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+ - THE STATE OF HIGHER EDUCATION: HOW STUDENTS ACCESS AND FINANCE A COLLEGE EDUCATION
+
+[House Hearing, 110 Congress]
+[From the U.S. Government Publishing Office]
+
+
+
+
+
+
+ THE STATE OF HIGHER EDUCATION:
+ HOW STUDENTS ACCESS AND
+ FINANCE A COLLEGE EDUCATION
+
+=======================================================================
+
+ HEARING
+
+ before the
+
+ SUBCOMMITTEE ON HIGHER EDUCATION,
+ LIFELONG LEARNING, AND COMPETITIVENESS
+
+ COMMITTEE ON
+ EDUCATION AND LABOR
+
+ U.S. House of Representatives
+
+ ONE HUNDRED TENTH CONGRESS
+
+ FIRST SESSION
+
+ __________
+
+ HEARING HELD IN WASHINGTON, DC, MARCH 8, 2007
+
+ __________
+
+ Serial No. 110-8
+
+ __________
+
+ Printed for the use of the Committee on Education and Labor
+
+
+ Available on the Internet:
+ http://www.gpoaccess.gov/congress/house/education/index.html
+
+ __________
+
+ U.S. GOVERNMENT PRINTING OFFICE
+33-656 PDF WASHINGTON : 2007
+---------------------------------------------------------------------
+ For sale by the Superintendent of Documents, U.S. Government
+Printing Office Internet: bookstore.gpo.gov Phone: toll free (866)
+512-1800; DC area (202) 512-1800 Fax: (202)512-2250 Mail: Stop SSOP,
+Washington, DC 20402-0001
+
+
+
+
+
+ COMMITTEE ON EDUCATION AND LABOR
+
+ GEORGE MILLER, California, Chairman
+
+Dale E. Kildee, Michigan, Vice Howard P. ``Buck'' McKeon,
+ Chairman California,
+Donald M. Payne, New Jersey Ranking Minority Member
+Robert E. Andrews, New Jersey Thomas E. Petri, Wisconsin
+Robert C. ``Bobby'' Scott, Virginia Peter Hoekstra, Michigan
+Lynn C. Woolsey, California Michael N. Castle, Delaware
+Ruben Hinojosa, Texas Mark E. Souder, Indiana
+Carolyn McCarthy, New York Vernon J. Ehlers, Michigan
+John F. Tierney, Massachusetts Judy Biggert, Illinois
+Dennis J. Kucinich, Ohio Todd Russell Platts, Pennsylvania
+David Wu, Oregon Ric Keller, Florida
+Rush D. Holt, New Jersey Joe Wilson, South Carolina
+Susan A. Davis, California John Kline, Minnesota
+Danny K. Davis, Illinois Bob Inglis, South Carolina
+Raul M. Grijalva, Arizona Cathy McMorris Rodgers, Washington
+Timothy H. Bishop, New York Kenny Marchant, Texas
+Linda T. Sanchez, California Tom Price, Georgia
+John P. Sarbanes, Maryland Luis G. Fortuno, Puerto Rico
+Joe Sestak, Pennsylvania Charles W. Boustany, Jr.,
+David Loebsack, Iowa Louisiana
+Mazie Hirono, Hawaii Virginia Foxx, North Carolina
+Jason Altmire, Pennsylvania John R. ``Randy'' Kuhl, Jr., New
+John A. Yarmuth, Kentucky York
+Phil Hare, Illinois Rob Bishop, Utah
+Yvette D. Clarke, New York David Davis, Tennessee
+Joe Courtney, Connecticut Timothy Walberg, Michigan
+Carol Shea-Porter, New Hampshire
+
+ Mark Zuckerman, Staff Director
+ Vic Klatt, Minority Staff Director
+ ------
+
+ SUBCOMMITTEE ON HIGHER EDUCATION,
+ LIFELONG LEARNING, AND COMPETITIVENESS
+
+
+ RUBEN HINOJOSA, Texas, Chairman
+
+George Miller, California Ric Keller, Florida,
+John F. Tierney, Massachusetts Ranking Minority Member
+David Wu, Oregon Thomas E. Petri, Wisconsin
+Timothy H. Bishop, New York Cathy McMorris Rodgers, Washington
+Jason Altmire, Pennsylvania Virginia Foxx, North Carolina
+John A. Yarmuth, Kentucky John R. ``Randy'' Kuhl, Jr., New
+Joe Courtney, Connecticut York
+Robert E. Andrews, New Jersey Timothy Walberg, Michigan
+Robert C. ``Bobby'' Scott, Virginia Michael N. Castle, Delaware
+Susan A. Davis, California Mark E. Souder, Indiana
+Danny K. Davis, Illinois Vernon J. Ehlers, Michigan
+Mazie Hirono, Hawaii Judy Biggert, Illinois
+
+
+
+
+
+
+
+
+
+
+
+
+ C O N T E N T S
+
+ ----------
+ Page
+
+Hearing held on March 8, 2007.................................... 1
+Statement of Members:
+ Altmire, Hon. Jason, a Representative in Congress from the
+ State of Pennsylvania, prepared statement of............... 1
+ Hinojosa, Hon. Ruben, Chairman, Subcommittee on Higher
+ Education, Lifelong Learning, and Competitiveness.......... 2
+ Prepared statement of.................................... 12
+ Making Opportunity Available report: ``Hitting Home:
+ Quality, Cost, and Access Challenges Confronting Higher
+ Education Policy''..................................... 3
+ Keller, Hon. Ric, Ranking Minority Member, Subcommittee on
+ Higher Education, Lifelong Learning, and Competitiveness... 12
+ Prepared statement of.................................... 14
+
+Statement of Witnesses:
+ Breneman, David W., dean and professor, Curry School of
+ Education.................................................. 16
+ Prepared statement of.................................... 18
+ Internet link to the National Center for Public Policy
+ and Higher Education report: ``Measuring Up 2006''..... 19
+ Merisotis, James, president, Institute for Higher Education
+ Policy..................................................... 25
+ Prepared statement of.................................... 27
+ Soifer, Don, executive vice president, Lexington Institute... 33
+ Prepared statement of.................................... 34
+ Wiener, Ross, vice president for program and policy,
+ Education Trust............................................ 19
+ Prepared statement of.................................... 21
+ Internet link to Education Trust report: ``Promise
+ Abandoned: How Policy Choices and Institutional
+ Practices Restrict College Opportunities''............. 47
+
+
+
+
+
+
+
+ THE STATE OF HIGHER EDUCATION:
+ HOW STUDENTS ACCESS AND
+ FINANCE A COLLEGE EDUCATION
+
+ ----------
+
+
+ Thursday, March 8, 2007
+
+ U.S. House of Representatives
+
+ Subcommittee on Higher Education,
+
+ Lifelong Learning, and Competitiveness
+
+ Committee on Education and Labor
+
+ Washington, DC
+
+ ----------
+
+ The subcommittee met, pursuant to call, at 10:37 a.m., in
+Room 2175, Rayburn House Office Building, Hon. Ruben Hinojosa
+[chairman of the subcommittee] presiding.
+ Present: Representatives Hinojosa, Wu, Bishop, Altmire,
+Courtney, Scott, Davis of California, Davis of Illinois,
+Keller, McKeon, Foxx, Castle, Ehlers, and Biggert.
+ Staff present: Tylease Alli, Hearing Clerk; Denise Forte,
+Director of Education Policy; Gabriella Gomez, Senior Education
+Policy Advisor (Higher Education); Lamont Ivey, Staff
+Assistant, Education; Thomas Kiley, Communications Director;
+Ann-Frances Lambert, Administrative Assistant to Director of
+Education Policy; Danielle Lee, Press/Outreach Assistant;
+Ricardo Martinez, Policy Advisor for Subcommittee on Higher
+Education, Lifelong Learning and Competitiveness; Stephanie
+Moore, General Counsel; Lisette Partelow, Staff Assistant,
+Education; Rachel Racusen, Deputy Communications Director;
+Julia Radocchia, Education Policy Advisor; Robert Borden,
+General Counsel; Kathryn Bruns, Legislative Assistant; Steve
+Forde, Communications Director; Jessica Gross, Deputy Press
+Secretary; Taylor Hansen, Legislative Assistant; Amy Raaf
+Jones, Professional Staff Member; Jim Paretti, Workforce Policy
+Counsel; Linda Stevens, Chief Clerk/Assistant to the General
+Counsel; and Sally Stroup, Deputy Staff Director.
+ Chairman Hinojosa [presiding]. A quorum is present. The
+hearing of the subcommittee will come to order.
+ Pursuant to Committee Rule 12, any member may submit an
+opening statement in writing which will be made part of the
+permanent record.
+ [The prepared statement of Mr. Altmire follows:]
+
+Prepared Statement of Hon. Jason Altmire, a Representative in Congress
+ From the State of Pennsylvania
+
+ Thank you, Mr. Chairman, for holding this important hearing today
+on how students access and finance higher education.
+ I would like to extend a warm welcome to today's witnesses. I thank
+all of you for taking the time to be here and I look forward to hearing
+from you.
+ College access and affordability are the keys to ensuring America
+is competitive in the global economy. Unfortunately, in recent years,
+the United States has lagged, when compared to other industrialized
+countries, in the percentage of young adults enrolled in college and in
+the proportion of those students who graduate from college. The
+National Center for Public Policy and Higher Education's report,
+``Measuring Up 2006: The National Report Card on Higher Education''
+found that among 27 industrialized nations, the United States has
+fallen to fifth in the percentage of young adults enrolled in college
+and has dropped to sixteenth in the proportion of those students who
+graduate.
+ I am concerned that our nation is not doing enough to provide
+access to higher education to those who can not afford it and is not
+adequately ensuring that college students graduate with degrees. I am
+proud to say that this Congress has already taken two important steps
+towards improving college accessibility. We passed the College Student
+Relief Act, which will cut interest rates on student loans from 6.8% to
+3.4% over the next five years, and we voted to increase the maximum
+Pell Grant by $260 to $4,310.
+ These were necessary first steps and I look forward to working with
+the Committee to continue to improve student access and affordability
+to higher education.
+ Thank you again, Mr. Chairman. I yield back the balance of my time.
+ ______
+
+ I now recognize myself, followed by my good friend and
+colleague, Ranking Member Ric Keller, for an opening statement.
+ Welcome to the first hearing of the Subcommittee on Higher
+Education, Lifelong Learning and Competitiveness. This is the
+first of a series of hearings that we will hold on the
+reauthorization of the Higher Education Act.
+ I am looking forward to working with the members of the
+subcommittee and all of the stakeholders to develop legislation
+that will fulfill the promise of the Higher Education Act for
+the 21st century.
+ There is a growing concern that as a nation we are losing
+our competitive edge. We know from experience that investing in
+higher ed is one of our primary tools for sharpening that
+competitive edge.
+ After World War II we opened the doors of college far and
+wide to returning soldiers, rich, poor, black, white or
+Hispanic. Our nation became smarter, stronger and richer as a
+result of this egalitarian investment in education.
+ In 1965 president Lyndon Baines Johnson signed into law the
+Higher Education Act, which expanded our national commitment to
+broad access to higher education. Again, our economic
+prosperity and capacity for innovation grew as a result of this
+investment.
+ Yesterday, however, the study entitled, ``Hitting Home:
+Quality, Cost and Access Challenges Confronting Higher
+Education Today,'' was released by Jobs for the Future. This
+quantifies the scale of our challenge in higher education.
+ The report found that by year 2025 just to keep pace with
+our international competitors, the United States would need to
+produce an additional 15.6 million college graduates. That
+translated into another 781,000 degrees per year or a 37
+percent increase over current production.
+ There are no two ways about it. That is a tall order. We
+have not aligned our support for higher education to reflect
+this reality. We are shortchanging our next generation of
+college students. Hispanic and African American students will
+account for most of the growth in our traditional college-aged
+population, yet we know that nationally only half of these
+students are graduating from high school. Only 1 in 5 is
+college ready.
+ Many of our families do not understand financial aid for
+the college process. A recent survey conducted by the Tomas
+Rivera Policy Institute in California found that more than half
+of the Hispanic parents and only 43 percent of young adults
+could not name a single source of college financial aid.
+Certainly we can do better.
+ Overcoming these barriers of preparation and financial aid
+awareness is simply not enough to ensure college success. We
+know that cost is a major obstacle. The Advisory Committee on
+Student Financial Assistance estimates that in 2003 more than
+170,000 college-qualified low-income students did not enroll in
+any college at all because of financial barriers. Moreover, we
+know that just getting into college is not enough. The benefits
+of higher education come with degree completion. Too many of
+our students are not making it through to graduation.
+ The 110th Congress has already made a down payment on
+improving access and affordability. We have passed legislation
+reducing interest rates on subsidized student loans, ensuring
+all students have equal access to the maximum Pell Grant,
+regardless of whether they attend low-cost institutions, and
+providing the first increase in over 4 years to the Pell Grant,
+boosting the maximum grant to $4,310, which is a $260 increase.
+ This is real progress, but we are just getting started.
+Clearly, we need to expand access and success in higher
+education on a much larger scale than ever before. The
+reauthorization of the Higher Education Act is our opportunity
+to do that.
+ Our distinguished panel today will help us think about how
+to get this job done. Thank you for joining us, and I am
+looking forward to your testimony.
+ Before concluding, I want to ask for unanimous consent that
+a copy of the report that I mentioned in my opening remarks be
+made a part of this hearing today. Hearing no objection, it
+shall be done.
+ [The report follows:]
+
+ Hitting Home: Quality, Cost, and Access Challenges
+ Confronting Higher Education Today
+
+ An initiative of Lumina Foundation for Education
+
+ [March 2007; by Travis Reindl]
+
+ The United States needs to increase its production of postsecondary
+education degrees and reduce gaps in achievement among racial and
+socioeconomic groups. Otherwise, the country will not be able to meet
+workforce needs,maintain international economic competitiveness, and
+improve the quality of life for all Americans.
+ If current production patterns in postsecondary education persist,
+the nation will face a significant ``degree gap'' that puts it at a
+disadvantage relative to other leading developed nations. In fact, the
+size of this gap--the difference between degrees produced in the United
+States and those produced by nations who are among our top
+competitors--could reach almost 16 million degrees by 2025, according
+to new data prepared for the Making Opportunity Affordable initiative.
+ To close the gap, the nation's colleges and universities will need
+to increase the annual rate of degree production by more than 37
+percent. This estimate--prepared by the National Center for Higher
+Education Management Systems--focuses on top degree producing nations
+who are members of the Organisation for Economic Cooperation and
+Development and does not include India and China, whose degree
+production is also rising rapidly.
+ According to the new data, closing the gap will require the
+nation's colleges and universities to ensure that minority groups, non-
+traditional-age college students, and students from low-income
+backgrounds achieve the same levels of attainment that we see today
+among white and Asian Americans, traditional-age college students, and
+wealthier students. Simply reaching the current attainment levels of
+white students will depend on about 10.6millionmore people of color
+earning postsecondary degrees by 2025 than do so today. Paying for this
+level of expansion in postsecondary education will demand
+implementation of a two-fold agenda:
+ Introducing a new public investment strategy that includes
+growth in funding and a much sharper focus on expanding capacity and
+bolstering productivity in the delivery of higher education;
+ Encouraging higher education systems and institutions to
+be more cost-effective and collaborative with K-12 education in order
+to enhance student access and success, further contain costs, and
+introduce additional productivity improvements.
+ This will require states and institutions to set goals for quality,
+cost, and access, and to establish metrics for measuring progress.
+States and institutions also must institute multi-tiered strategies to
+address these challenges. These strategies include: strengthening
+inter-institutional collaboration through comprehensive approaches to
+articulation and transfer; focusing resources on core academic
+priorities; streamlining student transitions from K-12 to postsecondary
+education; promoting timely degree completion; and redesigning academic
+programs to improve student results while reducing cost. While there
+have been some examples of state and institutional action in these
+areas, this action has not been comprehensive, coordinated, or
+sustained. But those states and institutions that have moved forward to
+adopt these changes have seen promising results.
+ The multi-year Making Opportunity Affordable initiative aims to
+provide research, tools, and support to help states and institutions
+transform how they deliver postsecondary education to serve more
+students without reducing quality. By introducing more cost-effective
+approaches, states and their higher education systems can reinvest in
+access and quality improvements. Support for the initiative has been
+provided by Lumina Foundation for Education.
+1. Changing workforce demands
+ A recent study by the Bureau of Labor Statistics indicates that
+high-skill jobs that require advanced learning will make up almost half
+of all job growth in the United States.While low-skill jobs will
+continue to grow, the rapid expansion of high-skill work is an
+indication of the nation's shift from manufacturing and farming toward
+a more service- and information-based economy. In fact, jobs requiring
+an Associate's degree or beyond will increase at faster rates than jobs
+requiring less than an Associate's degree between now and 2014 (see
+Figure 1). The minimum level of education required in high growth
+fields is also likely to increase in the years ahead, which could widen
+the gap.
+
+
+
+
+ High educational attainment correlates with state economic strength
+and high income. A dozen states (California, Connecticut, Colorado,
+Delaware, Illinois, Maryland,Minnesota, New Hampshire, New Jersey, New
+York, Virginia, and Washington) have both high levels of personal
+income per capita and high percentages of working-age adults with four-
+year degrees. Only three states have high per-capita income and low
+educational attainment: Alaska, Michigan, and Nevada, all with
+economies tilted toward high-wage industries requiring lower levels of
+education.
+2. Underlying problems
+ In many ways the United States is doing better and worse when it
+comes to higher education. The nation's higher education system has
+historically been the strongest in the world, and by some measures
+still is. The number of students pursuing degrees is at an all-time
+high. Academic preparation for college-level work is improving.
+College-going rates are holding steady despite double-digit tuition
+increases.
+ But these signs of success mask deeper problems. The percentage of
+our population earning college degrees is stagnating, because a larger
+proportion of young people are not entering or not progressing through
+postsecondary education. Low-income and minority students--the segments
+of the population growing most rapidly--are not succeeding at rates
+equivalent to their growth. Meanwhile, rising expenditures by students
+and taxpayers are not resulting in better learning, which points to a
+dangerous ``productivity gap.''
+ Changing Demographics. The number of students attending higher
+education institutions has grown dramatically recently, but the
+composition of that population is changing along with that of the
+population as a whole. According to the U.S. Census Bureau, the
+percentages of African Americans and Latinos from 18 to 44 years old
+will rise by about 30 percent between 2000 and 2025, an increase of
+about 10 million people. Meanwhile, as the white population ages, the
+percentage of white adults from 18 to 44 will decline by 6.1 percent, a
+drop of 4.4 million. Among 18- to 24-year-old white young adults, the
+population will drop 9.6 percent. So the United States must
+dramatically increase degree production while more effectively serving
+groups who typically have not succeeded at the same rates as whites.
+ Rising Costs and Prices. The costs of providing higher education
+and the prices paid by students and their families have increased
+substantially. Even when adjusted for inflation, tuition and fees have
+risen 24 percent at four year public universities over the past five
+years and 32 percent over the past decade, according to Trends in
+College Pricing 2006, a study conducted by the College Board. The
+report reveals that tuition and fees at private institutions have risen
+11 percent in the past five years and 25 percent in the past decade in
+inflation-adjusted dollars. Meanwhile, public two-year institutions
+have done a better job limiting price increases, but even their tuition
+and fees have risen 22 percent in the past decade when adjusted for
+inflation (see Figure 2).
+
+
+
+
+ The result has been that lower- and middle-class families are
+having a harder time paying for college. More poor16.6% students are
+staying away, and large percentages of students face heavy debt as they
+enter the workforce. According to the American Association of State
+Colleges and Universities, today two out of three students who attend
+public colleges and universities graduate with debt, and the average
+borrower owes $17,250 in student loans. Ten years ago, the average
+student borrower attending a public college or university graduated
+owing $8,000 in student loans after adjusting for inflation.
+ Rising prices are the tip of the iceberg. The amount of money that
+colleges and universities spend to provide education to their students
+is rising faster than consumer prices and health care costs. Over the
+past decade, the Higher Education Price Index has increased
+significantly faster than the nation's Consumer Price Index, which
+measures the relative cost of a typical basket of goods and responds to
+changes in the economy as a whole. According to data from the
+Commonfund Institute, the past decade has seen the HEPI rise 31
+percent, including an 18 percent increase in the last five years alone.
+Meanwhile, the CPI has risen 22 percent and 12 percent, respectively.
+ There are disagreements about the causes of these cost increases,
+and some experts argue that universities cannot control spending growth
+because funding is always needed to improve quality. The Making
+Opportunity Affordable initiative is investigating the real patterns of
+spending in higher education and has found evidence that cost increases
+are not inevitable. Institutions can control costs and maintain access
+and quality if they do a better job of targeting resources to programs
+that benefit students. A new study to be released by the initiative
+later this year will provide new information on what is driving up
+costs.
+ In the past, colleges have avoided coming to terms with cost
+management by seeking new revenues--in the form of private fundraising
+and student tuition increases--rather than changing practices. This
+promotes what Charles Miller, chairman of the U.S. Secretary of
+Education's Commission on the Future of Higher Education, has called
+``a top-line structure with no real bottom line.'' The revenue chase
+cannot continue. State appropriations for higher education are failing
+to keep pace with enrollment increases and inflation. Legislatures have
+increased funding for higher education by an average of 3 percent
+annually in recent years, but have many competing priorities. States
+also are facing large structural deficits--service demands in excess of
+available revenues--that could limit resources available to address
+these challenges. Private giving is highly variable and cannot be
+relied on by higher education as a budget balancer.
+ The public is beginning to push back against constant tuition
+hikes, raising questions about whether college is worth it and whether
+colleges are doing the best they can to enable students to attend. More
+than two-thirds of Americans (68 percent) believe that colleges and
+universities could reduce their costs without hurting the quality of
+the institutions, according to a 2004 Chronicle of Higher Education
+poll.
+ Quality. How well are students doing? Our understanding of student
+knowledge and skills comes from national studies, which indicate that
+the mathematical proficiency and document/prose literacy of college
+graduates have not improved and, in some cases, actually have declined
+over the past decade. Adults with college degrees dropped 11 points in
+prose literacy and 14 points in document literacy between 1992 and
+2003, according to the National Assessment of Adult Literacy. A 2005
+study by American Institutes for Research revealed that 20 percent of
+U.S. college students completing four-year degrees--and 30 percent of
+students earning two-year degrees--have only basic quantitative
+literacy skills. According to the study,more than 75 percent of
+students at two-year colleges and more than 50 percent of students at
+four-year colleges score below the literacy proficiency level. They
+lack the skills to perform complex literacy tasks, such as comparing
+credit card offers with different interest rates or summarizing the
+arguments of newspaper editorials.
+ In addition, structural forces make it difficult for states and
+institutions to focus on these issues in a sustained way. State funding
+cycles promote reactivity and crisis management rather than thoughtful
+planning. Also, many states and institutions do not fully understand
+why costs are rising, in what areas they are rising, and what tools or
+knowledge will help them determine what to do.
+ As a result of changing demographics, rising costs and prices, the
+erosion of quality, and these structural forces, we are losing ground
+in helping to ensure that all Americans can attend college at a cost
+the nation and its families can afford.
+3. The degree gap
+ According to the analysis of OECD data, the U.S. deficit in degree
+attainment poses a serious threat to the nation's economic well-being.
+Other highly competitive nations are improving the quality of the
+education they provide their young people, while also radically
+increasing the capacity of the systems that serve them. These nations
+have overtaken the United States' long-time position as the world
+leader in degree production relative to population as a whole.
+ Today seven nations (Belgium, Canada, Ireland, Japan, Norway, South
+Korea, and Sweden) lead the United States in degree attainment (see
+Figure 3). More than half of Japanese and Canadian 25- to 34-year-olds,
+for example, have a Bachelor's or Associate's degree, while only 4 in
+10 Americans in this age group have earned postsecondary degrees.
+
+
+
+
+
+ We are losing ground to other nations largely because of relatively
+low college completion rates. Although the United States still ranks in
+the top five in the proportion of young people who attend college, it
+ranks 16th in the proportion who actually finish, according to the
+National Center on Public Policy and Higher Education's Measuring Up
+2006 report. While estimates vary, American universities award about 18
+degrees for every 100 full-time students enrolled. The leading nations
+(Japan, Portugal, and the United Kingdom) award about 25 degrees. So
+these nations are experiencing more positive returns on their
+investments in higher education.
+ As other countries ratchet up access and attainment, American Baby
+Boomers, the best-educated workers in history, are retiring and being
+replaced in the workforce by young people who possess less knowledge
+and weaker skills than the current generation. In fact, the United
+States and Germany are alone among OECD nations in this respect: The
+percentage of their workers ages 25-34 who have a postsecondary degree
+is actually smaller than the percentage of Baby Boom workers ages 45-54
+with such a degree.
+ For the first time, researchers have examined the extent of the gap
+in degree attainment between the United States and the rest of the
+world and its consequences. A new report, based on data analysis
+conducted for Making Opportunity Affordable by NCHEMS, will be released
+in May. This report, The Degree Gap, estimates that the United States
+will need to produce 15.6 million more Bachelor's and Associate's
+degrees beyond currently expected levels if the nation is to keep up
+with its best performing peers--781,000 additional degrees per year
+between now and 2025, an increase of 37 percent over the current pace
+of degree production. According to the report, only eight states and
+the District of Columbia are on pace to meet this ambitious goal. But
+even states on course to close the gap will do so only by more
+effectively serving a growing population of historically
+underrepresented racial and ethnic groups. Some states will have to
+more than double the numbers of young people who obtain college degrees
+by 2025. This could have severe fiscal consequences, but states that
+take on the challenge could see tremendous economic benefit (see Figure
+4).
+
+
+
+
+
+ However one looks at the problem, the United States has miles to go
+to eliminate racial and ethnic disparities in degree production,
+strengthen the domestic workforce to meet demand for higher skills and
+knowledge, and remain internationally competitive. Colleges and
+universities will have to ensure that minority groups achieve at the
+same levels as white and Asian Americans, and earn about 10.6 million
+more postsecondary degrees by 2025 than would be the case given current
+circumstances (see Figure 5).
+
+
+
+
+
+4. What needs to be done
+ The magnitude of the challenge indicates that business as usual is
+unacceptable. The solution combines two approaches: a) sustained
+investment in higher education; and b) redesigned institutional
+practice and public policy to promote greater cost-effectiveness,
+informed by new knowledge and metrics.
+ A national agenda for redesigning the higher education system
+should include several crucial elements. Consumers and the federal
+government must continue to advocate broader access, improved
+productivity, and better quality in postsecondary education. Much of
+the heavy lifting, however, needs to come from state policymakers and
+higher education decision-makers to:
+ Set goals for quality, cost, and access, and establish metrics for
+measuring progress. Development of strategic plans and public agendas
+at the campus, system, and state levels demands goals and metrics that
+address resource use in relation to student results. Because much of
+the data and information essential to this work are not currently
+available or widely used, the Making Opportunity Affordable initiative
+will make significant investments in creating and testing these tools.
+ Pursue multiple strategies for meeting these goals, including:
+Strengthening inter-institutional collaboration through comprehensive
+approaches to articulation and transfer to reduce repeat course-taking
+and student attrition. Florida has taken the lead in addressing these
+concerns by ensuring that most community college graduates will be
+deemed to have met all general education requirements and will be
+guaranteed admission into the upper division (junior status) of a state
+university. State institutions also abide by a uniform system of course
+numbering, and the state offers a Web site that provides unbiased
+advising about postsecondary opportunities. Some states have initiated
+joint degree programs to fully utilize existing investments. North
+Dakota offers a joint program in nursing in which course delivery moves
+from campus to campus, with many institutions participating, allowing a
+needed program to be offered on a periodic basis in sparsely populated
+areas without the typical inefficiencies associated with providing
+expensive programs in rural communities.
+ Focusing resources on core academic priorities
+ A few states, such as Ohio and Virginia, have instituted
+productivity reviews that identify undersubscribed majors at all public
+institutions and reallocate public funds away from those majors if they
+fall below a designated threshold. The Illinois Priorities Quality and
+Productivity initiative in the mid-1990s pursued this goal by providing
+a common set of data about individual program performance to
+institutions. After providing the data, the Illinois Board of Higher
+Education left the decision about which programs to eliminate up to the
+institutions so long as they improved institutional performance within
+established guidelines.
+ Streamlining student transitions to reduce rework and
+ attrition
+ This includes offering accelerated learning options (e.g., Advanced
+Placement/International Baccalaureate, dual/concurrent enrollment,
+Early College High Schools) and early intervention programs to boost
+student preparation. In California, the 11th grade standards test
+serves as a barometer of readiness for courses in the California State
+University system, giving students early warning about their college
+preparation. Washington's Running Start program reaches about 10
+percent of high school juniors and seniors in the state. Running Start
+students who transfer their credits to four-year institutions complete
+Bachelor's degrees with an average of 33 fewer state-supported credits
+than other students, resulting in lower net costs for both the student
+and the state. Once in college, Running Start students also appear to
+perform as well as, and in some cases better than, their peers.
+ Promoting timely degree completion to create increased
+ capacity for new enrollment
+ New York's Bundy Aid program, for example, rewards private
+institutions for graduating New York State residents, providing strong
+incentives for ensuring degree completion. Western Governors University
+uses test-out provisions and other institutions use College Level
+Examination Program scores to allow qualified students to advance
+faster.
+ Redesigning academic programs to improve student results
+ while reducing cost
+ Institutions don't need to tie up several faculty members to teach
+introductory courses in high-demand subject areas. A recent pilot study
+by the National Center for Academic Transformation found that 25 of 30
+institutions that redesigned a popular course by making smart use of
+technology and engaging professors as tutors, rather than lecturers,
+improved learning outcomes, while reducing cost by an average of 37
+percent. Later in 2007, the National Center for Public Policy and
+Higher Education will release a detailed report for the initiative on
+effective practices to promote lower cost, equitable access, and higher
+quality and productivity among states and institutions.
+ We are at a crucial turning point. The U.S. economy is still
+strong, and has the potential to remain strong into the future. The
+nation's workforce is one of the most highly skilled and productive in
+the world, and can stay that way. But this will happen only if the
+country makes strategic choices about how we prepare today's
+workforce--and the workforce of 20 years from today.
+ The structural changes necessary to put the system on track to meet
+the attainment benchmark will require breaking with tradition, on many
+levels, and recentering institutions on their core missions.
+ Higher education in the United States successfully addressed the
+economic, demographic, and technological challenges of the 19th and
+20th centuries, educating new Americans in the Industrial Age,
+educating the ``greatest generation'' in the post-WWII era, and opening
+doors to women and minorities in more recent times. The development of
+land grant colleges, the expansion of higher education made possible by
+the GI Bill, and the establishment of community colleges reduced
+disparities in opportunity created a workforce able to satisfy the
+demands of the state and local economies, and they drove innovation
+that resulted in continuous economic growth and improvements in the
+quality of life and standard of living for almost all Americans.
+States, institutions, and the nation must make no less a commitment to
+confront the new global challenges of the 21st century, acting boldly
+to expand opportunity and produce the talent the nation needs at a cost
+taxpayers and students can afford.
+ ______
+
+ Chairman Hinojosa. With that, I yield to my good friend and
+ranking member Ric Keller of the great state of Florida for his
+statement.
+ [The statement of Mr. Hinojosa follows:]
+
+ Prepared Statement of Hon. Ruben Hinojosa, Chairman, Subcommittee on
+ Higher Education, Lifelong Learning, and Competitiveness
+
+ Good Morning. Welcome to the first hearing of the Subcommittee on
+Higher Education, Lifelong Learning and Competitiveness.
+ This is the first of a series of hearings that we will hold on the
+reauthorization of the Higher Education Act. I am looking forward to
+working with the Members of the subcommittee and all of the
+stakeholders to develop legislation that will fulfill the promise of
+the Higher Education Act for the 21st century.
+ There is a growing concern that, as a nation, we are losing our
+competitive edge. We know from experience that investing in higher
+education is one of our primary tools for sharpening that competitive
+edge.
+ After World War II, we opened the doors of college far and wide to
+returning soldiers--rich, poor, black, white or Hispanic. Our nation
+became smarter, stronger and richer as a result of this egalitarian
+investment in education.
+ In 1965, President Johnson signed into law the Higher Education
+Act, which expanded our national commitment to broad access to higher
+education. Again, our economic prosperity and capacity for innovation
+grew as result of this investment.
+ Yesterday, the study ``Hitting Home: Quality, Cost, and Access
+Challenges Confronting Higher Education Today'' was released by Jobs
+for the Future. This quantifies the scale of our challenge in higher
+education. The report found that by the year 2025, just to keep pace
+with our international competitors, the United States would need to
+produce an additional 15.6 million college graduates. That translates
+to another 781,000 degrees per year or a 37 percent increase over
+current production. There are no two ways about it--that is a tall
+order. We have not aligned our support for higher education to reflect
+this reality.
+ We are shortchanging our next generation of college students.
+Hispanic and African American students will account for most of the
+growth in our traditional college aged population. Yet, we know that
+nationally, only half of these students are graduating from high school
+on time. Only one in five is college-ready.
+ Many of our families do not understand financial aid or the college
+process.
+ A recent survey conducted by the Tomas Rivera Policy Institute
+found that more than half of Hispanic parents and 43 percent of young
+adults could not name a single source of college financial aid.
+Certainly, we can do better.
+ Overcoming these barriers of preparation and financial aid
+awareness is simply not enough to ensure college success. We know that
+cost is a major obstacle.
+ The Advisory Committee on Student Financial Assistance estimates
+that in 2003, more than 170,000 college-qualified low-income students
+did not enroll in any college at all because of financial barriers.
+ Moreover, we know that just getting into college is not enough. The
+benefits of higher education come with degree completion. Too many of
+our students are not making it through to graduation.
+ The 110th Congress has already made a down payment on improving
+access and affordability. We have passed legislation reducing interest
+rates on subsidized students loans, ensuring all students have equal
+access to the maximum Pell grant--regardless of whether they attend
+low-cost institutions, and providing the first increase in over 4 years
+to the Pell grant, boosting the maxim grant to $4310--a $260 increase!
+ This is real progress, but we are just getting started. Clearly, we
+need to expand access and success in higher education on a larger scale
+than ever before. The reauthorization of the Higher Education Act us
+our opportunity to do that.
+ Our distinguished panel today will help us think about how to get
+this job done. Thank you for joining us. I am looking forward to your
+testimony.
+ With that, I yield to my good friend and ranking member, Ric Keller
+of the great state of Florida.
+ ______
+
+ Mr. Keller. Well, thank you, Chairman.
+ And, Chairman Hinojosa, as this is our first subcommittee
+hearing in the new Congress, let me personally congratulate you
+on your chairmanship. I look forward very much to working
+closely with you over the next 2 years on the very important
+issues this panel addresses, from college access to job
+training and everything else in between.
+ I would also like to welcome all of our witnesses and thank
+all of you for taking the time to come and testify before the
+subcommittee today.
+ The issue of student access to college and ways in which
+students are financing their college education are important
+ones to me. Pell Grants and student loans helped me to go to
+college.
+ We have seen substantial increases in federal financial aid
+since 2000. For example, Pell Grant funding is up 80 percent
+from $7.6 billion in 2000 to $13.7 billion today. The maximum
+award since 2000 has increased from $3,300 to $4,310 today. And
+these increases have made it possible for an additional million
+and a half students to receive Pell Grants since 2000.
+ On top of this dramatic influx in new aid, my colleagues on
+the Education and Labor Committee have tried to move the
+national dialogue about higher education beyond just federal
+spending to get to the heart of what I believe is the real
+problem, why costs are rising so dramatically and what we can
+do to stabilize this trend.
+ With that goal in mind, we held over 30 hearings,
+considered several bills and passed a reauthorization of the
+Higher Education Act in the House in the form of H.R. 609, the
+College Access and Opportunity Act.
+ The last point I believe is the crux of this decision, what
+is causing the cost of higher education to sky rocket and what
+can be done to slow down or reverse this dangerous trend.
+According to the most recent College Board report, over the
+last 5 years there was a 35 percent increase in tuition and
+fees at 4-year public colleges. This increase is higher than
+any other 5-year increase since the 1976-1977 year. For private
+4-year institutions, that number was 11 percent
+ Unfortunately, the sky rocketing cost of tuition minimizes
+the positive impact of our increases in important financial aid
+programs, such as Pell Grants, so earlier this year the full
+committee's ranking member, Congressman McKeon, and I,
+introduced H.R. 472, the College Affordability and Transparency
+Act, which was adopted from the affordability provisions in
+H.R. 609.
+ Our bill aims to provide more information to students, not
+just about college tuition prices but about net price, which we
+define as the amount the student must pay after the grant aid
+is subtracted from tuition. This is a measure and a concept I
+am hopeful we will have the opportunity to discuss more as the
+reauthorization process moves forward.
+ I will also be introducing the One Stop Student Financial
+Aid Information Act of 2007 in the coming days, which will make
+it easier for students and parents to learn more about their
+financial aid options for college by providing all this
+information on one easy to access Web site.
+ What I am most interested in learning here today is what
+the other partners in higher education are doing. I am
+interested in learning more about how states are treating
+higher education and whether states are doing their part to
+ensure that their citizens are able to achieve the dream of a
+college education.
+ I am also interested in hearing more about what is being
+done in the elementary schools and high schools to make sure
+students are academically prepared to attend college. And,
+finally, I am interested in hearing what institutions are doing
+to make sure that their costs do not continue to spiral out of
+control.
+ Before I conclude, I would like to thank our witnesses once
+again for agreeing to testify before the subcommittee today,
+and I look forward to the beneficial dialogue that I am sure
+will take place here today.
+ With that, I yield back, Mr. Chairman.
+ [The statement of Mr. Keller follows:]
+
+ Prepared Statement of Hon. Ric Keller, Senior Republican Member,
+Subcommittee on Higher Education, Lifelong Learning and Competitiveness
+
+ Chairman Hinojosa, as this is our first subcommittee hearing in the
+new Congress, let me congratulate you on your chairmanship. I look
+forward to working closely with you over the next two years on the very
+important issues this panel addresses, from college access to job
+training and everything in between. I'd also like to welcome all of our
+witnesses and thank all of you for taking the time to come and testify
+before the Subcommittee today.
+ The issue of student access to college and ways in which students
+are financing their college education are important ones to me. Pell
+Grants and student loans helped me go to college.
+ We've seen substantial increases in federal financial aid since
+2000. For example, Pell Grant funding is up 79%, from 7.6 billion in
+2000 to 13.6 billion today. The maximum award since 2000 has increased
+from $3,300 to $4,310 today. And these increases have made it possible
+for an additional million and a half students to receive Pell Grants
+since 2000.
+ On top of this dramatic influx in new aid, my colleagues on the
+Education and Labor Committee have tried to move the national dialogue
+about higher education beyond just federal spending, to get to the
+heart of what I believe is the real problem: why costs are rising so
+dramatically and what we can do to stabilize this trend. With that goal
+in mind, we held over 30 hearings, considered several bills, and passed
+a reauthorization of the Higher Education Act in the House in the form
+of H.R. 609, the College Access and Opportunity Act.
+ That last point, I believe, is at the crux of this discussion. What
+is causing the cost of higher education to skyrocket, and what can be
+done to slow down or reverse this dangerous trend? According to the
+most recent College Board report, over the last five years, there was a
+35 percent inflation-adjusted increase in tuition and fees at four year
+public colleges. This increase is higher than any other five year
+increase since 1976-77. For private four year institutions, that number
+was 11 percent.
+ Unfortunately, the skyrocketing cost of tuition minimizes the
+positive impact of our increases to important financial aid programs,
+such as Pell Grants. So, earlier this year, the full Committee's
+Ranking Member, Congressman McKeon and I introduced H.R. 472, the
+College Affordability and Transparency Act, which was adapted from the
+affordability provisions in H.R. 609. Our bill aims to provide more
+information to students not just about college tuition prices, but also
+about net price, which we define as the amount the student must pay
+after grant aid is subtracted from tuition. This is a measure and a
+concept I am hopeful we will have the opportunity to discuss more as
+the reauthorization process moves forward.
+ I will also be introducing the One Stop Student Financial Aid
+Information Act of 2007 in the coming days, which will make it easier
+for students and parents to learn more about their financial aid
+options for college by providing all this information on one easy to
+access website.
+ What I am most interested in learning here today is what the other
+``partners'' in higher education are doing. I am interested in learning
+more about how States are treating higher education and whether States
+are doing their part to ensure that their citizens are able to achieve
+the dream of a college education. I am also interested in hearing more
+about what is being done in elementary schools and high schools to make
+sure students are academically prepared to attend college. And finally,
+I am interested to hear what institutions are doing to make sure that
+their costs do not continue to spiral out of control.
+ Before I conclude, I'd like to thank our witnesses once again for
+agreeing to testify before the Subcommittee today. I look forward to
+the beneficial dialogue that I am sure will take place here today.
+ ______
+
+ Chairman Hinojosa. Thank you.
+ I also want to welcome ranking member of the whole
+Committee of Education and Labor, Congressman Buck McKeon from
+California, and would invite him to give some opening remarks.
+ You want to pass on that?
+ Without objection, all members will have 14 days to submit
+additional materials or questions for the hearing record.
+ At this time, I would like to introduce our very
+distinguished panel of witnesses here with us this afternoon.
+ The first one will be Dr. David Breneman, who received his
+doctorate from the University of California at Berkeley. He is
+a nationally acclaimed economist and author and has taught at
+various universities, including Harvard. For the past 10 years,
+he has served as dean of their Curry School of Education at the
+University of Virginia. Recently, he chaired the National
+Advisory Group that reviewed the report we will discuss today,
+entitled ``Measuring Up 2006.''
+ Next we are going to hear from Ross Wiener, who is vice
+president for programs and policy at the Education Trust, a
+national nonprofit organization focused on closing the
+achievement gaps in public education. He is a graduate with
+high honors from the George Washington University Law School
+and has clerked for the U.S. Court of Appeals for the First
+District. Prior to coming to Education Trust, he served as a
+trial attorney in the civil rights division of the U.S.
+Department of Justice.
+ Later we will hear from Jamie Merisotis. Jamie is the
+founding president of the Institute for Higher Education
+Policy, a highly respected organization established in
+Washington, D.C. He is a leading authority and has published
+extensively in the higher education field. Prior to founding
+the institute, Mr. Merisotis was the executive director of the
+National Commission on Responsibilities for Financing
+Postsecondary Education, a bipartisan commission appointed by
+the president and congressional leadership.
+ We will also hear from Don Soifer, who is executive vice
+president for the Lexington Institute in Arlington, Virginia.
+He has published extensively on various aspects of education
+policy, accountability and assessment, higher education finance
+and closing the achievement gaps. Mr. Soifer has testified
+twice before the U.S. Congress as well as various state
+legislatures. In addition, he has served as a consultant to the
+Virginia Department of Education. He is a 1990 graduate of
+Colgate University and is a resident of the District of
+Columbia.
+ I want to welcome each and every one of you, and we will
+start with the first--I forgot to give you some of the rules
+that we are going to go by. Allow me to say that for those of
+you who have not testified before this subcommittee, let me
+explain our lighting system and the 5-minute rule.
+ Everyone, including members, is limited to 5 minutes of
+presentation or questioning. The green light is illuminated
+when you begin to speak. When you see the yellow light, it
+means you have 1 minute remaining. When you see the red light,
+it means your time has expired and you need to conclude your
+testimony.
+ Please be certain, as you testify, to turn on and speak
+into the microphone in front of you.
+ The rules of the committee, adopted January 24, give the
+chair the discretion on how to recognize members for
+questioning. It is my intention as chairman of this
+subcommittee to recognize those member present and seated at
+the beginning of the hearing in the order of their seniority on
+this subcommittee. Members arriving after the hearing has begun
+will be recognized in order of appearance.
+ With that, we are going to ask the first presenter to start
+with his presentation.
+ Welcome.
+
+ STATEMENT OF DAVID BRENEMAN, DEAN AND PROFESSOR, CURRY SCHOOL
+ OF EDUCATION
+
+ Mr. Breneman. Mr. Chairman and members of the committee, I
+am very pleased to be here. I am testifying on my own behalf as
+an economist who has written about higher education for over 35
+years and who has served as an administrator in both private
+and public institutions.
+ My remarks will focus primarily on ``Measuring Up 2006,'' a
+report which I believe has been supplied to all members of the
+committee.
+ The series of ``Measuring Up'' reports are best understood
+as a benchmarking exercise, evaluating empirically the
+performance of the 50-state systems of higher education using
+35 data indicators organized into six categories. States are
+ranked from best to worst performance and grades are assigned
+accordingly.
+ The purpose of these reports is to provide each state with
+ah empirical measure of how it stacks up against the other
+states and to encourage them toward better performance. In the
+2006 report, a new international dimension was added as we were
+able to include comparable data from 26 member OECD countries.
+The results from that information were stunning.
+ The first finding was that for older citizens, those aged
+35 to 64, the U.S. lags only Canada in the percentage of adults
+with college degrees. When one looks at the younger generation,
+however, age 25 to 34, the United States drops to eighth place.
+ Clearly, the early advantage this country had, which you
+eluded to in your remarks, in ensuring mass higher education
+for the baby boom generation, has eroded as other countries
+have overtaken us in producing educated talent.
+ When one turns to college participation rates for students
+age 18 to 24, Korea leads the list at 48 percent while the U.S.
+is fifth at 35 percent. Finally, the U.S. ranks in the bottom
+half, 16th among 27 countries, in the proportion of students
+who complete college degrees or certificate programs.
+ The other key findings in the 2006 report are that while
+middle and secondary school preparation for college has shown
+some improvement from the early 1990s, participation and
+completion rates in college have been flat for really about 15
+years.
+ Finally, by our measures, virtually every state received a
+failing grade on affordability.
+ Members of this committee are well aware of the serious
+efforts being made at the federal, state and local level to
+improve K-12 performance, student performance, but it must seem
+obvious that the country is sending decidedly mixed messages to
+young people, encouraging them on the one hand to prepare for
+college and then pricing many of them out of the market or
+forcing them to work long hours while enrolled or to incur
+substantial debt.
+ I will conclude my remarks with some thoughts on
+affordability.
+ Starting at the state level, competing priorities in state
+government budgets have meant that the days of low or no
+tuition are behind us never to return. One result has been
+rising public tuitions, putting an end to one of the oldest
+state policies to ensure affordability. The Pell Grant program,
+enacted in 1972, was built on the assumption that states would
+maintain low tuition policies and the federal government could
+help to cover the other costs of attendance. That implicit
+understanding has long since broken down with the result that
+the maximum Pell Grant has not kept up to the rising cost of
+college.
+ Further muddying the water were the tuition tax credits
+passed in the late 1990s that broke with the longstanding
+pattern of concentrating federal funds on those with lowest
+income.
+ States have responded in part with their own student aid
+programs, but in several states these are reward and merit and
+are not targeted to the low-income student. Institutions have
+vastly expanded their own aid programs, but again with much of
+the money allocated competitively to attract students to a
+particular campus through merit aid.
+ The resulting ``system,'' and I put that in quotations, of
+financial aid lacks coherence and presents a barrier to
+students who lack the sophistication and guidance about how to
+navigate the multiple and overlapping federal, state and
+institutional programs. The fact that no obvious forum exists
+where federal, state and institutional policies can be worked
+on simultaneously renders the problem of coherence elusive.
+ Let me close by noting one further anomaly in the market
+for higher education. In normal markets, competition among
+suppliers tends to keep prices down. Higher education operates
+in an intensely competitive market, but the effect of
+competition in this case leads to higher rather than lower
+prices. Why is that so?
+ No traditional college or university seeks to increase its
+market share of total enrollment. There are no potential
+Walmarts in the nonprofit sector of higher education. Rather,
+the competition is for quality, prestige and selectivity and
+the resulting status competition conveys a clear advantage for
+those institutions at the top of the pecking order. Colleges
+and universities further down the pack strikes to enhance their
+own standing in this ranking by spending more on their
+programs.
+ Increased competition, therefore, is not the solution to
+rising prices in this market and workable regulatory mechanisms
+have eluded state and federal officials as well. Ensuring
+affordability should be the highest priority of this committee
+for if we fail to enhance educational opportunity, we will all
+be the losers.
+ Thank you.
+ [The statement of Mr. Breneman follows:]
+
+ Prepared Statement of David W. Breneman, Dean and Professor, Curry
+ School of Education
+
+ Mr. Chairman, members of the committee, I am pleased to have the
+opportunity to present my views on the topic of this hearing. I am
+testifying on my own behalf as an economist who has written about
+higher education for over 35 years, and who has served as an
+administrator in both private and public institutions. My remarks, as
+requested, will focus on my work over the past decade as chair of an
+advisory committee to the National Center on Public Policy and Higher
+Education, a non-partisan, foundation-sponsored independent entity. The
+National Center has produced four national report cards on higher
+education performance, the most recent being Measuring Up 2006, copies
+of which I believe you have. I will note the highlights of this most
+recent report, and add some comments of my own on the issue of college
+affordability.
+ The series of Measuring Up reports are best understood as a
+benchmarking exercise evaluating empirically the performance of our 50
+state systems of higher education. The unit of evaluation is the state,
+not the institutions individually, and all components of the
+postsecondary sector in each state are included. The report evaluates
+each state in six categories: preparation, participation,
+affordability, completion, benefits, and learning. A number of data
+indicators, 35 in total, make up these categories, and the grades
+assigned in each category are determined through a weighted average of
+the individual indicators. The states are ranked from best to worst
+performance, and grades are assigned accordingly.
+ The purpose of these reports is to provide each state with an
+empirical measure of how it stacks up against the other states, as a
+way to encourage better performance. In the 2006 report, a new,
+international dimension was added, as we were able to include similar
+data from 26 OECD member countries. It was our view that the global
+economy requires each state to consider not just how its performance
+compares with the other states but with other developed nations as
+well. The results from that additional information were stunning.
+ The first finding was that for older citizens (ages 35 to 64), the
+U.S. lags only Canada in the percentage of adults with college degrees,
+Canada having 41% compared to the U.S. 39%. When one looks at younger
+adults, however, (ages 25 to 34), the U.S. drops to 8th place, behind
+Canada, Japan, Korea, Finland, Norway, Sweden, and Belgium. Clearly,
+the early advantage this country had in assuring mass higher education
+for the ``baby boom'' generation has eroded, as other countries have
+overtaken us in the production of educated talent.
+ When one turns to college participation rates of students aged 18
+to 24, Korea leads the list at 48%, with the U.S. fifth at 35%.
+Finally, the U.S. ranks in the bottom half--16th among the 27
+countries--in the proportion of students who complete college degree or
+certificate programs. These data alone should shock us out of the
+complacent view, long held, that U.S. higher education is the envy of
+the world.
+ The other key findings in the 2006 report are that while middle and
+secondary school preparation for college has shown some improvement
+from the early 1990s, participation and completion rates in college
+have been flat for 15 years. Nor have the large gaps in college
+attendance that correlate with either income or race and ethnicity been
+narrowed. Finally, the report's measure of college affordability gives
+precision to the widely-recognized fact that the cost of college is
+rapidly outstripping the ability of many families to pay. Indeed, by
+our measures, virtually every state received a failing grade on
+affordability.
+ Members of this committee are well aware of the serious efforts
+being made at the federal, state, and local levels to improve student
+performance in K-12 education. No Child Left Behind is the signature
+program for this effort. Yet it must seem obvious that the country is
+sending decidedly mixed messages to young people, encouraging them on
+the one hand to prepare for college, and then pricing many out of the
+market, or forcing them to work long hours while enrolled, or to incur
+substantial debt. Let me conclude with a few remarks on affordability.
+ The reasons for rising tuitions are complicated and would require a
+separate hearing to explore. Competing priorities in state government
+budgets have meant that the days of low or no tuition are behind us,
+never to return. One result has been rising public tuitions, putting an
+end to one of the oldest state policies to assure affordability. The
+Pell Grant program was enacted in 1972, when public tuition levels were
+still very low, and a few among us may be old enough to remember that
+the original Basic Educational Opportunity Grant (as Pell was initially
+called), was designed to cover non-tuition costs. In short, that
+program was built on the assumption that states would maintain low
+tuition policies, and the federal government could help to cover other
+costs of attendance. That implicit understanding has long since broken
+down, with the result that the maximum Pell Grant has not kept up with
+the rising cost of college, as these costs have been shifted from the
+general taxpaying public to the student. Further muddying the water
+were the tuition tax credits passed in the late 1990s that broke with
+the long-standing pattern of concentrating federal funds on those of
+lowest income. Various forms of tax-favored savings and tuition futures
+plans from the 1990s further extended aid up the income scale.
+ The states have responded in part with their own student aid
+programs, but in several states these have taken the form of merit-
+based programs, modeled on the Georgia HOPE program, and are not
+targeted at the low income student. Institutions have vastly expanded
+their own aid programs, but again with much of the money allocated
+competitively to attract students to a particular campus through merit
+aid. Loan programs have proliferated, often part of an aid offer by the
+institution that is ``preferentially packaged'' to deliver more loan
+than grant aid to the less-competitive applicants, regardless of family
+income.
+ The resulting ``system'' of financial aid lacks coherence, and
+presents a barrier to students who lack the sophistication and guidance
+about how to navigate the multiple and overlapping federal, state, and
+institutional programs. I commend Secretary Spellings and Deputy
+Secretary Martinez-Tucker in working toward simplification of the
+federal programs, and I hope this committee encourages and supports
+such efforts. (I also hope that the core federal commitment to need-
+based aid is sustained.) No panacea is obvious, however, because the
+system has evolved as it has in response to various political pressures
+that are unlikely to go away. The fact that no obvious forum exists
+where federal, state, and institutional policies can be worked on
+simultaneously renders the problem of coherence elusive. But
+understanding how the ``system'' works (or fails to work) is the first
+step toward meaningful reform.
+ Let me close by noting one further anomaly in the market for higher
+education. In normal markets, competition among suppliers tends to keep
+prices down. Higher education operates in an intensely competitive
+market, but the effect of competition in this case leads to higher,
+rather than lower, prices. Why is that so? No traditional college or
+university seeks to increase its market-share of total enrollments--
+there are no potential Wal-Marts in the non-profit sector of higher
+education. Indeed, few traditional institutions today seek to expand.
+Rather, the competition is for quality, prestige, and selectivity, and
+the resulting status competition conveys a clear advantage to those
+institutions at the top of the pecking order. Wealthy parents then seek
+to enroll their offspring in the most prestigious institutions, and
+those colleges and universities further down in the pack strive to
+enhance their own standing in this ranking (dutifully reported in U.S.
+News & World Report) by spending more on their own programs. Increased
+competition, therefore, is not the solution to rising prices in this
+market, and workable regulatory mechanisms have eluded state and
+federal officials as well.
+ Ensuring affordability should be the highest priority of this
+committee, for if we fail to enhance educational opportunity we will
+all be the losers.
+ ______
+
+ [The Internet link to ``Measuring Up 2006'' follows:]
+
+http://measuringup.highereducation.org/--docs/2006/NationalReport--
+2006.pdf
+ ______
+
+ Chairman Hinojosa. We will now hear from Mr. Wiener.
+
+ STATEMENT OF ROSS WIENER, VICE PRESIDENT FOR PROGRAM AND
+ POLICY, EDUCATION TRUST
+
+ Mr. Wiener. Thank you, and good morning, Mr. Chairman and
+members of the subcommittee. Thanks very much for this
+opportunity to testify this morning.
+ I just want to briefly reinforce the context that has been
+established and then talk about a few suggestions as to how
+Congress could help to turn around some of these patterns.
+ For much of our history, as has been stated previously this
+morning, the United States has led the world in expanding
+access to higher education and the Congress has shown great
+leadership on this through the early establishment of land
+grant institutions, the GI Bill, the Higher Education Act and
+Pell Grants in 1972, and the return on our investment in
+expanding this access has been incalculable, contributing not
+only to our domestic prosperity but also to our global
+leadership.
+ But as much as we can take pride in this tradition, I think
+we have to acknowledge that we have broken faith with it and we
+today have a serious problem in access and success in higher
+education that has serious implications for our identity as a
+nation and our leadership around the world.
+ Today there is less social mobility in America than there
+was 20 years ago and less than in almost any other
+industrialized country. One important reason is that over the
+last 15 years there has been a massive shift in financial aid
+policy away from helping low-income students. This has two
+large effects.
+ One is that many college-qualified low-income students
+never become college students and so can't be college
+graduates. The situation right now is that our highest
+achieving low-income students only go to college at the same
+rate as our lowest achieving high-income students. But the
+effect on college going is not the only impact. Those students
+that do go to college go to college in ways that are much less
+likely to allow them to be successful. They have to go part
+time or they have to select to go to lower-cost institutions
+that themselves have less resources to support these students.
+ And while we should celebrate these students' resolve and
+we should be glad that these opportunities are available for
+them, we should not be forcing low-income students and
+disproportionate numbers of students of color to have to go in
+these routes where they are likely to be less successful.
+ The end result of this diminishing opportunity is
+unsustainable inequality along economic and racial lines. Just
+two points of context before moving on. One is that children
+from families in the top income quartile in this country have a
+75 percent chance of having a baccalaureate degree by the time
+they are 24. Children from the bottom economic quartile, the
+bottom 25 percent, have only a 9 percent chance of graduating
+from college by the time they are 24. And these issues play out
+along racial and ethnic lines as well with white students
+getting degrees at about twice the rate of African American
+students and at about three-times the rate of Hispanic
+students.
+ Hispanic Americans are the largest minority group in this
+country, the fastest growing, and yet they have barely a one in
+10 chance of having a baccalaureate degree by the time they are
+29 years old. This has serious implications for the country and
+we need to address this problem. And this shouldn't be seen as
+charity for these groups or something we do out of compassion
+for them.
+ The fact is, America needs more college-educated workers.
+When you look at data generated by the Bureau of Labor and
+Statistics and the Census Bureau and you project this out, we
+are at risk of being short 3 million baccalaureate degrees in
+the workforce, not in 20 years or in 30 years but in 5 years,
+by 2012.
+ So let me talk about several ways that Congress could
+address these issues in the Higher Education Act. One is to
+restore the buying power of Pell Grants. Those used to cover
+\3/4\ of the cost of attending college. They now cover less
+than \1/3\. And this should be the first priority, as has been
+mentioned earlier.
+ Another is to eliminate the FAFSA. The way that low-income
+students have to apply for financial aid right now is
+notoriously burdensome and confusing. The federal government
+already has all the information it needs. Just like the federal
+government produces estimates of benefits that citizens are
+likely to get under the Social Security program, they should do
+the same for low-income families and proactively inform them of
+the aid they are likely to get.
+ Congress should consolidate multiple programs that are
+intended to benefit low-income students. For example, the SEOG
+program is located right now in proportionately wealthier
+institutions that serve fewer low-income students, and that
+money could be better put into Pell Grants.
+ Congress should make loan repayment schedules contingent on
+family income so that college graduates who are in fields where
+the income is less, there is a reasonable amount that they can
+pay. If this were done, it would also make more loan students
+more comfortable taking on the debt that is reasonable for them
+to take on to go to college.
+ And, finally, Congress should continue to pursue reform in
+the subsidized student loan market and use competition to keep
+the subsidies down and, again, repurpose some of those
+resources to help low-income students afford college.
+ Thank you.
+ [The statement of Mr. Wiener follows:]
+
+ Prepared Statement of Ross Wiener, Vice President for Program and
+ Policy, Education Trust
+
+ Mr. Chairman and Members of the Subcommittee, thank you for this
+opportunity to provide testimony on this important issue. The Education
+Trust is a national, non-partisan, non-profit organization dedicated to
+improving the education of low-income students and students of color,
+pre-kindergarten through college.
+ This morning, I want to describe the profound--and profoundly
+disturbing--shift in financial aid policy that has put college out of
+reach for far too many Americans. I also want to point to some concrete
+actions that Congress should take to address problems related to both
+access and success in higher education.
+Background
+ For much of our history, the United States led the world in
+expanding access to higher education. From the establishment of land
+grants institutions, to the G.I. Bill, through the Higher Education Act
+of 1965, and the creation of Pell Grants in 1972, the United States
+Congress has shown true leadership on this issue. The return on our
+investment in expanding access to higher education has been
+incalculable, contributing both to domestic prosperity and
+international leadership.
+ As much we can take pride in this tradition, we also must recognize
+that we have broken faith with it. Our recent history is one of
+shrinking opportunity and growing income gaps. One important reason is
+that, over the last fifteen years, there has been a massive shift in
+financial aid policy away from helping low-income students. Today,
+there is less social mobility in America than there was twenty years
+ago, and less than in almost any other industrialized country.
+ While the focus of this hearing is on the financial barriers to
+getting a college education, I do not intend to minimize the other
+issues that need to be addressed to improve the education of low-income
+students and students of color. In particular, we at the Education
+Trust are acutely aware that inadequate preparation in K-12 means that
+far too many low-income students and students of color struggle in
+college and the workplace. Moreover, the higher education community has
+not stepped up appropriately to address low and stagnant graduation
+rates of the students who do make it to college.
+ The large, unmet need faced by prospective students from low-income
+families, and the fact that the amount of financial aid a student will
+receive remains uncertain until so late in the process, have
+implications across all these problems. For instance, many potential
+college graduates never even become college students. Indeed, only 50%
+percent of all ``college-qualified'' students from low-income families
+enter a four-year college, compared to over 80% percent of similarly
+qualified students from high-income families. The sad reality is that
+America's highest achieving low-income high school graduates go to
+college at the same rate as our lowest achieving high-income high
+school graduates.
+ But that's not the only effect. Other low-income students do attend
+college, but do so in ways that are far less likely to lead to a
+degree. Many are intimidated by the financial aid and application
+process but are enticed to enroll in fly-by-night proprietary schools
+where they take on debt but do not acquire skills that will help them
+pay off that debt. Others are forced to go to college part time, and/or
+to start in a community college with the aspiration to transfer and
+earn a B.A., but never gather the momentum to reach the baccalaureate
+level. The tragic irony is that many of these students do not end up
+with a degree, but do end up with debilitating debt burdens that leave
+them worse off than before. So while we should ensure that all kinds of
+options are available to students, we should not pretend that they are
+all equally likely to ensure students' success, and we should not force
+low-income and minority students down paths where success is rare.
+ The result is inequality that is bad not just for low-income
+students and students of color, but bad for America. Children from
+families in the top quartile for family income have a 75% chance of
+getting a 4-year college degree by age 24; among children of families
+in the bottom income quartile, just 9% have graduated from college by
+24.
+ The gaps by race are also stark, with African-Americans earning
+bachelor's degrees by age 29 at nearly one half--and Latinos at just
+one-third--the rate of Whites. Moreover, instead of gradually getting
+better, most of these gaps are getting worse. For while college-going
+and degree rates have gone up for all groups, they have gone up faster
+for white students than for students of color, who were already under-
+represented. Since 1974, White students are up 19 points in college-
+going and up 10 in college completion. African American students are up
+20 points in college-going but only 5.5 in college completion. And
+Hispanic students are up only 11 points in college-going, and just 3
+points in college completion.
+ This inequality has grave implications for individuals and the
+country.
+ In today's economy, education--and especially higher education--
+provides the only certain route into the middle class and beyond.
+Unlike a generation ago, there are very few jobs where good health and
+a strong work ethic can ensure economic security. And the trend toward
+work that requires some college education is accelerating. Projections
+based on data from the Bureau of Labor Statistics indicate that, if
+current trends are not changed, then the U.S. will face a shortage of
+more than 3 million workers with bachelors degrees not in 20 or 30
+years, but in five years--by 2012.
+ Moreover, we need to recognize that the rest of the world is not
+standing still. Having learned from our example, other countries have
+rapidly expanded participation and success in higher education. While
+we once led the world in college graduates in the adult workforce, we
+have slipped to fourth. Most disconcerting, the United States is one of
+only two industrialized nations where older workers are more likely to
+have a college degree than younger workers.
+ These trends hold serious social and economic threats. We are in
+danger of creating a permanent underclass. And we are in danger of
+losing our leadership in the global economy, which would have other
+negative implications.
+ The reality is that America needs more college graduates. To
+accomplish this, we must do a better job of educating low-income
+students and students of color, who have been disproportionately left
+out in the past. Given the especially dramatic growth in the number of
+Hispanic Americans, and the distressingly low numbers of young people
+from this community who are earning college degrees, their plight
+merits particular attention. When the largest minority group in the
+country has barely one in ten students getting through college with a
+degree, the nation must act. We cannot continue our economic growth, we
+cannot maintain our high standards of living, and we cannot create the
+nation we all want to live in, without getting more students of color
+and low-income students in and through college with a degree.
+ Congress can show important leadership by aligning federal policy
+with the imperative to improve college outcomes, especially among low-
+income and minority students. In addition to substantively improving
+federal policy, the actions described below would allow Congress to
+enlist states, colleges and universities, as well as the American
+people, in a broader conversation about how to improve higher
+education.
+Financial aid: A promise abandoned
+ The federal government has always taken a central role in ensuring
+equality of opportunity, and federal leadership is needed again if we
+are to return this country to a path of truly expanding college access.
+For one, the federal government is the biggest player in student
+financial assistance. In 2004-5, the federal budget for student aid was
+$90 billion, accounting for approximately three-quarters of all
+expenditures on student aid. Approximately $18.6 billion of this was
+allocated for grant aid, $68.6 billion for underwriting student loans,
+and $6 billion in tax credits and deductions. How this financial aid
+money currently is allocated is confusing and inadequate.
+ Below are some concrete actions Congress could take to improve the
+chance of success for low-income and minority students in higher
+education:
+ Restore the buying power of Pell Grants
+ Historically, the federal government's principle vehicle for
+providing access to low-income students has been the Pell Grant.
+Created in 1972, the Pell Grant program has enabled millions of
+students from low-income families to attend two- and four-year
+colleges. But investments in this program, while up, have not kept pace
+with rising demand for college, or with the rising price of higher
+education. In 1975, the maximum Pell Grant covered approximately 84
+percent of the cost of attending a public four-year college. Today, it
+covers only 36 percent, effectively blocking access for thousands of
+aspiring college students from low-income families.1 In 1974, the
+majority of Pell recipients (62%) attended four-year colleges and
+universities, but that is no longer true--as of 2004, the majority of
+Pell recipients (54%) attend two-year colleges. Similar enrollment
+trends exist among African-American and Latino students who
+disproportionately attend two-year and proprietary colleges from which
+they have significantly lower chances of earning a degree.
+ The diminution of Pell's buying power might, of course, be
+understandable given other pressures on the federal budget. But, in
+fact, federal expenditures on non need-based student aid have grown
+exponentially faster over the past decade than expenditures on need-
+based aid. Indeed, of current federal expenditures on student aid, 52
+percent--or more than $45 billion--is not based on need. Much of the
+growth has been in tax deductions and credits, which disproportionately
+go to upper-income families and do nothing at all to assist the lowest
+income students and families. Before other worthy goals are pursued,
+federal financial aid policy should ensure that low-income students are
+able to attend college by increasing Pell Grants.
+ Eliminate the FAFSA
+ In addition to the re-allocation of aid away from low-income
+students, the process for applying for federal financial aid also is
+fraught with problems. The complexity, intrusiveness, and sheer burden
+of the FAFSA (Free Application for Federal Student Aid) manifests
+patent indifference as to whether low-income students get the aid to
+which they are entitled. The FAFSA is notoriously confusing and has
+been characterized by scholars as more complicated than filing an
+income tax return. Indeed, taking out a mortgage to buy a house is
+significantly simpler and demands less financial acumen than completing
+the FAFSA.
+ If we are serious about ensuring that low-income students know
+about and receive their financial aid, this process can and should be
+streamlined. The government should proactively calculate estimated
+grant awards based on income tax returns and other publicly held
+records that already are in the government's possession. To help these
+students get an image of themselves as college students, the federal
+government should send an estimate of expected federal tuition grant
+aid to each low-income family with school-age children. The Social
+Security Administration routinely provides workers with estimated
+benefits and there is no good reason not to do this with federal grant
+aid.
+ That the FAFSA persists in its current form makes a mockery of our
+commitment to helping low-income students go to college. It is not an
+exaggeration to say that the FAFSA evidences contempt for low-income
+students' college-going aspirations. If this Congress does nothing else
+to align federal policy with the goal of increasing low-income
+participation in higher education, it should replace the arduous FAFSA
+with a proactive notification of projected grant aid to prospective
+college students from low-income families.
+ Consolidate programs intended to benefit low-income
+ students
+ The overriding focus of federal financial aid policy should be to
+make college accessible to those who otherwise could not afford it, and
+to make the financial aid process as simple and straightforward as
+possible. The myriad programs that ostensibly exist to help low-income
+students should be combined, so that the money goes to the right
+students--and students can know up-front the amount of aid to which
+they are entitled. Some of the many programs that exist now benefit
+institutions more than low-income students, and dilute the federal
+government's ability to target money to truly needy students.
+ The SEOG program is a perfect example: SEOG allocations go
+disproportionately to wealthier institutions which serve
+disproportionately fewer financially needy students. This money would
+be better spent on increasing Pell Grants.
+ Make loan repayment schedules contingent on family income
+ As students are expected to assume more and more debt to finance
+their college education, it is incumbent upon the federal government to
+provide some insurance against individual financial ruin. Borrowing to
+help for college is a good investment. Most students will go on to earn
+more as a result, and it is fair and reasonable to expect them to pay
+off their loan obligations. But for those borrowers who confront
+prolonged debt-to-income disparities--and this includes not just drop-
+outs, but also those who choose socially important, but lower-paying
+professions such as teaching--the federal government should index loan
+repayments on a sliding scale related to ability to pay. If low-income
+students were made aware of this support early in the process, they
+would be more likely to take on reasonable debt and enroll in college
+in the first place. The Project on Student Debt has proposed a
+reasonable plan to make repayment limits contingent on family income.
+This plan is modest, fair, and urgently needed.
+ Ensure that tax-exempt institutions educate low- and
+ middle-income students
+ Institutions of higher education are huge non-profit corporations
+with tax-exempt status. It is not unreasonable to expect them to
+participate in the country's commitment to expanding higher education
+among those in the bottom half of the income distribution. No
+institution should be forced to educate more low- and middle-income
+students. But if they do not include a reasonable share of these
+students in their programs, then their generous government subsidy
+should be repurposed to ensure these students have access to
+postsecondary options somewhere else. At a minimum, each institution
+that wants to maintain its tax-exempt status should make a commitment
+to educating low-income students. It is a vital public interest and not
+unreasonable to expect non-profit colleges to draw \1/4\ of their
+students from the bottom \1/2\ of the income distribution.
+ Engage states and institutions in improving access and
+ success
+ Beyond its proportional role, it also is clear that federal policy
+sets the context for what happens with state and institutional aid
+dollars; as the federal government has abandoned low-income college
+aspirants, so, too, have the other players in financial aid. Ten years
+ago, grants to students without demonstrated financial need represented
+14 percent of state grant expenditures. Today that fraction has nearly
+doubled to 27 percent2. I want to be clear that it is not a bad thing
+for government to help middle and upper-middle income families pay for
+college. But the first priority of financial aid policy should return
+to its historic purpose of helping students who cannot afford to attend
+college without financial assistance.
+ Institutions of higher education have also abandoned low-income
+access. In the absence of any accountability or recognition for
+expanding access, these institutions have increasingly pursued higher
+status in the private college ranking guides by using their
+discretionary financial aid dollars to ``buy'' students who will
+improve their rankings. A recent report from the Education Trust,
+Promised Abandoned, documents how campus-based aid has also skewed away
+from low-income students in recent years.
+ Congress cannot solve these problems alone, but Congress is
+uniquely positioned to stimulate an important new dialogue on how
+quality in higher education is defined. Current metrics for quality and
+recognition bestow status on colleges that only admit students who will
+succeed no matter where they go. Instead, we need to honor and support
+institutions that are helping increasing numbers of students who face
+far more difficult challenges to obtain the degrees that will help them
+advance personally and contribute to the social, civic and economic
+well-being of the nation. This larger issue deserves to be the focus of
+more Congressional deliberation. I will mention just two discreet ways
+in which Congress could spur progress:
+ Improve data collection systems so that both policymakers
+and the public have easy access to honest and accurate information
+about student outcomes. Congress should immediately add critical
+information to the IPEDS data collection process, including the
+addition of ``Pell Grant'' status to the Graduation Rate Survey, so
+that the success of low-income students can be measured and reported;
+tracking and reporting year-to-year retention rates disaggregated by
+Pell status and race/ethnicity; and mandating and verifying the
+reporting (now voluntary) of cohort transfer rates. At the same time,
+Congress should facilitate development of unit-record systems that will
+provide more accurate accounting of what happens to students in higher
+education, while protecting privacy and confidentiality.
+ Partner with states to encourage more need-based aid and
+better cost containment. Congress should explore ways to partner with
+states that are willing to commit to improving access and graduation
+rates for low-income students and students of color.
+Conclusion
+ Thirty years ago, President Lyndon Baines Johnson and the 89th
+Congress acted to make the American Dream a reality when they passed
+the Higher Education Act of 1965. When he signed this historic
+legislation, President Johnson recalled the experiences in his own
+life--first as a needy college student himself, and subsequently as a
+teacher in a school serving Mexican-American students--that prompted
+him to work so hard to win the enactment of this ground-breaking law:
+ I shall never forget the faces of the boys and the girls in that
+little Welhausen Mexican School, and I remember even yet the pain of
+realizing and knowing then that college was closed to practically every
+one of those children because they were too poor.
+ And I think it was then that I made up my mind that this Nation
+could never rest while the door to knowledge remained closed to any
+American.
+ Later in his remarks, he called on all of us--``the teachers and
+the citizens and the educational leaders of tomorrow:''
+ [W]hen you look into the faces of your students and your children
+and your grandchildren, tell them that you were there when it began.
+Tell them that a promise has been made to them. Tell them that the
+leadership of your country believes it is the obligation of your Nation
+to provide and permit and assist every child born in these borders to
+receive all the education that he can take.
+ ``The rest,'' he said, ``is up to you.''
+ Clearly, in a whole host of ways, we've strayed from that central
+commitment and broken that all-important promise. And the consequences
+have been grave. Many young people no longer believe that if they work
+hard, college is a real possibility for them. We can take issue with
+their logic. We can argue that college costs less than they think, that
+there is more aid money than they realize or that even large loan debts
+make long-term sense. But we cannot contest the facts: pathetically few
+low-income students, including the highest achieving, are entering and
+completing college.
+ Though it may be too late for some students, it is not too late for
+others. And it is not yet too late for our country. We can change these
+patterns if we so choose.
+ ______
+
+ Chairman Hinojosa. We will now hear from Mr. Merisotis.
+
+ STATEMENT OF JAMES MERISOTIS, PRESIDENT, INSTITUTE FOR HIGHER
+ EDUCATION POLICY
+
+ Mr. Merisotis. Chairman Hinojosa, Ranking Member Keller,
+thank you very much for this opportunity.
+ Improving access to higher education continues to be one of
+the most important contributions that the federal government
+can make to our national well being. Increasing educational
+opportunities for all Americans results in tremendous public,
+private social and economic benefits.
+ Unfortunately, low-income, minority and other groups face
+unacceptably large gaps in their ability to get into and
+succeed in college due to a variety of financial, informational
+and academic factors. Supporting programs that have a track
+record of success is the best way to achieve an accessible and
+accountable system of higher education.
+ At the same time, such an investment must be done with a
+clear focus on accountability to the students who benefit from
+the programs. With these dual goals of investing in those who
+might not otherwise go to college and ensuring accountability
+to the students we serve, I would like to offer the following
+options for your consideration.
+ First, I urge you to invest in need-based grant aid as the
+best way to promote college access. The declining purchasing
+power of federal aid indeed continues to be a critical barrier
+to access to higher education. I urge Congress to consider an
+increase in the maximum Pell Grant to at least $6,000. this
+would pay for slightly less than \1/2\ of the price of
+attendance at a typical public 4-year college.
+ At the same time, while I don't support efforts to pay for
+Pell Grant increases through cuts in other programs, in effect
+taking money away from one group of needy students to give it
+to another, I do believe that greater efficiency can be
+achieved. For example, an increase in the minimum Pell Grant
+would net at least some cost savings.
+ Second, encourage a broad partnership in college financing
+through private sector aid to students. The private sector is a
+largely unrecognized partner in college financing. While
+private scholarship aid never can nor should be seen as an
+alternative to federal aid, the more than $3 billion annually
+awarded through private scholarships must be recognized and
+expanded. I encourage you to explore ways that the Title 4
+programs can be used to stimulate an even greater response from
+local communities, corporations and other private sector
+donors.
+ Private loans present a very different set of opportunities
+and challenges. Given the predicted growth in private loan
+borrowing, it is important to charter reasoned debate about
+their potential benefits and risks. I support the overall goals
+of transparency and consumer protection contained in the
+Student Loan Sunshine Act.
+ Given the increasing borrowing demands of students, I don't
+believe private borrowing should be discouraged, but I do
+believe that students should be informed of their federal loan
+eligibility prior to taking out a private loan.
+ Third, I encourage you to strongly support locally-managed
+program, such as TRIO and GEAR UP, as essential components of
+our national access strategies. For many of the nation's most
+underserved populations, financial aid is necessary but not
+sufficient to encourage college access and success. TRIO and
+other programs provide tutoring, mentoring and counseling and
+promote the successful transition of students into and through
+college.
+ Fourth, strengthen the capacities of minority-serving
+institutions to educate the nation's emerging majority
+population. Tribal colleges and universities, Hispanic-serving
+institutions and predominantly black colleges and universities
+and other minority-serving institutions represent some of the
+nation's most important but underserved education resources.
+These institutions provide opportunities to more than 2.3
+million students, the majority of whom are low-income and
+educationally disadvantaged.
+ In the 110th Congress, I urge you to create a well-trained,
+flexible workforce that will meet our economic and social
+challenges head on through investment in minority-serving
+institutions.
+ Fifth, embrace investment in immigrants as a key component
+of higher education access and success. Many immigrants face
+significant barriers to higher education. Developing a broader
+and more efficient path to citizenship and offering affordable
+and accessible programs to help immigrants learn English would
+open the doors to college for many immigrants. Policies that
+explicitly impede the college opportunities of legal
+immigrants, such as in the academic competitiveness grant and
+smart grant programs, which exclude legal permanent residents,
+must be reversed.
+ Finally, I urge you to support a system of accountability
+that focuses on the complex life circumstances of today's
+college student. Higher education institutions must demonstrate
+that they are effective stewards of the funds that have been
+invested in them by the federal government. Accountability
+begins with an efficient system of information that can be
+readily collected, easily understood and meaningfully applied.
+I therefore support the pilot development of a national system
+of student level data, ideally one that harmonizes the more
+than 40 state systems already in place.
+ Investing in those who might not otherwise go to college
+and assuring accountability to the students who are served are
+not just nice goals to pursue as part of a federal education
+policy agenda. They are necessary components of a national
+workforce investment strategy that can lead to greater
+prosperity, security and harmony for all Americans.
+ Thank you.
+ [The statement of Mr. Merisotis follows:]
+
+Prepared Statement of James Merisotis, President, Institute for Higher
+ Education Policy
+
+ Mr. Chairman and Members of the Subcommittee: Thank you for this
+opportunity to appear before the Subcommittee regarding how students
+access and finance a college education.
+ In the 110th Congress, you face the ongoing challenge of promoting
+access to higher education for all Americans who have the interest and
+ability to attend college. Improving access to higher education
+continues to be one of the most important contributions that the
+Federal government can make to our national well-being. The simple fact
+remains that increasing educational opportunities for all Americans
+results in tremendous public, private, social, and economic benefits.
+We know, for example, that workers who have attended college tend to
+have low rates of unemployment, and analyses of job growth and employer
+demands overwhelmingly suggest that future job growth will be
+concentrated in fields that require a college education. We also know
+that the higher earnings for college graduates results in more revenue
+for government coffers through increased tax collections. Social
+benefits of postsecondary education also accrue to individuals and to
+the public. For instance, people with more education tend to have
+greater health and life expectancy. Public benefits from higher
+education include reduced crime rates, increased civic participation,
+and more charitable giving and volunteerism. In short, by investing in
+our fellow Americans who might not otherwise go to college, we are
+investing in our collective future and well-being.
+ Unfortunately, not all Americans are able to benefit from higher
+education due to a variety of financial, informational, and academic
+barriers. According to data from the U.S. Census Bureau, while 75% of
+high-income students enter college today, only 31% of low-income
+students do. Of traditional age students who go to college after
+graduating from high school, college enrollment rates are about 10
+percentage points higher for whites than for African Americans,
+Hispanics, and Native Americans. These gaps are even wider for adult
+and so-called non-traditional students.
+ So if investment in higher education matters, then maintaining and
+expanding that investment is critical. I recognize that the nation
+faces an uncertain economic future, one that places constraints on
+policy discussions such as these. But I hope you will not lose sight of
+the long-term effects that your investments will have on the nation.
+The programs established and defined within the Higher Education Act
+(HEA) are now more necessary than ever. Supporting these programs is
+the best way to achieve an accessible and accountable system of higher
+education for all Americans.
+ At the same time, such an investment must be done with a clear
+focus on accountability to the students who benefit from the programs.
+Efficiency in the delivery and administration of programs that promote
+access and success must be maintained at all levels. Supporting access
+to quality programs, and to institutions that serve the nation's most
+underserved populations, should be a hallmark of these investments.
+ With the dual goals of 1) investing in those who might not
+otherwise go to college, and 2) ensuring accountability to the students
+we serve, I would like to offer a limited set of concrete programmatic
+options for your consideration.
+Invest in need-based grant aid as the best and most important way to
+ promote access to postsecondary education
+ In the early 1990s, a bipartisan Federal commission called the
+National Commission on Responsibilities for Financing Postsecondary
+Education (for which I served as Executive Director) issued a widely-
+circulated report called Making College Affordable Again. The
+legislation creating the commission, authored by Senator James Jeffords
+of Vermont in the late 1980s, noted that the purchasing power of aid
+had been rapidly declining through the decade of the 1980s, leading to
+increasing concerns about access to postsecondary education. In
+commenting on the legislation, Senator Jeffords noted, ``Without
+affordable postsecondary education, without national support for
+meaningful access for able students to take advantage of higher
+education opportunities, we will not be able to accomplish any of the
+objectives that we strive for as a nation and a leader of nations.''
+The final report of the commission, issued in 1993, recommended several
+important improvements to Federal student aid, many of which have
+subsequently been enacted. But the Commission's major recommendation--
+to assure access to higher education for all qualified students through
+the Student's Total Education Package (STEP), a mechanism that ties
+Federal aid to a sliding subsidy scale based on financial need--remains
+unfulfilled. Such a mechanism would go a long way toward emphasizing
+the importance of grant aid for the neediest students while also
+acknowledging the important concerns about affordability for middle
+income students and families.
+ Research indicates that investment in need-based grant aid is the
+best and most important contribution that the Federal government can
+make to keeping the dream of a college education a reality for all
+Americans. The declining purchasing power of Federal aid continues to
+be a critical barrier to access to higher education. Even taking into
+account the funding increases of the last few years, the maximum Pell
+Grant today pays for only about one-third of the average price of
+attendance at a public four-year institution compared to more than two-
+thirds in 1980. Significantly increased support for the Pell Grant
+program therefore should be a centerpiece of efforts to enhance the
+programs and policies in the Higher Education Act. I am pleased that
+both the Congress and the President have recently signaled their strong
+support for a long-overdue increase in the maximum Pell Grant. I urge
+Congress to consider an increase in the maximum Pell Grant to at least
+$6,000. This would pay for slightly less than one-half of the price of
+attendance at a typical four-year public college for the poorest
+students--still well below historic levels, but an important down
+payment for the future.
+ At the same time, while I do not support efforts to pay for Pell
+Grant increases through cuts in other programs--in effect, taking money
+from one group of needy students to give it to another group of needy
+students--I do believe that greater efficiency could be achieved in
+existing grant programs. For example, an increase in the minimum Pell
+Grant would net at least some cost savings; it may be possible to do so
+by indexing the minimum Pell Grant to increases in the maximum Pell. It
+is also worth examining the issue of the allocation formula for campus-
+based aid such as Supplemental Education Opportunity Grants, ensuring
+that such aid is targeted to those students and institutions with the
+least capacity to pay the costs on their own.
+Encourage a broad partnership in college financing that promotes
+ private sector investment in aid to students
+ The dual goals of investing in students who might not otherwise
+attend college and ensuring accountability to students can be achieved
+in part through a partnership that encourages private sector aid to
+students. Government-sponsored grant and scholarship aid from both
+Federal and state sources today totals more than $25 billion per year,
+with a similar amount awarded directly by institutions via their own
+grant funds. An astonishing total of more than $70 billion is awarded
+to students through government guaranteed student loans. But the
+private sector is an important and largely unrecognized partner in the
+college financing equation. The private sector's commitment and support
+for helping students go to college--and succeed when they get there--
+should be better recognized and understood as a valuable complement to
+Federal aid.
+ For example, private scholarship support, sometimes thought of as
+marginal or modest in its impact, is growing in importance and stature.
+A 2004 IHEP study found that at least $3 billion per year is awarded
+through private scholarship programs, and employer-provided education
+assistance to employees and their dependents totals several billions
+more. Private scholarship aid has long made a difference in the lives
+of students hoping to go to college. In fact, at about the same time
+that the National Defense Education Act of 1958 heralded the beginning
+of a series of governmental programs that have allowed millions of
+financially needy students to attend college, private scholarship
+assistance also became more organized and related specifically to
+meeting the country's educational, economic, and social needs. An
+optometrist from Fall River, Massachusetts named Irving Fradkin
+organized a community-based scholarship program in the late 1950s to
+help academically able and financially needy students go to college.
+The Citizens' Scholarship Foundation of America slowly expanded in the
+New England region, and eventually across the country, creating local
+scholarship foundations that contribute resources to assist students
+with college costs. In 2006, the national organization now known as
+Scholarship America--where I currently have the privilege of serving as
+the Chair of the Board of Directors--distributed over $180 million in
+scholarships to more than 120,000 students through its diverse array of
+community-based, volunteer-supported programs.
+ Organizations like Scholarship America work in a variety of ways
+with colleges and universities to offer numerous scholarships and
+grants that include need-based and non-need-based forms of financial
+assistance to students. While private scholarship aid never will--nor
+should--be seen as an alternative to Federal financial assistance, it
+must be recognized as one of the key partners working to support
+students at the Federal, state, institutional, and private levels. I
+therefore would encourage you to examine ways in which the HEA can be
+used to stimulate even greater response from local communities,
+corporations, foundations, organizations, and individual donors in the
+private sector.
+ One specific way to do this is via the Leveraging Educational
+Assistance Partnership (LEAP) program, which encourages state
+governments to provide state tax dollars to assist students in their
+states to gain the critical benefits of postsecondary education. This
+program could be enhanced to leverage a much greater amount of aid for
+students if it were used to stimulate not just state dollars for
+student aid, but significantly increased private sector aid in each
+state as well. For example, in the state of Washington the legislature
+has provided small challenge grants to communities that have encouraged
+the creation of over 100 new volunteer-supported, community-based
+scholarship chapters. The current LEAP legislation could be modified to
+reward those states where significant increases in student aid are
+produced by partnerships with local community-based scholarship
+providers.
+ The other area of significant private sector involvement in
+financial aid is through private loans. A widely circulated recent IHEP
+study on private loans found that they are becoming an essential part
+of financing postsecondary education in today's market of rising
+tuition costs and fees. Given the fact that experts are predicting
+private lending will continue to grow, it is important to chart a
+reasoned debate about private loans and their potential benefits and
+risks for students in the future. Targeted outreach to students to
+ensure that they are receiving comprehensive information about the pros
+and cons of private loan borrowing is important. I support the overall
+goals of transparency and consumer protection contained in the current
+draft of the Student Loan Sunshine Act. While I don't believe private
+borrowing should be discouraged--given the increasing borrowing needs
+of students--I do believe that efforts must be made to inform students
+of their Federal loan eligibility prior to taking out a private loan.
+This would protect the interests of student consumers while ensuring
+that alternatives are available if Federal loans are not a reasonable
+option for certain students.
+Decisively and unequivocally support locally-managed programs such as
+ Upward Bound, Talent Search, and GEAR UP as essential
+ components of our national access strategy
+ For many of the nation's most economically and educationally
+underserved populations, financial assistance is a necessary but not
+sufficient strategy for ensuring access to, and success in, higher
+education. The Federal government recognized this more than 40 years
+ago with the establishment of the Upward Bound program, and continues
+that tradition through the TRIO programs and their more recent
+complements such as GEAR UP. These critical programs serve as key
+vehicles for improving the higher education prospects of low-income,
+first-generation, and disabled students. The programs provide a
+continuum of services from pre-college to pre-graduate level study for
+the nation's low-income, first-generation, and disabled students. In FY
+2006, the $828 million in funding for TRIO programs supported more than
+850,000 students in over 2,700 distinct TRIO programs. Yet despite this
+support, less than 10 percent of the eligible populations are served by
+TRIO programs.
+ There are a total of seven TRIO programs. The pre-college programs
+include Talent Search, Upward Bound, Upward Bound Math Science, and
+Veterans Upward Bound. These programs provide counseling, information,
+skills development, college planning, and an array of other services
+that help students get ready for college. At the college level, Student
+Support Services, the Ronald E. McNair Post-Baccalaureate Achievement
+Program, and Educational Opportunity Centers programs provide tutoring,
+counseling, and supplemental instruction to help students stay in
+college through the completion of a degree (or transfer to a different
+institution) and pursue graduate-level education.
+ These programs are key pillars in the overall effort to promote the
+successful transition of students into and through college. Yet in
+recent years the Upward Bound, Talent Search, and GEAR UP programs have
+inexplicably been proposed for elimination as part of the President's
+budget. Given their importance to the populations most in need of
+college access--nearly one-third of all low-income high school
+graduates who actually enroll in college have been served by a TRIO
+program--we must not only be categorically opposed to the elimination
+of these programs, but we should also support significant funding
+increases in each of these programs and not allow the diversion of
+funding from these proven programs to support other education
+initiatives.
+Strengthen the capacities of minority-serving institutions (MSIs) to
+ educate the nation's emerging majority populations
+ No group of institutions does more to promote the dual goals of
+investing in students who might not otherwise go to college and
+ensuring accountability to those students than Minority-Serving
+Institutions (MSIs). Tribal Colleges and Universities (TCUs), Hispanic-
+Serving Institutions (HSIs), and Historically Black Colleges and
+Universities (HBCUs) and other predominantly Black institutions, which
+collectively are referred to as MSIs, represent some of the nation's
+most important but underserved postsecondary education resources.
+Combined, more than 2.3 million students are educated by these
+institutions, or about one-third of all students of color. These
+numbers have been growing rapidly in recent years as increasing numbers
+of students of color seek opportunities for a college education--in
+fact, enrollment at MSIs increased by 66 percent from 1995 to 2003,
+compared to only 20 percent at all postsecondary institutions.
+ Given demographic projections that show these communities are the
+fastest growing in the nation, it is clear that MSIs must be recognized
+as a leading voice for the underrepresented populations that are the
+main focus of most HEA programs. These populations find that MSIs offer
+a unique educational experience that fosters cultural values and
+traditions, promotes civic and community responsibility, and produces
+citizens who are attuned to the increasingly diverse country in which
+we live.
+ MSIs educate more students of color in many areas of national need
+than mainstream institutions. For example, more than one half of all
+teacher education degrees awarded to African Americans, Hispanics, and
+American Indians in U.S. higher education are conferred by MSIs. These
+institutions also make major contributions to our nation's workforce in
+the areas of Science, Technology, Engineering, and Mathematics (STEM)
+despite significantly lower levels of financial support than other
+institutions.
+ Most MSIs provide postsecondary education opportunities
+specifically tailored to low-income, educationally disadvantaged
+students. Forty-four percent of students enrolled at MSIs in 2004 were
+from families in the lowest income quartile, compared to 24 percent
+enrolled at all institutions. The fact that nearly half of all full-
+time students enrolled at MSIs receive Pell Grants compared to only 31
+percent of all students enrolled in higher education, and that for MSI
+students Pell awards tend to be 9 percent higher on average, is
+evidence of the high financial need of MSI students and the critical
+importance of grant aid to their educational endeavors.
+ In the 110th Congress, I urge you to see MSIs as a major avenue for
+advancing the nation's goals to create a well-trained, flexible
+workforce that will meet our economic and social challenges head-on.? I
+believe that several important steps could be taken to strengthen the
+capacity of MSIs. One is to expand both the scope and authorization
+levels of Titles III and V to ensure the continued development and
+growth of MSIs. Additional funding is required for MSIs to reach a
+level of financial stability that ensures the students enrolled at
+these institutions receive the same quality academic programs offered
+by majority institutions.
+ Congress also could take steps to encourage improvements in the
+infrastructure and application of information technology at MSIs. The
+MSI Digital and Wireless Technology Opportunity Act incorporates many
+of the key elements of investing in MSI technology capacity to benefit
+our future workforce. This legislation should be passed by Congress and
+its core principles applied to other policies and programs.
+ I also would urge you to consider the development of new graduate-
+level opportunities to enhance the capacity of MSIs to train future
+faculty and senior institutional leaders. The significant under-
+representation of minorities in many advanced degree fields is a major
+concern. The limited graduate-level opportunities available to MSI
+graduates and other minorities can be enhanced through policies that
+support: the infrastructure of post-baccalaureate education at MSIs--
+such as Ph.D. programs for schools currently offering Master's degrees;
+the recruitment and retention of minority professors; and the financial
+resources necessary to attain an advanced degree, including
+fellowships. It also would be useful to consider opportunities to
+expand support for international education at MSIs under Title VI,
+which historically have offered limited opportunities for the students
+served by MSIs.
+Embrace investment in immigrants as a key component of the higher
+ education access and success strategy
+ The United States has always been a nation of immigrants--a land of
+opportunity where newcomers can, through hard work and perseverance,
+achieve better lives for themselves and their families. But in today's
+world, realizing the American Dream is now almost impossible without at
+least some college education, and many immigrants face significant
+barriers to gaining access to and succeeding in higher education.
+Higher education for immigrants isn't an issue narrowly focused on the
+well-being of these immigrants as individuals but has major
+implications for the nation as whole. As the United States moves into
+the 21st century as part of a global economy in which postsecondary
+education is a key to economic competitiveness, it is imperative to
+develop policies at the Federal, state, local, and institutional levels
+to help immigrants gain access to and succeed in higher education.
+Without such policies, the nation may find itself with a workforce that
+does not have sufficient education to enable the United States to
+remain economically competitive.
+ Legal immigrants face an array of barriers to access to higher
+education. They lack access to accurate information about postsecondary
+education, face high work and family responsibilities, are challenged
+by limited English proficiency, and have significantly lower levels of
+academic preparation and achievement. Immigrants who come to the U.S.
+as adults confront even more substantial challenges in understanding
+and gaining access to higher education because they did not attend
+American primary and secondary schools.
+ Immigrants who actually enroll in higher education make up 12
+percent of undergraduate college students--a percentage that makes this
+group comparable in numbers to both Hispanic and Black students, and
+students with disabilities--yet receive relatively little attention in
+the public policy arena. Those who do enroll face additional barriers
+to persistence and degree completion. Immigrant students have higher
+unmet financial need than the average undergraduate and are more likely
+to enroll in community colleges or private for-profit institutions.
+ There is no one way to overcome the barriers immigrants face in
+gaining access to higher education in the United States. Most policies
+that address immigrant needs must to be localized, narrow in focus, and
+targeted toward specific immigrant groups to ensure that efforts reach
+those who most need assistance. Many of the barriers immigrants
+confront are similar to the ones generally faced by low-income and
+first-generation college students in the United States, and policies
+intended to benefit that population as a whole will directly help
+immigrants. These include adequate investment in higher education grant
+aid and support programs such as TRIO and increased efforts to broaden
+public awareness of the steps traditional-age students need to take to
+be prepared for college.
+ However, certain barriers have a greater impact on immigrants,
+regardless of their background and resources. The most obvious of these
+are limited English proficiency and difficulties in integrating into
+American society. Developing a broader and more efficient path to
+citizenship and offering accessible and affordable programs to help
+immigrants learn English and become familiar with their new country
+would open the doors to higher education for many immigrants. And
+policies that explicitly impede the postsecondary opportunities of
+legal immigrants must be reversed. An example of this is the provision
+in the new Academic Competitiveness Grant and SMART programs that
+limits these grants to U.S. citizens, thereby excluding eligible non-
+citizens including legal permanent residents. Such arbitrary
+limitations do a disservice to the nation by denying educational
+support to populations that have contributed immensely to the nation's
+economic and social prosperity over the course of many decades.
+Support a system of higher education accountability that focuses on the
+ complex life circumstances of today's college students
+ Higher education institutions must demonstrate that they are
+effective stewards of the funds that have been invested in them by the
+Federal government and that they are accountable specifically to the
+students they serve. Accountability begins with an efficient system of
+information that can be readily collected, easily understood, and
+meaningfully applied to determine effective stewardship. Unfortunately,
+the current system of data collection and dissemination is fragmented
+and often burdensome on institutions, with little of the information
+used in an effective way by consumers or policymakers.
+ The emergence of a national debate about data-driven strategies and
+accountability systems has been important, but has not done nearly
+enough to take into account the complex circumstances under which
+today's college students' lives are lived. The ideal scenario of a
+normally persisting, well-advised, highly motivated student runs
+headlong into the stark reality of life in America today: prior
+educational deficiencies, family and child responsibilities, financial
+pressures, language and cultural barriers, and poor information and
+support systems. Until we grapple with these deeply rooted concerns,
+the national dialogue about accountability will, in my view, continue
+to reinforce the existing biases and under investments that have left
+us with a system that is divided into haves and have-nots.
+ An important first step in moving ahead will be to develop a
+national system of student-level data. This idea, first promoted on a
+large scale by the National Center for Education Statistics, could
+involve either a national system or a network of harmonized state
+systems--a more likely scenario given that more than 40 states have
+some type of statewide student information system. Such a national
+network or system has detractors, chiefly those who believe that it
+could both erode the privacy concerns of students and increase burden
+on institutions, particularly in transitioning from current systems to
+a new one. However, I believe that such a system could be developed
+with limited risk to privacy. An important first step would be to
+properly test and pilot a national student unit record system, perhaps
+using a voluntary group of institutions. The burden of transitioning to
+a new system is a legitimate one, especially for smaller institutions.
+If such a system is implemented, it would be wise to provide limited
+financial support to institutions to help pay for the costs of system
+transition during a fixed period of time.
+ A privacy protected information system that collects, analyzes, and
+uses student level data could provide enormously useful information
+about student attendance patterns, the net price students pay (as
+opposed to the sticker price, which is paid by a minority of students
+at many institutions), and persistence and graduation rates. This
+information could be used to develop more effective strategies to
+assist students in negotiating the complex landscape of higher
+education.
+ A related development in the national dialogue about accountability
+in higher education has been the concern about students who transfer.
+Approximately 60 percent of all students attend more than one college
+or university as they work toward their undergraduate degrees. These
+students need adequate financial support, effective information, and an
+improved network of institutional agreements to ease the transfer
+process. But mechanisms to do all of these things largely exist. A new
+investment in need-based grant aid, for example, combined with
+simplified financial aid application and award procedures, would be a
+major benefit for transfer students. Effective information about
+transfer could largely be obtained through a national student level
+data system, augmented by private efforts to inform students about
+specific institutional agreements, course requirements, and the steps
+required to make a successful transition from one institution to
+another. An example of such a private effort is the National
+Articulation and Transfer Network (NATN), an initiative of the Alliance
+for Equity in Higher Education that IHEP has supported and helped to
+launch. NATN is a national research and policy development resource for
+both students and school administrators designed to increase the number
+of transfer students, including historically underserved student
+populations, who graduate with baccalaureate degrees. More information
+is available at www.natn.org.
+ On the issue of a possible Federal role in transfer, I do not see
+how a Federally mandated system of transfer could work, given the
+diversity of our higher education system--one of its hallmarks. Efforts
+to impose a Federal framework on inter-institutional academic practices
+are fraught with potential negative implications and would require a
+major new regulatory apparatus. This would not benefit students in any
+way. The Federal government's best contribution to the complex field of
+transfer and articulation would be to encourage these types of private
+sector efforts and support partnerships that involve inter-state
+agreements and protocols.
+ Investing in those who might not otherwise go to college, and
+ensuring accountability to the students we serve, are not just nice
+goals to pursue as part of a Federal education policy agenda. They are
+necessary components of a national workforce investment strategy that
+can lead greater prosperity, security, and harmony for all Americans.
+We must continue to invest in postsecondary education as a critical
+component of our future knowledge and innovation infrastructure, much
+as we have invested in roads, bridges, and technology as components of
+our national transportation and information infrastructure. And we must
+be certain that our efforts to promote accountability are ultimately
+aimed at supporting the best interests of students--the backbone of our
+workforce and economic security.
+ Thank you again for this opportunity to appear before the
+Subcommittee on this important issue.
+ ______
+
+ Chairman Hinojosa. Thank you.
+ And we will now hear from Mr. Soifer.
+
+ STATEMENT OF DON SOIFER, EXECUTIVE VICE PRESIDENT, LEXINGTON
+ INSTITUTE
+
+ Mr. Soifer. Mr. Hinojosa, Mr. Teller, Mr. McKeon and
+members of the committee, I deeply appreciate the opportunity
+to participate in this historic hearing this morning.
+ As the cost and demand of higher education have risen year
+after year, traditional methods of financing have come under
+increasing stress. We recognize that a higher education is
+worth the investment. That is why we are here. But the ways to
+support it, policymakers must maintain, that each appropriation
+is in fact worth the investment.
+ College costs have risen at a rate generally double CPI and
+they have risen at a right often higher than health care costs.
+In terms of an average family's monthly income, the cost of
+higher education is typically 25-cents on the dollar in many
+cases. In short, federal student financial aid can no longer be
+counted on to keep pace with the rising cost of higher
+education in the United States.
+ We are currently asking our higher education system to
+support the cost for remedial education for high school
+students who enter. The Colorado Commission analyzed that the
+cost of providing remedial education to students in its system
+was $11 million in 2004. Research by the Alabama policy
+institute found the total spending for public and private
+higher ed institutions totaled some $84 million and had reason
+to believe that that also was understated.
+ While state funding for higher education remains flat,
+institutions often pass that increased burden on to students. I
+think it is worth noting that should student loan providers
+have their profit margins cut in half, that they could probably
+be expected to do the same thing.
+ In the face of tighter budgets, many institutions are
+finding ways to reduce their costs. A study by the Missouri
+State Auditor found that they typically filled job vacancies
+slower, freeze salaries, defer purchases and generally find
+ways to lower their operating expenses across the board. But we
+must still ask, in this changing environment, if our delivery
+systems still make the most sense.
+ With fewer increases in state appropriations for higher
+education, some states have evolved their systems for
+delivering student aid. As the chairman of the Higher Ed
+Commission in the Arizona State House of Representatives
+described the goal of their new grant system as a student-
+centered system of funding where access, affordability and
+quality drive good public policy.
+ The president of the Chicago Federal Reserve observed last
+year that universities must be more transparent in their
+operations. I ask if it can truly be considered a slap on the
+wrist to ask a higher ed institution that has increased its
+cost at twice the rate of inflation to provide an explanatory
+statement and to provide a strategic plan to hold down future
+costs. There are certainly strong benefits to such transparency
+in operations.
+ In light of the costs being incurred by our higher ed
+institutions for remediating students, we have to look to our
+public schools and ask if their education delivery methods are
+the ones best suited for accomplishing the challenges before
+them. Can charter schools, for instance, better prepare
+students to enter higher education? Research shows that this is
+often the case. And if so, how can there be more of them?
+ It is also critical that we continue to monitor whether our
+local public schools are effectively closing learning gaps
+between all subgroups of students. How is our public education
+system helping children in perpetually under performing schools
+to get this preparation as well? I respectfully request that
+the committee consider these questions and trends as you
+continue your valuable work in creating the policies that make
+American students be able to reach and pay for a higher
+education.
+ Thank you, Mr. Chairman.
+ [The statement of Mr. Soifer follows:]
+
+ Prepared Statement of Don Soifer, Executive Vice President, Lexington
+ Institute
+
+ Mr. Chairman and Members of the Committee: As the costs, and the
+demand, for higher education have risen year after year, traditional
+models of financing it have come under increasing stress. We recognize
+that a higher education is worth the investment. That's why we are here
+today. But how is it best supported? Policymakers must continue to
+ensure that each appropriation is worth the investment.
+ One formidable, and growing, challenge is in meeting the
+transitional issues of high school students as they advance into the
+higher education system.
+ Secretary Spellings' 2006 Higher Education Commission pointed out
+insufficiencies in preparing high school graduates for either college-
+level work or the changing needs of the workforce. The Commission
+connected this trend to scores on the National Assessment of
+Educational Progress (NAEP), noting that only 17 percent of seniors are
+considered proficient in math and only 36 percent are proficient in
+reading. We are currently asking our higher education system to support
+the costs for this remediation.
+ The Colorado Commission on Higher Education found that the cost to
+the state of providing remedial education to its students in public
+higher education institutions was $11.4 million in 2004.
+ Research by the Alabama Policy Institute found that total remedial
+spending by that state's public and private higher education
+institutions totaled some $84 million per year. The authors pointed out
+that this may be understated because it does not reflect the time spent
+in non-remedial courses bringing students ``up to speed.'' Another
+concern this figure does not address is whether college level courses
+are at times being watered down to compensate for the skill levels and
+preparation of students.
+Higher education cost and funding trends
+ Institutions of higher education need to keep tuition increases as
+small as possible, while also maintaining quality. This often requires
+defining the mission of the university in meeting multiple goals.
+ College costs have typically risen at twice the Consumer Price
+Index, and often faster then health care expenditures, according to the
+U.S. Department of Labor. Tuition costs, as a percentage of the average
+family's paycheck, are increasingly upward of 25 cents on the dollar.
+ In short, federal student financial aid cannot be relied upon to
+keep pace with the rising cost of higher education in America.
+ When state funding for higher education remains flat, institutions
+often pass the increased burden on to students. It is worth nothing
+that student aid providers would likely do the same thing should their
+profit margins be cut in half, as some current federal proposals would
+effectively do.
+ Most of us have by now read examples of extravagant spending on the
+campuses of public and private universities, such as elaborate new
+fitness and recreation centers that carry pricetags of $50 or even $100
+million.
+ In the face of tighter budgets, many institutions are actively
+seeking ways to reduce spending. Colleges and universities that cut
+costs tend to fill job vacancies slower, freeze salaries, defer
+purchases, and find ways to lower operating expenses across the board,
+according to a 2006 report by the Missouri State Auditor.
+ In this changing environment, do our delivery methods still make
+the most sense?
+ As the demand for higher education continues to grow, we are seeing
+major changes in the demographics of the population going to college.
+The Department of Education projects that the college-age population
+will increase approximately 12 percent from 2005 to 2014. Increases in
+non-traditional higher education students, who are not attending
+directly following high school, are also predicted.
+ With fewer increases in state-level appropriations for higher
+education, some states have evolved their systems for delivering
+student aid.
+ Arizona State Representative Laura Knaperek author of her state's
+new Postsecondary Education Grant Program, described the goal to be,
+``A student-centered system of funding where access, affordability and
+quality drive good public policy.'' Participating full-time students in
+the program receive $2,000 grants they can apply to tuition or other
+qualified expenses at accredited private higher education institutions
+in the state. Eligible students must meet residency requirements and
+are eligible for up to four years.
+New policy options
+ Chicago Federal Reserve President Michael Moskow observed last year
+that, ``Universities must be more transparent in their operations.''
+ Can it truly be considered a slap on the wrist to ask a higher
+education institution that increases its cost at twice the rate of
+inflation to provide an explanatory statement and provide a strategic
+plan to hold down future costs? There are strong benefits to such
+transparency in operations. Just ask the public universities that
+invest their endowments in Strayer University stock, as the Chicago Fed
+also noted.
+ A proposal introduced last year in the Senate would have extended
+the Pell Grant program to provide low-income high school students the
+opportunity to take classes at a nearby university, community college
+or technical college, a new option deserving further consideration.
+ In light of the costs being incurred by our higher education system
+for remediating students, we have to look to our public schools and ask
+if their education delivery methods are the ones best suited for
+accomplishing the challenges before them? Can charter schools better
+prepare students to enter higher education? Research shows that this is
+often the case. If so, how can we develop more of them?
+ Quality online education at primary, secondary and postsecondary
+levels can bring specialized subject-matter expertise, using more
+current education technology, to communities such as those where the
+traditional manufacturing base is no longer thriving. It can also
+provide a more cost-effective strategy to meet the remedial and other
+education needs of many higher education students, making a quality
+higher education more accessible to more Americans.
+ It is also critical that we continue to monitor whether our local
+public schools are effectively closing learning gaps between all the
+subgroups of students? How is our public education system helping
+children in perpetually underperforming public schools to get this
+preparation as well?
+ And how can the best, most effective teachers and administrators in
+those schools be paid commensurate to their success, and be paid well
+enough to compete with jobs in other sectors?
+ I respectfully request that the Committee consider these questions
+and trends as you continue your valuable work creating the policies
+that will help American students reach and pay for higher education.
+ Thank you.
+ ______
+
+ Chairman Hinojosa. Very good.
+ I would like to start and ask my first question of James
+Merisotis. I will recognize myself for 5 minutes.
+ Most of us support the GEAR UP and the TRIO programs that
+you mentioned in your statement. Why is it that after so many
+years in existence these programs are so severely under funded
+that TRIO, for example, serves less than 10 percent of eligible
+students? Is it accountability, as defined by the
+administration? What are your thoughts?
+ Mr. Merisotis. It is not clear to me what the reason is for
+the under investment. Only about 10 percent of the eligible
+populations for the TRIO and GEAR UP programs actually benefit
+from those programs. The track record of success in those
+programs is impressive both in TRIO and in the more recent GEAR
+UP case.
+ I think the challenge for those programs is that they are
+dealing with the complex life circumstances of students. So
+some of the traditional measures of success in these kinds of
+programs are difficult to pin down. You can't predict what
+someone would have done in the absence of these kinds of
+programs.
+ It is also difficult to use the existing data systems to
+measure the long-term success of students. Students in today's
+society, particularly low-income and minority students, live in
+a very mobile, fluid context. It is difficult for us to track
+those students, to ensure continuity of services and
+consistency over time, and I think that is one of the reasons
+why there has been some focus on the question of are these
+programs as efficient as they should be.
+ I think these programs are enormously important and I am
+troubled by the fact that they haven't received the sufficient
+support they deserve.
+ Chairman Hinojosa. Do you agree that two things occur under
+both programs, particularly I see it in the GEAR UP program,
+that we have corporate America investing $1 for every dollar
+that the federal government invests in the GEAR UP program?
+And, number two, that we are seeing more parental involvement
+than we had before?
+ Mr. Merisotis. I think that is right, and I think this
+broader issue of partnership and the involvement of the private
+sector through things like the private scholarship that I
+talked about are terribly important in terms of our
+understanding of how we can finance and effectively pay for
+higher education.
+ The federal government doesn't stand alone in this process.
+And I believe states, institutions and the private sector all
+have an important part in playing to support the efforts of
+families and students in financing higher education and getting
+through college once they are in.
+ Chairman Hinojosa. Thank you.
+ My next question is for Mr. Wiener.
+ Why do you think that both federal and state policymakers
+decided that it is more important to fund and develop programs
+for the middle-and upper-class college students than it is to
+focus and concentrate available funds to lower-income students?
+ Mr. Wiener. It is hard to understand why we have shifted
+our emphasis so profoundly over the last 10 to 15 years, not
+just in student financial aid, although it is in acute example.
+And I think one of the reasons that it has been allowed to
+happen and perhaps hasn't gotten as much attention as it
+deserves is because we really need to have a new conversation
+about the metrics for quality and accountability within higher
+education.
+ You know, right now, in all the ways that we tend to bestow
+status and recognition on institutions, they sort of earn that,
+the fewer students that need help they take on, the more elite
+the students they take on, the more likely those students are
+to graduate from college no matter where they go, the more
+elite status we tend to assign to the institution.
+ And I think we really need to figure out a way that we
+honor and support those institutions that are really serving
+the national interest and the public interest of educating
+students who need an education, and I think that is part of
+sort of recentering this whole conversation.
+ As your question notes, states have also shifted in this
+direction, although not quite as much as the federal
+government, and institutions themselves have as well shifted
+away from low-income students. So it is very important that we
+try to recenter and put this in a new direction.
+ Chairman Hinojosa. Thank you.
+ My last question is to David Breneman.
+ Learning model section of your report discussing the
+question, ``To what extent do colleges and universities in this
+state educate students to contribute to the workforce.'' This
+implies that degree completion is not only a personal benefit
+but a societal benefit as well.
+ Do you think the answers to this question will help us
+improve our efforts in the international competitiveness arena
+that we are losing the lead on?
+ Mr. Breneman. The group that put out this report, we call
+it a report card, we decided one of the things we should
+include in this was an assessment of learning, apart from
+simply degree achievement. And you have certainly heard
+business people and others complain about college graduates who
+can't write a decent business letter and so forth. That
+suggests that the processes within the institutions in all
+cases are not adequate.
+ This is an intensely controversial subject within
+faculties. The institutions have little incentive or interest
+in many cases in pursuing this. And what we have tried to do is
+begin to develop some empirical metrics and ways that
+institutions who wish to pursue them could pursue them. And the
+report lays out our, the state where that has reached in our
+work. And, as you know, the Spellings Commission has emphasized
+this as well.
+ I think it is a difficult task. I don't know that I would
+pin all my hopes for the future on reaching some magical set of
+metrics. But I think it is a good exercise as part of a total
+strategy to improve the system.
+ Chairman Hinojosa. I need to give my ranking member an
+opportunity to ask his questions. I recognize Congressman
+Keller.
+ Mr. Keller. Well, thank you, Mr. Chairman, I appreciate
+that.
+ Thank you all so much for coming here today.
+ Let me start with you, Dean Breneman. I look at the report,
+this state report card on higher education, and the Florida
+section in terms of affordability gives Florida an ``F.'' And
+if you didn't know more and all you are doing is looking at
+this report, you would think, man, it sure is expensive to go
+to college in Florida. But I can tell you, it is complete and
+total nonsense.
+ Florida community college is $1,500 and the 4-year public
+schools are $3,400. Where does that rank Florida? Second
+cheapest in the United States, according to the Department of
+Education. And if you have a ``B'' average in Florida, it is
+completely free. Your community college is paid for 100 percent
+by the state. And if you have better than a ``B'' average, a
+3.5, it is 100 percent tuition paid for at 4-year schools, and
+``B'' average 75 percent.
+ So it is the best deal in--give the report?
+ Mr. Breneman. There is no question this affordability
+measure and category has been the one that has been the
+lightening rod in this report. And I don't stand here and
+indicate to you that we or anyone else in the country has come
+up with an absolutely unambiguous and defensible way to measure
+this.
+ What we tried to do is index college costs to the incomes
+of people in the individual states, and we have taken grief
+from the state of New York, from the state of Georgia, from a
+number of states who don't like their gradings.
+ We have, however, tried to work with the metric of income
+and we have anchored it in the early 1990s and looked at the
+trend----
+ Mr. Keller. I don't want to cut you off. I just want to let
+you know my concerns. I have got some other questions.
+ Mr. Wiener, you had talked about shifting the federal aid
+from the low-end to the middle class. I don't know what you are
+talking about. We have increased Pell Grant funding 80 percent
+since I have been here, from $7.6 billion to $13.7 billion.
+And, really, nothing for the middle class, absolutely nothing.
+ Let me give you an example. I have a teacher in my district
+who is married to a police officer. Collectively, they make
+$70,000. They have three kids in high school. Do you know how
+much their kids get for Pell Grants? Zip. Zip. They get no
+federal grant whatsoever.
+ So what the heck are you talking about in terms of we are
+shifting all the money from that middle-class family away form
+poor families?
+ Mr. Wiener. Well, first, let me just say, as I said in my
+written testimony, that it is a good thing to try and make
+college more affordable for middle-and upper-income families. I
+think the problem has been that really we haven't prioritized
+low-income, so let me explain how that has happened.
+ Mr. Keller. Well, alluding to the fact I just told you, why
+don't you tell me, what are we doing to help that family, that
+middle-class family who makes $70 grand and can't get a Pell
+Grant? What are we doing and what should we be doing?
+ Mr. Wiener. Well, we have actually created a number of tax
+credits and deductions that that family is entitled to.
+ And, again, I would just note, with respect to the Pell
+Grants, the college board analyzes trends in financial aid
+every year, and in the 2005-2006 year it was the first time
+that they noticed a decrease in real dollars in funding for
+Pell. So that in 2005, 2006, in terms of constant dollars, Pell
+Grant's funding was back down to the level it was in 2001-2002.
+ Mr. Keller. Let me interrupt there. I can just tell you the
+exact facts. The Pell Grant was $3,300 in 2000 and $4,310
+today. And the Pell Grant funding in 2000 was $7.6 billion and
+is $13.7 today. Only in Washington would someone call that a
+cut. There is no real cut. You may have argued that, well,
+should have kept up with inflation better. But there is no cut.
+ Let me go on to my next question. The biggest frustration I
+have--and I am a big fan of Pell Grant, don't get me wrong. You
+are not going to find a bigger fan in Congress. But we are
+dealing with skyrocketing tuition.
+ And, Mr. Merisotis, you said we should have Pell Grants at
+$6,000. Let us say that we had a magic wand today and I am
+pretty sympathetic to that, actually, and we made Pell Grant
+$6,000. And then universities across the country said, you know
+what, we have decided to increase our tuition this year $5,000.
+ How do we help students if we don't address this
+skyrocketing tuition problem when we just keep increasing Pell
+Grants?
+ Mr. Merisotis. I have been a researcher in the field of
+higher education for two decades. I have never seen credible
+evidence that suggests that federal student aid contributes to
+tuition increases. We can have a debate about this point if you
+would like, but my argument is that federal financial aid is
+one of many factors that are taken into account in the tuition-
+setting decisions.
+ Tuition-setting is a complex process. Institutions are
+involved. In some states, state boards are involved,
+legislators, et cetera.
+ The historical records show that in times of increasing
+federal aid, tuitions have gone down, and in times of
+increasing tuitions, federal student aid has declined. So it is
+not clear that there is a correlation between the two,
+particularly as it relates to grand funding.
+ Mr. Keller. My time is expired. Thank you.
+ Chairman Hinojosa. At this time, I would like to recognize,
+from the state of New York, Congressman Bishop.
+ Mr. Bishop. Thank you, Mr. Chairman. I want to thank you
+and the ranking member for holding this hearing.
+ I want to thank our panel.
+ To the last point that was just raised, I would just like
+to reinforce what Mr. Merisotis said. I participated in pricing
+decisions at the institution I was at for 25 years. We never
+once took into consideration available federal aid. We were
+focused exclusively on what we needed to charge to generate the
+revenue that we needed to have to provide quality service to
+our students, and we tried to do it at the lowest possible
+price.
+ And as to what is driving costs, at least my own experience
+is the principal cost driver is personnel cost. 70 percent to
+75 percent of what colleges spend is in salary and fringe
+benefits. Those are the principal costs. And so if we want
+larger class sizes, we can cut costs. If we want fewer student
+services, we can cut costs. But I think the question we have to
+ask is what trade offs we would be making.
+ I want to ask Mr. Wiener a question.
+ I would like to engage you on your recommendation that we
+would eliminate SEOG. My own view is that that would be a
+tragic mistake if we were to do that, and I think that it would
+exacerbate a problem that you outlined in your testimony, which
+is that the way in which we finance higher education is driving
+low-income students to low cost, and I think your
+characterization of it was as low-service institutions. And if
+we were to remove SEOG from the toolbox, if you will, that the
+financial aid officer has, I think that would be precisely the
+outcome if we were to do that.
+ I would like to hear your thoughts further on that.
+ Mr. Merisotis. Yes, and those are I think very real
+concerns. Just two responses.
+ One is that right now the SEOG money, it is not as if those
+institutions, and those institutions are sort of institutions
+that do disproportionately have more resources already, those
+institutions don't have to target SEOG money to their neediest
+students.
+ And so one of the concerns is that that money, again, while
+it is going on a need base, is actually--how you end up
+deciding who is eligible for SEOG money at those institutions
+that have it is you look at cost of attendance minus expected
+family contribution. Those are much higher-cost institutions,
+so that they are able to serve students who are much higher up
+the income level.
+ And so the thing I worry about is that those institutions
+actually can use the SEOGs in a sense to embellish their status
+by actually giving SEOGs to higher-income and previously higher
+performing students, who don't need the support as much as
+students who are eligible for Pell.
+ Mr. Bishop. Again, we ought not to make policy by anecdote,
+which I am about to do, but my own experience has been that
+virtually every single student, at least at the institution I
+was at, that received an SEOG was a Pell-eligible student, and
+it was simply a means by which we were enhancing the value of
+the Pell Grant and trying to close the gap between total
+student cost and available resources.
+ I want to move on. I would like to put this out for all of
+you. In the current you we now I think for the first time have
+a merit-based Pell program. I don't know what we call it, Pell
+Plus or something.
+ And my question is, is that the best use of limited federal
+resources? Or would we be better served if we were to increase
+the Pell Grant, for example, for students who have a negative
+EFC?
+ I will give it to either Mr. Wiener or Mr. Merisotis.
+ Mr. Merisotis. I think our best investment is investing in
+students with financial need.
+ The problem with a lot of merit-based aid is you are
+rewarding students for doing what they would have done any way,
+and I would rather invest money in the students who have the
+greatest financial need.
+ We have huge barriers in terms of access to higher
+education in this country between low-income and other
+students. Let us focus on that. We can find other ways to
+encourage academic excellence outside of the Pell Grant
+program.
+ Mr. Bishop. So can I infer from that that you would think
+that if we took a merit-based component out of Title 4 moneys,
+you would support that?
+ Mr. Merisotis. I would.
+ Mr. Wiener. I think this is actually, again, a very
+complicated issue. We do need a more comprehensive solution
+than we have right now. We have a lot of different programs
+that are serving discreet little parts of it.
+ We need to make it much clearer to students earlier on in
+their education that there is support for them to go to
+college. We need to make there be more support. We need to make
+it clear to them what that support is. But we also need to make
+it more clear to students that what they do while they are in
+their K-12 education will have a big impact on how successful
+they are in higher education.
+ And I would just point to the 21st Century Scholars program
+that was initiated by then Governor Bayh in Indiana, that sort
+of created a compact with students and said if you take a
+college prep curriculum and apply for financial aid and apply
+for financial aid and apply to college, we will make sure that
+affordability is not a problem. And I think that kind of
+comprehensive package is the most likely to really help low-
+income students to succeed.
+ Mr. Bishop. I know my time has expired, but if I could just
+make one last comment.
+ My fear is that merit-based component, given the vast
+proliferation of merit-based aid on the institutional level,
+simply saves the institution money, that the institution is
+simply going to have the federal government do what they would
+have done anyway, and if we are going to target federal moneys
+to where they are needed the most, we ought to be targeting
+them to needy students and let the institutions deal with
+merit.
+ Thank you, Mr. Chairman.
+ Chairman Hinojosa. I now wish to recognize the gentleman
+from California, Ranking Member McKeon.
+ Mr. McKeon. Thank you, Mr. Chairman.
+ I always enjoy these discussions. Interesting how when we
+are talking about the cost of education, we talk about student
+loans, we talk about federal financial aid. We talk about
+everything but the institutions that are actually responsible
+for their tuition and fees.
+ I know we heard a little bit about it, and they are
+handicapped. There is no way they can keep their costs down.
+They have to be going up because it is a very competitive
+world.
+ I come from a business background. I thought we had kind of
+a competitive business. We were selling western clothes, jeans,
+shirts. If we raised our prices, somebody would keep theirs
+down and would do more business than we were, and we had to
+then lower our prices, because there were only so many pair of
+pants going to be sold, and the ones that could keep their
+prices down were the ones that were going to get the business.
+ How do you say that this is a very competitive field when
+all schools have more applicants--I might be generalizing, but
+every time I visit schools, this is what they tell me--that
+they have more applicants than they have seats, or availability
+for students.
+ Where are they competing? What are they competing for?
+ Mr. Breneman. Well, since I introduced some of that
+conversation, I think the difference between your situation in
+the business you were in and in higher education is that you
+had an incentive to expand your market, through presales and
+presumably as your costs were lowered your profits went up.
+ Higher education doesn't have that bottom line. It plays in
+another league. The institutions are not trying to expand, by
+and large. In fact, in many ways, just the opposite. They are
+trying to enhance their selectivity. The game they are playing
+in, just as a worst-case example, is the U.S. News and World
+Report. And if you look at the things that are rewarded, they
+are things that drive up costs and----
+ Mr. McKeon. So as our population grows and we have more
+students coming out of high school that we are talking about we
+should be helping to benefit to get this education, at the same
+time we have the institutions keeping their numbers down.
+ Mr. Breneman. Well, no. I think national enrollments are
+up.
+ Mr. McKeon. Well, they are. But let us look. Ten years ago,
+the largest school in the country was University of Minnesota.
+They had about 50,000 students. They still have about 50,000
+students. So where is the competition? They are competing for
+the best students, okay, but meanwhile then their setting
+ground rules that are eliminating a great part of our
+population.
+ Mr. Breneman. Well, the other change that I think is worth
+noting, and we are largely talking about the public sector
+here, I think, in----
+ Mr. McKeon. Let me just assume that if all of the schools
+in the country had a million seats and we had a million and a
+half students competing for those seats, the competition it
+seems to me is on the students' side, not on the schools' side.
+If we have the same million seats and we have a half a million
+students, do you think there would be any incentive for some of
+the schools to lower their costs?
+ Mr. Breneman. Yes, actually, well, two points, let me make.
+ During the so-called ``birth dearth'' years in the 1980s,
+when actually the 18-year-old population was dropping, what you
+saw during that period, where you really were looking at
+smaller numbers, was you saw the great rise in tuition
+discounting, which was a way to--you would move your sticker
+price up, but then you would give more and more of it back to
+students and turn them back out----
+ Mr. McKeon. In other words, when there was a declining
+number of students competing for the seats, they did move to
+keep their costs down.
+ So what you are doing, what I kind of hear from the
+discussion, is it is the federal governments responsibility to
+pick up the cost for the increased number of students while the
+schools are trying to keep--they are competing for the best
+students. They are not doing anything to help other students
+come in.
+ So back to that question, where we had a million and a half
+competing for a million seats versus a half million competing
+for a million seats, where do the schools--I mean, how is that
+competitive? How are they in competitive environment to really
+help the students that you are saying we should be working to
+help?
+ Mr. Breneman. Well, let me just introduce----
+ Mr. McKeon. Is it all the federal government's
+responsibility? Should the states bear some responsibility?
+Should the institutions bear some responsibility? Should the
+students themselves?
+ I mean, one of these hearings that I attended a few years
+ago, one of our members said, ``I have a student in my district
+that wants to go to Princeton, and they should be able to do
+that.'' Well, I have some constituents that would like to have
+a Rolls Royce, but they can only afford a Chevy, you know.
+ In my state, community colleges are doing a fantastic job,
+but they are overburdened, and they, in fact, in my state
+lowered the cost of their tuition this year. I would like to
+see other institutions lower their costs. It should not be all
+a federal government responsibility.
+ Mr. Breneman. If I could just 10 seconds. The third player
+in this discussion we are having here is state government, and
+I think a big, historic change somewhere in the 1980s and early
+1990s was really the dropping and discarding of enrollment-
+driven funding formulas which provided some incentive. If you
+added more students, you got a claim of----
+ Chairman Hinojosa. If the gentleman will yield, there is a
+vote. This is the second call. I am going to ask for a short
+recess. It is only two votes. I am going to request that all
+members please return as soon after the second vote is taken
+and we will resume until each member has had an opportunity to
+ask their questions.
+ Thank you. We are recessed.
+ [Recess.]
+ Chairman Hinojosa [presiding]. We are ready to resume.
+ And I am delighted to be able to recognize the gentlelady
+from California, Congresswoman Susan Davis.
+ Mrs. Davis of California. Thank you very much, Mr.
+Chairman.
+ Thank you to all of you for being here. I think I may have
+missed some of the early remarks, but I hopefully could have
+picked that up.
+ I wanted to follow up with Mr. McKeon's thoughts, if I may,
+because we obviously know that we have many, many young people
+who are doing basically what we ask. I mean, they are getting
+through what may be a fairly rigorous curriculum, but then they
+are not getting into the schools that they would like, into
+state schools.
+ And while they have community college as a resource to
+them, at the same time they feel that, you know, they are just
+kind of being pushed out of what they had hoped 4 years prior
+they would be able to do.
+ So if you can address, how do we deal with that?
+ I mean, one of the ways in which I think in the state
+system, and I come from San Diego, that we have dealt with it
+is to have schools, you know, not running 24 hours, but to
+utilize available buildings. We certainly bring in other
+instructors, professors, to try to pick up that lag. So we are
+actually being able to educate more students than perhaps the
+old caps would indicate.
+ So what are the best practices around that? We know that
+there are some. What should we be doing?
+ The other issue that is very clear to students is that if
+they are not graduating in 4 years, that is adding thousands
+and thousands to their education when, in fact, they are not
+graduating because they don't have the instructors, they can't
+get the classes, they are working too hard, they are not able
+to get there. Kind of a dual issue.
+ If you could address that question, I would really
+appreciate it.
+ Mr. Wiener. These are very important issues. And I think
+generally we need to try to figure out how we sort of
+reemphasize undergraduate education. And, again, how we allow
+institutions to distinguish themselves for serving students who
+actually really need help to get in and through college.
+ One of the recommendations in my written testimony is
+around collecting better data so that we can understand which
+institutions really do the best job for serving these
+nontraditional students. At what institutions are they most
+likely to actually get a degree, and not in 6 years, as you
+noted, but in 4 years. Where now the standard metric for
+evaluating graduation rates in 4-year institutions is 6 years.
+Only about 40 percent of students actually graduate in 4 years
+anymore.
+ But right now we don't collect data very well to
+distinguish which institutions do a better job with those
+students, and we really do nothing to celebrate them.
+ Mrs. Davis of California. What is the problem with that? I
+mean, would it take an organization to do that? Is it something
+that we ought to be doing here, Congress ought to be
+appropriating money for? What is the problem? I mean, that is
+an obvious need that we have.
+ Mr. Wiener. Well, some of it relates to--so there is the
+IPEDS, the Integrated Postsecondary Education Data System,
+which is how the federal government collects a lot of
+information on higher ed, but it collects information in silos,
+so there is no way of cross referencing. We know which students
+are getting financial aid, but we don't know how those students
+do in different institutions. There is huge variations.
+ We have created a publicly acceptable database called
+College Results Online, that puts every 4-year institution in a
+peer group that looks at all of the kinds of inputs that we
+know do make some difference in terms of how selective they
+are, how many resources they have, how much, you know, what
+kind of students they are serving. And within every group of 15
+or 25 institutions, there is a huge range in the actual
+graduation rate of those students.
+ But that data right now is limited to first-time full-time
+freshmen, and we think it is one fair metric for evaluating
+higher ed, because those are the students who are most likely
+to get through with a degree. But we really have terrible data
+with respect to how nontraditional students are served, and
+there are ways of getting more data in IPEDS that would help
+that.
+ Mrs. Davis of California. Thank you, Mr. Wiener.
+ I can see that--would you like to respond?
+ Mr. Soifer. As we have seen a greater demand for higher
+education, we have also seen a change in the demographic. We
+have also seen an increase in the nontraditional student rate
+at which students are going into higher education not directly
+out of high school.
+ And when we talk in terms of these very high remedial
+costs, I was giving a talk at a campus in Pennsylvania and a
+student asked me, well, aside from the formal remedial costs,
+we just worry that our classes are being watered down because
+of kids who are--you know, my older brother was in this school
+6 years ago and is the content of the course matter being
+watered down to some extent that really is not measurable.
+ So these are real challenges and the delivery systems that
+were created to serve this population really need to be looked
+at in ways to see if they really are still meeting the needs
+that they were created to meet.
+ Mrs. Davis of California. I appreciate that.
+ One other thought, very quickly, and you don't need to
+answer this now, is the FAFSA, the application for financial
+aid in assistance. I have been to workshops with the kids and
+they all have, you know, I speak FAFSA, and they are trying to
+reach out and do a good job.
+ Is there something about that that could be easier, more
+accessible and more helpful to parents particularly? And is
+there information that is being captured in that that they
+don't have easy access to their income tax returns, and beyond
+income tax returns.
+ Mr. Wiener. Beyond income tax returns, it is any kind of
+public assistance anybody in their household received. So
+whether it is likely that there is good record keeping
+generally in these households I think is a real challenge.
+ And the fact is the federal government has all of the
+information. The federal government is the custodial for all of
+that information. And if we allowed low-income families to
+check a box on their income tax return, we could actually
+generate for them and proactively inform them of their
+eligibility for grant aid, which I think would have a huge
+effect on the motivation and on these students and these
+families visualizing themselves as college-going.
+ Mrs. Davis of California. Thank you.
+ Thank you, Mr. Chairman. That would be something to follow
+up on. I would appreciate that. Thank you.
+ Chairman Hinojosa. Thank you.
+ I now would like to recognize the gentlelady from North
+Carolina, Congresswoman Foxx.
+ Mrs. Foxx. Thank you, Mr. Chairman. I appreciate it very
+much.
+ I have a couple of questions I would like to ask.
+ Mr. Wiener, you said in your statement that persons of
+color are relegated, I believe you said, I am not sure of the
+exact words, to going to schools of lower cost. You were right
+on the verge of saying lower quality, and you didn't say that,
+but I could feel that that was what you felt.
+ Do you really have statistics to back up the fact that
+there is proportionately more students of color in lower-cost
+institutions than higher-cost institutions?
+ Mr. Wiener. Yes, Madam Congresswoman.
+ So in our report that I think is a part of the background
+materials for this hearing, but if not I would be very happy to
+provide it to the committee, it is very clear that students
+from minority groups are much more likely than other students
+to be in proprietary, for profit institutions as well as in 2-
+year community colleges as well as in nonselective 4-year
+institutions. And each of the way sort of up that ladder are
+institutions that have more resources to support students.
+ So, you know, we, I think, need to figure out how to create
+an accountability system or at least a system that recognizes
+institutions for serving underserved populations, because again
+right now I just am very worried that all the metrics on which
+colleges and universities can distinguish themselves encourage
+them to serve fewer of these students.
+ Mrs. Foxx. Is there any proof at all that students,
+particularly going to proprietary schools, are unhappy with the
+fact that they are going to those institutions?
+ I mean, there aren't many places where liberals in this
+country promote choice. I mean, mostly they want the government
+to control everything. But people do have a choice about which
+institution of higher education they want to go to, and if they
+are going to those, is it not that they are voting with their
+feet?
+ Mr. Wiener. If that were the case, I think that--I
+certainly am in favor of students having choices about where
+they attend college. The problem is that cost is a truly
+prohibitive factor at this point for many of our young people,
+and the choice really is illusory. They are needing to figure
+out where they can go on very limited means. I think it is very
+clear.
+ The Advisory Committee on Financial Aid has documented very
+clearly just how many college qualified students are not
+attending the institutions where they could be most successful.
+I mean, we are talking about millions of students over the
+course of years.
+ So it is a very big problem and I think that is the reason
+that this hearing is so important, is that financial aid and
+the federal commitment to this really plays a big part in what
+they think of as their options and the country suffers for
+losing those college graduates.
+ Mrs. Foxx. I have not heard you all say anything at all
+about encouraging more money for work-study. You have talked a
+lot about grants.
+ I used to be in higher education, so I know a little bit
+about the research. I don't follow it as closely now as I used
+to, but the research used to show that if a student works 15 to
+20 hours on campus, they are much more successful academically.
+And then they do much better when they get out of school
+because they have had the work experience and they have people
+who can vouch for them when they are leaving college.
+ So why don't you all ever talk about increased funds for
+work-study instead of just grants, grants, grants? You know,
+people don't respect what is given to them for free. They often
+respect what they get that they work for. And you change the
+whole ethos of people.
+ So why don't you talk about work-study? Anybody? I mean,
+why are you silent on the issue of work-study?
+ Mr. Breneman. Well, let me venture something. I don't think
+any--I certainly still subscribe to the perspective you have
+expressed about the 15 to 20 hours a week being very desirable.
+ I don't actually know the answer to why work-study--my
+sense is it is sort of one of the campus base programs, and my
+sense is those programs have sort of stalled out and haven't
+shown much political clout. And I don't know if it is because
+of lack of advocacy or so much concentration on the Pell Grant.
+ No one that I know is unhappy with work-study or thinks it
+is a bad program.
+ Mrs. Foxx. Well, I mean, is it that it might involve a
+little bit of work on the part of the institutions to create
+those jobs? I mean, I am just stymied by the fact that all the
+research shows that it is so positive.
+ And the other thing that you are silent on is increasing
+money for distance learning. I mean, we could vastly expand the
+opportunities for people with no money to do programs in
+distance learning because they could stay at home and do that.
+ And so, why don't you talk more about the money for
+distance learning?
+ Mr. Breneman. Well, I will just speak for myself on this. I
+have taken the theme of this hearing, perhaps inaccurately, to
+be primarily focused on the traditional college-age student,
+and I think distance learning is a vehicle that has greater
+applicability to the older student, personally, which I assume
+falls under the purview of your committee and perhaps there has
+been narrow mindedness on our side.
+ Certainly this report which I was asked to speak to is
+really looking more at the traditional aged undergraduate.
+ Mrs. Foxx. Mr. Chairman, I know my time is up, but I just
+would like to say I find that very narrow-minded, because of
+all the people we should be pursuing in distance learning, it
+is this media-afflicted population. I mean, they are so
+oriented to television and computers that I find it really
+narrow-minded on your part that you would say we are thinking
+about older people. Older people would be much less likely to
+want to do their learning that way than the current generation,
+it seems to me.
+ I think the paradigms of so many of you are very narrow. I
+think that the questions you start with are often the wrong
+questions. I think you have just given us a great opportunity
+to say let us see what the rest of the story is or the other
+side of the issue.
+ Thank you.
+ Chairman Hinojosa. As we move on to allow other members to
+ask their questions, I wanted to ask unanimous consent that the
+report that Mr. Wiener referred to be made a part of this
+hearing. Hearing no objections, so be it.
+ [The Internet link to an August 2006 report by the
+Education Trust, ``Promise Abandoned,'' follows:]
+
+http://www2.edtrust.org/NR/rdonlyres/B6772F1A-116D-4827-A326-
+F8CFAD33975A/0/PromiseAbandonedHigherEd.pdf
+ ______
+
+ Chairman Hinojosa. I would like to recognize the gentleman
+from the great state of Virginia, Congressman Bobby Scott.
+ Mr. Scott. Thank you, Mr. Chairman.
+ I thank the witnesses for their testimony and for their
+contribution.
+ I had one question about the prohibition against those who
+have had drug convictions qualifying for financial aid. I have
+always had a problem with that, because upper-income students
+who get convicted can continue their education, but if you
+actually need student aid, you lose your education.
+ What is the status of that and how many students are losing
+their educational opportunities because of that provision?
+Would the witnesses suggest that we get rid of it so that
+everybody can continue their education on an equal basis? Is
+there any reason to continue that policy?
+ Mr. Wiener. If I could answer, Congressman Scott, you know,
+obviously we want to discourage young people from making bad
+choices, including using drugs or abusing alcohol, but I do
+think it is a big mistake to try and pursue that good public
+policy by limiting the chances and basically taking away the
+second chance those students have.
+ Once they are sort of punished for that offense, they ought
+to be allowed to basically rejoin society and we need for those
+students to have a chance at higher education. And I think we
+are making a big mistake by cutting off their chances in that
+way.
+ Mr. Scott. And is their likelihood to continue on drugs
+greater or less if they are allowed to continue or if they are
+prohibited from continuing college? Is that a counterproductive
+policy?
+ Mr. Wiener. We certainly know that Americans who aren't
+able to access higher education are much more likely to be on
+public assistance, to be in trouble in any number of ways with
+the law. Recently there have been a whole spate of studies and
+reporting in The Washington Post this weekend and then
+editorialized on yesterday, how limiting the social advancement
+and social mobility of Americans is if they don't access higher
+education.
+ Americans who go to higher education are much more likely
+to get married and have a family now than other Americans. So
+we are really shooting ourselves in the foot by cutting off
+these young people so early.
+ Mr. Scott. Well, thank you.
+ The portion of the education expense paid for by a Pell
+Grant has been eroding. Do you have the statistics? I believe
+it was that the Pell Grant would cover about 80 percent of the
+cost of education 20 or 30 years ago and now it is down below
+50 percent and not keeping up with inflation, so it is eroding
+even more. Do you have those numbers?
+ Mr. Merisotis. In 1979, 1980, actually, was the high point,
+when it did cover about 80 percent of the average price.
+Today----
+ Mr. Scott. Does the price include room and board?
+ Mr. Merisotis. The price includes room and board, yes. So
+it is the price of attendance, tuition, fees, room and board.
+ Now it covers nationally on average about 33 percent, so we
+are at a significant decline from where we were more than two
+decades ago.
+ Mr. Scott. And for those who qualify for the Pell Grant,
+their chance of being able to cover that gap is obviously a lot
+less. When it covered 80 percent, a person could work a part-
+time job, 15 hours a week and a little bit during the summer,
+and actually ``work their way'' through college.
+ Can students work their way through college now?
+ Mr. Merisotis. A couple of things. The first one is, the
+vast majority of college students today do work, particularly
+low-income students. So work is as a necessary part of how they
+finance their education.
+ It is very difficult to manage an excessive amount of work,
+more than 15 or 20 hours, without it having other implications
+either on their academic progress, but also because a lot of
+today's college students have complex family and life
+circumstances that make it very difficult to work a very large
+number of hours without it having very serious consequences.
+ Mr. Scott. What portion of low-income students don't go to
+college because they can't afford it?
+ Mr. Wiener. Well, we know from research at the Department
+of Education that approximately 20 percent of low-income
+students who are fully college qualified, and that means that
+they were in the high levels of achievement in high school,
+don't go directly on to college, 20 percent. For high-income
+families, that is fewer than 3 percent of students don't do
+that.
+ Mr. Scott. So 20 percent are not going to college because
+they essentially can't afford to?
+ Mr. Wiener. That is correct. And there are more students
+who could be successful in college who are not going because of
+the expense.
+ But, again, the Advisory Committee on Financial Aid
+estimates that in this next decade, anywhere--and I know this
+is a broad figure--but anywhere from 1.5 million to 2.4 million
+low-income students who are college-qualified won't go because
+of the financial burden and the risk that they don't feel that
+they can take in terms of taking on debt. That is way out of
+proportion to anything their family has ever earned.
+ Mr. Scott. Well, is it also out of proportion to what they
+can reasonably pay back?
+ Mr. Wiener. We are getting to that place, and very many
+students are forced to take on that level of debt. That is why
+in my testimony I referred to a program or a policy that is
+offered by the Project on Student Debt, and it is to try and
+make loan repayment schedules contingent on family income.
+ One of the things that we do right now for paying back
+loans, sometimes it can have negative implications, actually,
+to work more, to earn more money. You could have your loan
+payment go up more than your additional income. So it
+encourages people to work less.
+ The second is, we don't take into account at all whether
+the loan--whether the loan repayment--the person who has the
+obligation has a family, so that we have the same expectations
+as somebody paying back who is single and just out of college
+as someone who has two kids, as we have more and more
+nontraditional students. And, again, we need to encourage these
+people to go to college. We have got to index that against
+their actual expenses for supporting their family.
+ Chairman Hinojosa. Ladies and gentlemen, I want to make
+some concluding remarks.
+ I want to thank the witnesses and the members of the
+subcommittee for a very informative session.
+ As previously ordered, members will have 14 days to submit
+additional materials for the hearing record. Any member who
+wishes to submit follow-up questions in writing for the
+witnesses should coordinate with majority staff within the
+requisite time.
+ Without objection, the hearing is adjourned.
+ And I thank each and every one of you.
+ [Whereupon, at 12:32 p.m., the subcommittee was adjourned.]
+
+
+
+