. Sestak? 

Mr. SESTAK. Thanks, Mr. Chairman. 

My first question—I think both the chairman and I walked in 

while he was talking—may have already just been addressed here, 

but to make sure—2 weeks ago, I met with about a dozen presidents of universities and colleges in my district for a second meeting on the cost growth because it is what I heard throughout the 

campaign when I ran. 

And their statement was not unlike yours, Mr. Alexander, that 

we really need to grow need-based states, so to speak, you know, 

where the federal government’s role here truly might be a carrot, 

yes, but a stick where the money in the grants or the loans, whatever we give to the states, actually forces them to focus more upon 

the lower income, the needs, and they say that because it was a 

mixture of private and public universities and colleges. There has 

been in my state of Pennsylvania a movement of those who can afford private, you know, going to state where they can more readily 

afford it. 

And so is that what you are talking about, is that it is conducive 

to the states to get more money or to get money only if X amount 

is going to needs-based. Now I know in my state we have so much 

set aside, but it is not near what it might be. Is that what you are 

suggesting? 

Mr. ALEXANDER. Well, this is where the Pell grant differentiates 

from a lot of state need-based programs. The devil is in the details 

of these need-based programs. The Cal Grant B, for example, is 

very income-based. The Cal Grant A is perceived as a needs-based 

program, but is a very merit-based program. 

I think one mistake we make in higher education is not assuming that $85 billion in state appropriations are not need-based support for students to keep costs low because that is truly, I think, 

the biggest issue, the biggest issue for us, and the dollars that the 

state puts into——

Mr. SESTAK. I apologize. You said it better than I did, is that the 

attraction to federal monies is that their appropriations is going towards need-based more. Is that correct? 

Mr. ALEXANDER. I am sorry? 

Mr. SESTAK. The incentive from federal legislation might be that 

the $85 billion that they are appropriating is more focused on needVerDate 0ct 09 2002 14:49 May 02, 2008 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\FC\110-70\38493.TXT HBUD1 PsN: DICK
54

based because, if it is not, they would not get X amount. There 

would be an attraction in the federal law. 

Mr. ALEXANDER. Well, it should be as state appropriations are 

supposed to protect equal opportunity and to make sure costs are 

staying low. That is the main purpose, to offset those costs and to 

make sure that public institutions do not grow, escalate their increasing costs for higher education. 

So, in many ways, it was devised, state appropriations, for higher 

education. Initially, it was—certainly in California until the 

1980s—to provide free education for as many people as possible. So 

protecting those resources and ensuring that states remain committed to those resources is, I think, the biggest concern for the 

public sector. 

Mr. SESTAK. But you can do that by helping to make federal aid 

dependent upon focusing more of their $85 billion towards needbased. Is that wrong? 

Mr. ALEXANDER. You can, and, you know, this is not precedent 

setting, by the way. The SSIG program was started to encourage 

states to adopt need-based programs in 1972 when only six states 

would allow them because of constitutional issues of public-private 

mixes, and rapidly 50 states quickly adopted them within the next 

10 years. 

The difference now is that many of those need-based programs, 

some would argue might be more institutional need as opposed to 

student need, and the cost of attendance or the sticker prices that 

drive a lot of that aid can be fluctuated and can advantage highercost institutions and students who pick higher-cost campuses as opposed to focusing in more need-based areas based on students and 

access and real need and income. 

Mr. SESTAK. Ms. Wellman, in your testimony, you talked about 

incentivizing from the federal levels student attainment, and my 

limited understanding is that—and you kind of focus on not just 

getting them into college, but making sure they graduate—the best 

predictor of completing college is actually the income level of the 

family and if the parents have a college degree. 

And so I was taken by your testimony, it is just not getting them 

there, but how do you get them through, because if you are lower 

income, there is less success. Has anyone thought financially about 

a stepped type of an approach in aid so that if you complete your 

freshman year, there would be a more attractive loan grant or 

whatever to the second year, the third year and the 4 years, or that 

does not play in the field that you are——

Ms. WELLMAN [continuing]. For the year first step was financial 

aid programs to front load grants, to provide the greatest assistance at the freshman year, or to increase granting aid as the student progresses through the degree. So——

Mr. SESTAK. Any studies of how well that does——

Ms. WELLMAN. I am not aware——

Mr. SESTAK [continuing]. Particularly the one where you attract 

them to the next year? 

Ms. WELLMAN. I am not aware of one being systematically implemented with the goal of getting students through to graduation. In 

fact, I believe the tendency, the general pattern is for students to 

55

move away from grant increasingly toward grant-loan mixes as 

they move through their degree. 

And I think that one would want to look not just at student aid 

packages to encourage students to move through, but institutional 

financing strategies to move students through. You would want to 

do it on both sides. 

Mr. SESTAK. Thank you. 

Chairman MILLER. Mr. Hare? 

Mr. HARE. Thank you, Mr. Chairman. Thank you for holding the 

hearing. 

I have mentioned the City of Galesburg, Illinois, many times 

here. It is my home town, and it is a community that lost 1,600 

jobs when the Maytag plant went to Mexico. 

The challenge that I have is ensuring that the workers receive 

training and other assistance that they need to find new employment, you know, equal to the wages that they had, and, unfortunately for these workers, like many nontraditional students, they 

must balance, you know, school, family, part-time, full-time work, 

and the federal student aid process, like FAS, tends to steer colleges towards offering programs that make it difficult for nontraditional students to access and complete college. 

So my question for the panel would be—one question would be—

what changes do you think we can make in Title 4 of the Higher 

Education Act to help dislocated workers and other low-income 

adults have access to college? 

Ms. WELLMAN. You know that better than anybody. 

Mr. ALEXANDER. I think you are correct in asserting that the programs were really never designed to help those types of students. 

We need to carefully analyze the limitations and barriers of displaced workers, adult learners, part-time students and students 

where the families that are working full time. We do need more 

student-friendly programs of that kind, both by state programs as 

well as in federal discussions and federal directives. 

The only way we are going to start addressing these large-scale 

numerical issues that I think that we are all dealing with and 

starting to slip in OSCD and just about everything is to address 

the adult worker issues, displaced worker issues and adult learning 

opportunities and graduate learning opportunities even from community college to graduate school. 

Mr. BASSETT. One of the strengths of American higher education, 

one of the special strengths, is that it is just about the only country 

where if you do not begin college at 18, you still have a chance to 

begin college at 32, but that is only part of the workforce need that 

really you are addressing there. There are people that come back. 

They need retraining. 

We need to think about this on a statewide and regional basis, 

how we are really meeting our workforce needs with our educational system there and particularly for the older worker, and I 

think President Alexander is right. Some of these things were not 

set up with that in mind, and we need to rethink them. 

Mr. HARE. Thank you. 

Dr. Wellman, has the Delta Project looked into the costs and 

trends of higher education in rural communities? You know, I represent a large rural area, and I would imagine that these areas 

56

struggle with unique challenges that may not be seen in other 

parts, especially in terms of access or availability, resources and 

outreach. Could you speak about specific data for students who live 

in rural or geographically isolated areas? What does the data tell 

us and how can Congress address the challenges of the population 

to people in the rural communities? 

Ms. WELLMAN. I do not know. I do not know, and we can find 

out. We just put the data together to allow us to answer exactly 

questions like this. So we will look at that, and I will tell you what 

we find. 

Mr. HARE. Okay. That would be great. 

I am sorry. Go ahead. 

Mr. ALEXANDER. Having been president of a rural institution in 

Western Kentucky for 4 years, there are significant differentiated 

issues in travel. The administrative costs, when most of the rural 

schools have about half the student enrollment that larger schools 

have, the economies-of-scale issue—larger institutions in more 

urban areas will have more resources for a number of reasons, and 

many of those rural areas also have to reach out into other communities through extended campus creations to address many of the 

issues that you just began to talk about in the first question. 

Mr. HARE. Just one final thing, I would be very interested if 

maybe you could get back with me or at some point maybe we 

could talk about—when we were talking about the first question, 

some of these programs for dislocated people—those are the kind 

of workers that are coming back into the workforce—because it is 

really difficult for them, and, you know, their lives have been 

turned upside down, and we are trying to get them back up on 

their feet, and they have health care to deal with and families and 

everything that goes with losing your job, and so if there is anything I can do to help or some ideas that you have and you can 

get them to me, I would love to have them and maybe we could 

proceed from there. 

So thank you very much, Mr. Chairman. 

Chairman MILLER. Mr. Yarmuth? 

Mr. YARMUTH. Thank you, Mr. Chairman. 

And I would like to offer my welcome to Dr. Alexander and tell 

him we miss him in Kentucky. Thank you for everything you did. 

And for those who are not as familiar with you as we were in 

Kentucky, he took an institution in great need of help and elevated 

it to a considerable height. 

So thank you for your service to Kentucky. 

One of the things that I am curious about because we heard earlier in the discussion the issue of proprietary schools—and I guess 

from kind of a very uninformed position, you would say, ‘‘Well, 

there are schools that know how to make money out there,’’ because there are profit-making schools out there, and you said the 

data was not very good on proprietary schools, but what is it about 

proprietary schools that allows them to control costs—I guess 

maybe this is a softball and a free shot, if you want to take it—

allows them to at least control costs apparently better than nonprofit institutions do. 

Ms. WELLMAN. I am on the board of a proprietary school so I can 

speak to that model, and I think it is a typical one. It is a very 

57

different cost model than in a public or a private institution. The 

institution and the delivery system are very different. Faculty are 

used only for those things that only faculty will do well. They are 

used to teach. 

There is a much stronger complement of professional staff that 

put a lot more into student services and counseling. Students are 

given fairly aggressive curriculum plans and expected to stick to 

them, so the curriculum is more rigid and standardized. They use 

data. If students get in trouble, they get in touch with them fast. 

So they are very bottom-line oriented, they watch how they 

spend their money like a hawk, and their most expensive investment is in faculty are used only for the purposes that only faculty 

will do, whereas in other institutions, faculty are expected to provide a whole host of services, including curriculum development. 

In the proprietary sectors, the curriculum is developed centrally, 

modified by the faculty, but it is a very different cost model. 

Mr. YARMUTH. Well, I guess my follow-up would be for both the 

other members of the panel, is to what extent, if any, are those 

models applicable to the nonprofit sector, and is that something 

that institutions are trying to examine? 

Mr. BASSETT. We are learning about how the for-profit sector 

works, the proprietary sector works. They are often very focused in 

ways that most of your universities are not focused on, certain 

kinds of curricula. They do not have the breadth. They, obviously, 

do not have the research dimension that some universities have as 

well. A whole set of student services—some, they do spend time on. 

Others, there is not that sense of the larger student, the whole student that colleges focus on. 

I am interested in learning from any sector I can, whether it is 

the for-profit educational sector or the business sector generally or 

other countries, but I think some of it is new enough so there is 

very little longitudinal kind of data available as to how effective 

they are. So we will keep our eyes open and learn what we can and 

use what is applicable. 

Mr. ALEXANDER. If I could add just, first of all, it is interesting 

that these institutions are the most reliant on the student aid 

when you look at percentages of students getting it and acquiring 

amounts and percentages. 

Secondly, they rely on part-time faculty, quite simply. I think 

Phoenix has 10 full-time faculty members. I think that makes, 

what, a 10,000 to 1 faculty-student ratio. We are in some ways 

moving in that direction, and the College Board study showed recently that in the last 20 years, public and private higher education 

have gone from 53 percent full-time faculty to 40 percent full-time 

faculty. So, in some ways, we are already moving in that direction. 

We have not assessed the consequences of it, some good, some 

bad. In addition to that, the for-profit sector picks fields that they 

think they can succeed in and make a profit on. I am still waiting 

for the for-profit universities to produce 500 engineers a year. It is 

an expensive field of study that our nation needs very badly in very 

high-demand fields. Nursing, other medical services, other high-demand fields might not make them as much money. I know in the 

Cal State University system we produce 9,000 engineers a year for 

58

the economy of California. The high-demand fields are being neglected in some of those areas as well. 

Mr. YARMUTH. Probably a problem with philosophy, too. 

One quick question—I hope it is a quick question—one of the statistics I saw in the testimony was that the percentage of students 

who are on Pell grants actually graduating is relatively low, and 

I have some legislation actually to try to help create a grant program to provide support services for Pell grant recipients. How 

much does that noncompletion rate, that turnover of students, add 

to the overall cost of the system? Is it a factor in cost? 

Mr. ALEXANDER. It is a very big factor in terms of remedial education that we provide for students, in terms of advising structures 

that we provide for students, and we are so heavy on Pell grant 

eligible students on our campus, with, as I mentioned, nearly 40 

percent, it costs us a lot of money to particularly get them from 

freshman to junior year, and it takes a lot of attention because 

they are coming from schools where they have not had the backgrounds in many ways, and we have to get them college ready. 

We are working with our public schools even prior to getting to 

college, which costs resources for us, to get them college ready even 

prior to coming to the institution. So this is a very costly item. We 

know it is costly in K through 12 schools. We have never really recognized it, though, in terms of what does it cost the institutions to 

get these students from freshman year to senior year or transfer 

junior year to senior year. 

Mr. BASSETT. I agree. It costs an awful lot. There are two reasons 

why students do not continue and complete college. One is financial. The other is the rigor of their high school education. They 

come in unprepared. They do not stay. Either it takes remedial 

help or they do not stick with it, and that is something we cannot 

ignore, is the connection between the K through 12 education 

issues and higher ed. 

Chairman MILLER. Mr. Payne? 

Mr. PAYNE. Thank you very much. Thank you for having this 

very important hearing, and I hope we can really come up with 

some ways that we can give more support to the whole question of 

costs. 

You know, there are a number—I missed most of the testimony, 

but did hear the HOPE scholarship mentioned about and I hear a 

lot of acclaim given to the HOPE scholarship because it is sort of 

merit, and a youngster doing all right in Georgia really has access 

to these schools. 

However, if you evaluate the HOPE scholarship, which is not 

based on income—the money comes from lottery and other kinds of 

gaming that, unfortunately, the lower end of the community participates in, and, as we all know, people that are doing worse sort 

of are looking to try to make that big win, and so a disproportionate amount of people who cannot afford the lottery play it. 

However, a person who might make $100,000 a year, $200,000 

a year as a couple or whatever, their child can take a test and get 

the HOPE scholarship, a person who might have gone to some 

other school and paid the tuition, but why not stay in Georgia—

they have some good colleges—and let the public pay, let these peoVerDate 0ct 09 2002 14:49 May 02, 2008 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\FC\110-70\38493.TXT HBUD1 PsN: DICK
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ple who play the lottery pay for my education? You know, I have 

not looked at it and, if I am wrong, tell me. 

And how do you see the kid who goes to the schools where all 

the children are left behind, so to speak? How do they compete, 

even though I understand the score is based on that school? However, once they get into the college, the diluted education from the 

poor schools are going to have the person wash out probably because they are going to be unable to maintain the scholastic level 

that they need. 

Maybe the one that mentioned the HOPE scholarship might 

want to deal with that. I am just curious. 

Mr. ALEXANDER. I think the merit-based scholarships have a couple distinctive elements. In states that readily have a drain brain 

impact, like Kentucky, prior to the merit-based scholarship. It does 

have greater value to a state that has traditionally lost many of its 

students and many of their investments from kindergarten through 

high school. For states that have not been losing them, it puzzles 

me why they were incorporated in the first place. 

With regard to how they are financed, I think that in states that 

truly need them to keep the brain drain from leaving, then perhaps 

they should be funded through a much more progressive system. 

The use of lottery money to provide resources to merit-based scholarship programs perhaps is the most regressive funding structure 

we have ever adopted in American higher education. 

Mr. PAYNE. Thank you very much. I agree with you. Of course, 

that is why I asked the question. 

My last question: It was mentioned by you, Ms. Wellman, in your 

written testimony that—you point to productive problems at colleges and universities that create higher costs. Number one, could 

you just quickly define the productivity problems, and how do you 

think that this problem arises and what does it mean to the institution? 

Ms. WELLMAN. The short definition of a productivity problem is 

that we do not know how to reduce spending without compromising 

quality or access, and in order to meet the goal of increasing attainment without compromising quality or reducing access, we 

have to think about the production process very differently and getting students through to the degree, and there are ways to do that 

if we make the focus on degree attainment and resource use to get 

the student to the degree. It is not about cutting costs. It is about 

using the money to accomplish degree attainment. 

Mr. PAYNE. And just finally on that HOPE scholarship, the original purpose of HOPE-type scholarships, the one that they have in 

Georgia, is primarily to try to keep Georgia students in Georgia or 

keep Kentucky students in Kentucky that they do not go to other 

states and remain there or to stay there at the end of the day, 

more or less. That is what it was supposed to be. 

Mr. ALEXANDER. Was Georgia a net loser of students prior to the 

program? 

Mr. PAYNE. Right. 

Mr. ALEXANDER. Okay. 

Mr. PAYNE. Yes. Well, I really do not know, but I suppose they 

were and that may be one of the reasons that they did it. 

All right. Thank you, Mr. Chairman. 

60

Chairman MILLER. Mr. Scott? 

Mr. SCOTT. Thank you. Thank you, Mr. Chairman. 

A question was asked about the proprietary schools, but it is my 

view they have a different message, a different mission. They are 

focused on getting a specific job. You come in, you get trained, you 

get a job. And it is just focused on that. They change the situation 

when they feel like it. They do not have tenured professors, academic freedom, research, college life, all the extracurricular activities and everything. And essentially it is just more expensive to 

educate the entire person holistically than train somebody for a job, 

and, actually, you are just getting what you are paying for, and you 

make your choice. 

I guess the question along those lines—I guess for Mr. Bassett 

and Mr. Alexander—we have shortages in certain career fields. Are 

you not fulfilling those positions because they are more expensive 

to do? Do you find that you are, because of financial considerations, 

having to have more slots in less expensive fields rather than the 

more demanding fields? 

Mr. BASSETT. I do not want to speak for President Alexander, but 

I think he has tried to say that he is addressing those needs, actually, in areas like engineering and nursing. 

I think most universities are trying to address those needs in 

terms of their own capacity to do so. We do have a problem in education in America where fewer and fewer American students seem 

to be going into science and engineering to begin with, and, therefore, companies are hiring more and more of their engineers from 

India or China or somewhere else, and that is an issue we have to 

take back to K through 12 as well as higher ed. 

But I think in the nonprofit sector, both publics and privates do 

try to address the workforce needs in those areas up to their capacity. If they do not have the funding in areas to add engineering 

programs that they need to or nursing programs or teacher programs—we are certainly not attracting enough people into teaching, at least high-quality people into teaching—I do not think there 

are many universities that would not try to help solve that problem 

if they have the capacity to do so, but I defer to my colleague here. 

Mr. ALEXANDER. Well, I think you have begun to address these, 

I think approximately so, creating incentives, the Teach grants, the 

SMART grants. The SMART grants are, I think, funded at about 

twice of what is being spent on them because we are not getting 

students in the SMART grants, but the Teach grants, I think, will 

help. We are already using Teach grants. 

I guess the question is: We know it is far more expensive to educate an engineer than it is a journalist or a historian. We in California are not differentiated by state appropriations either. But I 

can say from our perspective that we are working as hard as we 

can to meet these high-demand fields and to provide the workforce 

for California through these areas. 

The one challenge that we have that was brought up a little earlier, Congressman Petri brought up, was accreditation. Some accrediting bodies like high demand because it means high salaries. 

So engineering insists that our engineering students need 5 years 

of college education to get through the engineering curriculum. You 

need 5 years to become a speech pathologist, to be certified as a 

61

speech pathologist. Thus, our public schools suffer by not having 

enough speech pathologists, and our health care agencies suffer by 

not getting enough speech pathologists into the arena. 

Sometimes we face some internal issues within ourselves within 

academe to keep that demand at a very high level, while, at the 

same time, we are trying as rapidly as possible to get more students into these areas so that we can provide the needs for society. 

Mr. SCOTT. Thank you. 

I have heard substantial a number of low-income students do not 

go to college because they cannot afford it. What would the Pell 

grant have to be to eliminate the financial barriers for low-income 

students getting to college? 

Well, let me ask another question. [Laughter.] 

Mr. ALEXANDER. We range from $3,000 a year to $50,000 a year 

now. The range is quite expansive. 

Mr. SCOTT. Let me get another question in. I think Mr. Bassett 

indicated some colleges have endowments. Others do not. Is there 

any way through technical assistance or otherwise that we could 

help colleges build their endowment? 

Mr. BASSETT. Help colleges build their endowments? 

Mr. SCOTT. Right. 

Mr. BASSETT. They are doing a pretty good job of building them 

right now, I would say. You know, the question came up as to 

whether colleges should be forced to spend more of their endowment or something like that. Endowment and annual giving, like 

tuition, are all part of a revenue stream that you are trying to put 

into manage your college there. 

I think the biggest change that has happened in fundraising and 

seeking endowments is how the public sector has found the need 

to create foundations to try to build their own endowments and 

build their annual funding stream, both to improve quality and to 

make up for the lack of state funding there. 

I think if the tax policies are not in place to encourage people to 

give to endowments, we probably are disincentivizing people from 

increasing college endowments. But at the moment, I think most 

colleges are working very aggressively to increase endowments. 

Mr. SCOTT. Well, thank you, Mr. Chairman. I think he just came 

out in opposition to the repeal of the estate tax, but I was not quite 

sure. [Laughter.] 

Chairman MILLER. Mr. Hinojosa? 

Mr. HINOJOSA. Thank you, Mr. Chairman. 

My first question is directed at Dr. Bassett. Should private colleges and universities participating in the federal student aid programs be obligated by Congress to enroll a certain percentage of 

Pell grant recipients? 

Mr. BASSETT. Should those private colleges be required to—I did 

not get the last part. 

Mr. HINOJOSA. Should they be required to enroll a certain percentage of Pell grant recipients? 

Mr. BASSETT. Well, to some extent, of course, the number of Pell 

grant recipients that we enroll depends on the number of Pell 

grant potential recipients that apply, and assuming that the same 

qualitative standards are used for them as would be used for all 

of the other students, we would be enrolling and funding with our 

62

own private scholarship dollars up to the level of need all of those 

students. The only thing we could not do is to require people that 

do not want to come to our college to apply. 

Mr. HINOJOSA. No, you do not have to require, but you could recruit. You can recruit down in South Texas where the population 

is about 84 percent Hispanic and where we have schools that are 

listed in the top 100 best high schools in the country. But if these 

private schools do not go out, which they never do—the only ones 

that really go out there to recruit are more of our public universities. 

Mr. BASSETT. Well, I would love to have more of those students 

come to Clark University. I cannot speak for all of the other privates. As I think I said earlier, we probably have a smaller percentage of families making over $100,000 than any of the other privates with which we compete for students. So we are happy recruiting those students. 

It gives us also greater diversity, which is one of our primary 

goals, is to increase the economic diversity, the ethnic diversity, the 

international diversity on campus. So that would be very much in 

line with our philosophy. 

Mr. HINOJOSA. Well, we have a large pool, and many, especially 

the girls, wind up staying somewhere close to home because many 

of their parents prefer to see them stay within the region. But if 

somebody comes out and recruits and gives them all sorts of information, maybe that could be turned around. 

Mr. BASSETT. We will be there. 

Mr. HINOJOSA. My next question is for Ms. Wellman. Some public 

and private institutions have pursued a strategy of charging higher 

tuition to be able to fund higher institutional aid. In your view, 

what is the impact of this type of policy on the enrollment of lowincome, first-generation college students? 

I cannot hear you. 

Ms. WELLMAN. Good question. I think it is a different experience 

in different institutions. In general, the upper-income students respond better to that than low-income students. But it is a mixed 

bag. 

Mr. HINOJOSA. Yes, Mr. Alexander? 

Mr. ALEXANDER. I thought I would never see the day when a 

public university would actually charge all students the full out-ofstate rate and then turn around and give what they call in-state 

institutional aid scholarship awards to everybody who lives in the 

state to offset the difference between the two. But that happened 

about 3 years ago at Miami University in Ohio. 

I think this is a dangerous trend, and I think it is devastating 

for low-income students, and it chases them into jobs earlier than 

they should be, and it just limits their opportunities in ways that 

we still have not done enough studies to fully understand. 

Mr. HINOJOSA. Thank you for that advice. 

Mr. Alexander, since I have your attention, Title 3 and Title 5 

institutions educate a large percentage of low-income minority students. I can tell you that easily 60 percent of all Hispanic students 

are in HSIs, and that is a fact. These institutions tend to be low 

cost and low resourced. Could you please elaborate on how your 

63

proposal for a cost of education allowance could benefit students at 

these minority institutions of higher learning? 

Mr. ALEXANDER. I believe it would benefit those institutions, and 

it would also create incentives for other institutions to start enrolling those students as well, and that is, I think, two-faceted. 

The first is that those institutions need additional resources, and 

if this program had been adopted initially in 1972, we probably 

would not see as many institutions that have moved away from 

low-income student populations as we have today. That incentive 

is very important to help those institutions not only enroll, but to 

retain and succeed with those students. 

We are an HSI at California State University, Long Beach, and 

16 of our 23 universities are HSI institutions. We know how important those resources are and the programs that we need to put in 

place to help those students succeed on our campus. They cost 

money. We need help in providing those types of avenues and resources for those students. 

And just like in the K through 12 sector, we know at the federal 

level that these students require more additional and augmented 

assistance, and it would be a very good day for us to see when the 

federal government also recognizes additional assistance to those 

institutions that are committed to——

Mr. HINOJOSA. We recognize it, and we are trying and, hopefully, 

when we do the reauthorization of higher ed, there will be a component where Title 5 will have a Part B for encouraging Hispanic students to get into the graduate programs, master’s and Ph.D. 

Do you see how you could utilize that state money that we would 

put out so that we could get more students? In many cases, some 

have 5 years experience and they just need a little bit of help to 

get into the master’s or the Ph.D. programs. 

Mr. ALEXANDER. It certainly would help and, I think, as we work 

to educate more and as we work to increase—we were sixth in the 

nation in number of Hispanic students graduating from our institution. We do have hundreds and hundreds of more students seeking 

graduate opportunities that are Hispanic, that are African-American, Asian-American, Cambodian and others. These resources are 

very important for us to help provide the type of programs that encourage them to pursue higher levels of educational attainment. 

Mr. HINOJOSA. It is good to hear that. 

Thank you, Mr. Chairman. 

Chairman MILLER. Thank you. 

Mr. Wu? 

Mr. WU. Thank you, Mr. Chairman. 

On those occasions when I ask questions, they are genuine questions and they are very short to permit long answers, and I just 

want to say in advance that this time I intend to talk because I 

want to talk about three very different topics and then invite your 

comment on any of the three. 

First of all, the issue of outreach about financial aid, the most 

well-attended events that I have done in my congressional district 

are about college financial aid. Parents and students come. There 

is an insatiable demand for information about how to get college 

financial aid, and, you know, I could do college financial aid fora 

64

all the time, I mean, just do nothing else, but there are other 

things that a congressman needs to do at home also. 

So I would just encourage you all to do aggressive outreach about 

what college financial aid is available because so many people just 

do not know what is available, and programs may exist. They do 

not do any good if people do not know about them. 

Number two, a potential source of nongovernmental revenue for 

college financial aid, not within the jurisdiction of this committee—

we almost got this passed in 1999—is an H-1B Visa proposal that 

couples high-tech workers with college financial and does so in the 

following way: If you are IBM and you want a H-1B worker, you 

come to an accredited college or university, you plunk down an 

amount of money equal to the then maximum Pell grant, you get 

a ticket from the college. The college is obligated to use 100 percent 

of that money for financial aid. There is no administrative fee to 

be drawn out from that. You take the ticket to ICE, and you get 

your worker in 15 days. Companies typically spend $100,000, $150,000, $200,000 to re- cruit a worker. To pay an additional $5,000 per year to get their 

H-1B worker is not a big deal for most of these high-tech companies, and the expedited processing has not worked in many other 

arenas at Immigration. I believe it would work in this instance because it turns out that roughly 80 percent of H-1B workers, I 

think, are already in the United States at American institutions, 

and all the background checks can be done because the person is 

available to be checked up on. 

This was a way of leveraging federal dollars and increasing college financial aid, making H-1B visas more palatable by coupling 

it to educating American students. 

And third and last point, as we approach HEA reauthorization, 

just as our college financial aid outreach programs are our most 

well-attended programs in my congressional district, the most mail 

that our office has ever gotten has been our work on the textbook 

pricing issue. Mr. McKeon and I asked for a GAO study on textbooks, and it turns out that materials and books average out to 

close to $1,000 a year per student, and if you are attending Harvard or Georgetown, $1,000 may not be a whole lot more money, 

but if you are at Portland Community College or at a CSU, $1,000 

is a significant question. 

This is a matter of access and fairness because the reason why 

the issue came to our attention is because students got on the 

Internet and they found that the same book that is available at 

their bookstore for $150, you could get at Amazon U.K. for $50, and 

you can order it, ship it, and save a lot of money. 

Now a lot of different—and as I said, we have gotten more mail 

and email traffic on this issue, and we have gotten it not from my 

congressional district——

Chairman MILLER. You are going to give them about a minute 

here to respond. 

Mr. WU [continuing]. But we have gotten it from all over the 

country. Professors have a role to play in this. If they put out their 

syllabus early, then they can order. Students have a role to play 

in this. Bookstores have a role to play in this. And the publishing 

industry has a role to play in this. 

65

The red light has gone on, but if the chairman will indulge the 

witnesses in commenting on any of the——

[Laughter.] 

Mr. WU. I will stop at this point. 

Mr. BASSETT. I was going to start the response by responding to 

your comment on financial aid outreach because I think the student that comes from a first-generation college family and less 

wealthy is four steps behind at the beginning than the student 

coming from a college-educated family and probably going to a high 

school with a number of guidance counselors. The first student may 

have one guidance counselor for every 600 students. 

I would love to see either a nonprofit or some other agency set 

up specifically to help, going beyond what is in U-CAN, and I know 

we have our Web site, which is very important here, in helping to 

provide some of that personalized guidance counseling on what is 

the right fit for this student with the right college. So, on that 

issue, I am with you 100 percent. 

Mr. ALEXANDER. I guess I get the textbook issue then. Okay. 

It is a complicated problem. Right now in the CSU, we are looking at ways of rental textbooks. We are looking at textbooks, and 

we need actually the help of the Congress to put pressure on publishers to put their versions online in affordable ways for students. 

Not only online, but I think there are only three or four publishers 

that are controlling basically the whole market of textbook production. We are quite frequently accused of getting lots of money from 

these textbooks in our own bookstore, and our margins are virtually nonexistent. 

It is a very controlled market. Our faculty do play an important 

role in getting our faculty to start using alternative sources, getting 

them to use Internet sources and others. It is a complicated problem that we are all moving into, but with your attention on this 

issue, we can certainly put some pressure on the publishers. 

They do not necessarily want to put all this online because they 

lose a lot of money, too. So the more that you could work with us 

on this agenda would be very important because it is over one-third 

of our entire cost of education. 

Chairman MILLER. Thank you. 

Thank you, Mr. Wu, for your questions. 

And we are giving a lot of attention to the textbook issue in the 

consideration of the HEA. 

Ms. Wellman, in your testimony on page 6, you refer to the 

transparency issue and reference Secretary Spellings’ commission 

and you mention at the bottom there in that paragraph, ‘‘Spending 

information is almost completely absent from state report cards 

and on institutional Web sites offering consumer information. The 

focus,’’ as you might expect, ‘‘remains on tuition and financial aid, 

not on how money is spent.’’

In the next paragraph, you say that ‘‘There is no evidence that 

the resources are going to pay for student success or increasing degree attainment, and low-income students are most at risk.’’

What are you telling us there? 

Ms. WELLMAN. Two things. One we are not paying attention to 

spending, institutions are not looking hard at where the money is 

going, and that we can do a better job with data to get that inforVerDate 0ct 09 2002 14:49 May 02, 2008 Jkt 000000 PO 00000 Frm 00069 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\FC\110-70\38493.TXT HBUD1 PsN: DICK
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mation as readily accessible as we are now getting information 

about tuition and financial aid and that when we do that, it will 

begin a conversation within the institutions about where the money 

is going and whether the money is going where it needs to to enhance student success. 

Chairman MILLER. How do you do that? 

Ms. WELLMAN. Well, the federal government can help with 

IPEDS. You can do it by requesting states, as true incentive resources or the condition of receiving funds, to build accountability 

systems that ventilate costs, attract expenditures and that identify 

where the money is going. 

So I think it is about transparency, and it is about documentation. 

Chairman MILLER. Not to put you on the spot, but you say, 

‘‘There is no evidence that the resources are going to pay for student success or increasing degree attainment.’’ I sort of thought 

that was the theory of why they would show up at the campus, 

but——

Ms. WELLMAN. The places——

Chairman MILLER. What does the evidence tell us? 

Ms. WELLMAN. The evidence tells us if you look at where spending is increasing in higher education and then ask what is that 

spending going is for—Do we see more degrees produced as a result? Are we seeing more students get through to graduate school? 

What are we buying for it?—there is zero evidence of increased degree attainment. We are not seeing evidence of poor student access 

increasing. The evidence about learning is not good, as you know, 

but—what we can tell about learning results. 

So it appears to be increasing the intrinsic quality of the educational experience. These are nice places to be. Is it educationally 

necessary? Is it bottom-line quality? Is there a better way to do it? 

We think there is. 

Chairman MILLER. Well, there was a suggestion—and I do not 

suggest that this is a prime driver—in talking to some people yesterday who are deeply involved in these issues—said that, you 

know, students expect a different environment. They expect health 

facilities, common facilities, quality-of-life facilities, if you will, on 

campus and campuses are judged by——

Ms. WELLMAN. I think in the high-end institutions——

Chairman MILLER [continuing]. What they——

Ms. WELLMAN [continuing]. The amenities race is part of what is 

going on, and yet it is a leadership responsibility if there is a will 

to do it, to make some choices to dial that down and to hold the 

line as much as possible on increasing spending and to put every 

dollar possible into educational quality. Otherwise, the market now 

is going to continue to push us in this direction. So we are spending more, and we are not necessarily getting better quality or results because of it. 

Chairman MILLER. Gee, that is not very good news. 

Ms. WELLMAN. Well, like anything else in higher education, it is 

not always true. So we can find good examples on the other side. 

Chairman MILLER. Well, thank you. 

Ms. WELLMAN. It is a pattern that is disturbing. 

Chairman MILLER. I feel much better now. [Laughter.] 

67

Well, it is a very serious concern, I think, because it sort of goes 

to the question, ‘‘What is it you are buying with this expenditure 

of taxpayer dollars?’’ People work very hard to pay those taxes, you 

know, and so I think would think what we are trying to facilitate 

here is the attainment of that degree, hopefully accompanied by the 

most knowledge available in that period of time, and you are suggesting that the trend is, in fact, going in the other direction. 

Ms. WELLMAN. The trend——

Chairman MILLER. That is a very troublesome trend, I would 

think, for the shareholders who are financing those institutions, 

and it also looks like a trend where, I mean, conceivably, I guess 

you could end up losing market share because if you make it more 

difficult to get degree attainment or it is not happening, I guess 

people will make other choices. I do not know. 

But, right now, you would not have the information available to 

know whether you would want to pick another system that may be 

more efficient, more resources dedicated to your attaining the degree. 

Ms. WELLMAN. Yes. It would require a cultural change to create——

Chairman MILLER. Most people think, you know, that that is the 

mission of the system, don’t they? They would think the mission of 

the system is degree attainment and the resources necessary to do 

so. 

Ms. WELLMAN. Well, yes, sir. 

Chairman MILLER. I do not know. I mean, maybe I am wrong. 

Maybe we——

Mr. ALEXANDER. I think if you——

Chairman MILLER. Buyer beware. I do not know. 

Mr. ALEXANDER. I mentioned earlier I think if you just aggregate 

this data and the expenditures, you will find out who is doing a 

good job and who is not, and you will find out real quickly who is 

serving more students. You will find out which institutions are actually chasing perhaps what we call prestige maximization. I think 

the data is there to understand how these expenditure trends have 

grown and have not grown. It is not consistent throughout the 

United States. 

Ms. WELLMAN. Yes. 

Mr. ALEXANDER. There are many systems that are doing a very 

good job with more students than they have ever had and they 

have graduated more students than they have ever done. I know 

we graduated more students than any other system in the history 

of American higher education last year with 90,000 graduates. Others are doing well, but I think these data are very important in understanding where you can point your finger and understanding 

who actually is serving these public needs in greater ways. 

Mr. BASSETT. If I may take a little different slant on it, our retention rate and graduation rate have both improved recently. I 

have made at least four different kinds of investment to try to 

make that happen: an investment at Center for Excellence in 

Teaching and Learning which has worked with faculty on teaching; 

an investment in an advisor to work specifically with first-generation and minority students to improve their retention rates; an investment in making more of our kind of part-time teachers fullVerDate 0ct 09 2002 14:49 May 02, 2008 Jkt 000000 PO 00000 Frm 00071 Fmt 6633 Sfmt 6602 G:\DOCS\110TH\FC\110-70\38493.TXT HBUD1 PsN: DICK
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time so they are always there for students. I also know that the 

incoming students have been a little stronger during that period. 

What I do not know is which of those four things made a significant impact on our improved retention and graduate rate. It is 

hard to disaggregate them to learn exactly what made a difference. 

So it is not easy to do the kind of research always that we need 

to do on this, too. 

Chairman MILLER. Do you want to say anything? 

Well, thank you——

Yes, David? [Laughter.] 

Mr. WU. Very briefly in the preparatory materials for this hearing, there is reference to sticker price and net price, and this is impressionistic, but I have seen this happen a lot. When the sticker 

price is really high, you know, even though more than 50 percent 

of students might have an institution where they would be getting 

financial aid, I think a lot of people self-disqualify, and I do not 

know how you get around that, you know, because if you wind up 

advertising net prices, you know, the parents who are paying fullprice might not be very happy, but somehow getting that information out is a very, very important thing. 

Ms. WELLMAN. I agree. 

Mr. ALEXANDER. I think that actually we have come a long way 

from when this first was part of the discussion 4 years ago. The 

CSU has in this document our net price, our sticker price and our 

net price, and we have it for every CSU institution, and we are 

going to make it available to every family member in the State of 

California, and we encourage other institutions, and we encourage 

you to ask these type of questions of institutions as well. 

Mr. SCOTT. Will the gentleman yield? 

Mr. WU. Yes. 

Mr. SCOTT. You have sticker price, net price. You also have cost, 

which is another figure. Do you publish that, too? 

Mr. ALEXANDER. We can publish costs. We could put our $13,200 

on here to demonstrate how much it costs. 

Ms. WELLMAN. How much subsidy you get. 

Mr. ALEXANDER. Right. 

Mr. SCOTT. Because you have the endowment and the other income toward the cost to educate. 

Mr. ALEXANDER. Right. Well, Ms. Wellman raised that question 

earlier, and we said certainly, if that is what people want to see 

and people want us to do, we will certainly put that on there as 

well. 

Mr. WU. I yield back the balance of my time. 

Chairman MILLER. Thank you. 

Thank you very much for your testimony. I think you can see 

from the interest and the questions of the members that this is an 

issue that we clearly want to try and begin dealing with in the upcoming legislation. 

So thank you, and I hope that we may be able to continue to call 

upon your expertise as we wind our way through these next couple 

of weeks. Thank you. 

The committee will stand adjourned. 

[The statement of Mr. Altmire follows:]

69

Prepared Statement of Hon. Jason Altmire, a Representative in Congress 

From the State of Pennsylvania 

Thank you Mr. Chairman for holding this important hearing on the rising cost 

of a college education. 

On October 22, the College Board released its annual ‘‘Trends in College Pricing’’ 

report. The report confirmed what many of us have been saying, the cost of attending college is rising faster than inflation. 

In what is one of the most significant accomplishments of the 110th Congress, we 

took a dramatic step towards making college more affordable by enacting the College Cost Reduction and Access Act (H.R. 2669). This legislation will provide $20 

billion in student financial aid, making college more affordable for millions of students. As the Chairman and members of the Committee know, it raises the maximum Pell Grant award by $1,090, cuts interest rates on subsidized student loans 

in half over the next four years, and provides loan forgiveness to students who go 

into public service after graduation. 

While we addressed the critical issue of affordability, we have not addressed why 

tuition prices continue to rise. I look forward to hearing more about the factors driving the constant increase in college tuition and hope to learn what steps Congress 

can take to slow or turnaround this climb in cost. 

Thank you again, Mr. Chairman, for your continued attention to this critical 

issue. I yield back the balance of my time. 

[The statement of Mr. McKeon follows:]

Prepared Statement of Hon. Howard P. ‘‘Buck’’ McKeon, Senior Republican 

Member, Committee on Education and Labor 

Thank you Chairman Miller. 

I’m pleased to be here this morning to discuss rising college costs, an issue I have 

focused on since coming to Congress almost 15 years ago. 

For too many years, it seemed I was alone in my concern about ever-rising tuitions and their impact on students and families. That’s why I’m so pleased that 

Chairman Miller has convened this hearing and joined me in asking the tough questions about how we can finally get a handle on the skyrocketing cost of a college 

education. 

Rising college costs are a difficult issue. There are no easy answers. The higher 

education community is fiercely protective of its right to charge whatever it sees fit, 

and taxpayers are expected to foot the bill that families cannot by blindly increasing 

financial aid, year after year. 

I learned that lesson the hard way when I first proposed a modest effort to address college costs at the federal level by shining a spotlight on excessive tuition 

increases. The backlash was, speaking frankly, both surprising and hugely disappointing. 

Certainly some colleges and universities have taken steps to hold down costs. 

Community colleges in particular are a low-cost option for an increasing number of 

students and families. We have heard from institutions striving for greater administrative efficiencies, and even schools that allow students to rent textbooks, a small 

step that can save students hundreds of dollars each year. But for every story we 

hear about a commitment to affordability, it seems we hear dozens more about exploding tuitions. 

Today’s hearing is a positive sign. Finally, it seems we are reaching consensus 

that rising college costs are a real problem in America. I’m hopeful that we can 

begin turning our attention now to solutions. 

Over the last four years I have refined my plan to address college costs based on 

feedback I have received from the higher education community. I have included provisions that recognize low-cost institutions and modified how cost increases are calculated. Ultimately, however, I do not believe it is too much to ask that students 

and parents be given clear, understandable information about how much tuitions 

are rising. And for those schools where tuition is rising rapidly, at more than twice 

the rate of inflation, it is reasonable for us to ask why, and what can be done about 

it. 

It’s no secret that I was disappointed this year when the majority insisted on 

passing financial aid reforms through a process designed for deficit reduction. I had 

a number of concerns about the policies in that bill, but perhaps even more than 

that, I believe it was a tremendous missed opportunity. 

That bill added billions in additional support for Pell Grants—something I support—but it did so without any accountability for colleges and universities to do 

70

their part in the affordability equation. I fear that by inflating federal subsidies 

without addressing costs, we may inadvertently have made the problem much 

worse. 

Will colleges simply raise tuition further, draining the value of our Pell Grant increases? Will states spend less on higher education, assuming the federal government has made up the difference? Will the Appropriations Committee undercut the 

discretionary funding base of the Pell Grant program, thereby erasing the increases 

we provided? I’m afraid the budget bill may have been a losing wager. 

While we missed the opportunity to provide meaningful solutions to the college 

cost crisis earlier this year, I am hopeful that we will not make the same mistake 

now. As we prepare to consider comprehensive Higher Education Act legislation, I 

believe we must undertake a genuine effort to address college costs. 

I’m pleased to have this distinguished panel of witnesses here before us. I want 

to thank each of you for your willingness to engage in a difficult discussion. Your 

involvement, and the involvement of all stakeholders, is imperative if we are truly 

committed to keeping college affordable. 

I want to thank Chairman Miller for holding this hearing and for working with 

me and my staff on this important issue. I yield back. 

[Whereupon, at 1:40 p.m., the committee was adjourned.]

Æ